In Chipotle's fourth quarter conference call, founder and co-CEO Steve Ells said the company plans to open a second ShopHouse location in Washington, D.C., the second half of this year.
Ells said the success of ShopHouse reflects the values established by the company when it opened the first Chipotle.
"ShopHouse Southeast Asian Kitchen is a product of our belief that Chipotle's success has never really been about serving burritos and tacos. But rather, it's due to our commitment to serving the best-tasting food prepared using classic cooking techniques, building restaurant teams of top-performers who are empowered to create a unique and special restaurant experience and designing restaurants that are functional, appealing and that say something about the food we serve," he said. " Many current customers aren't quite sure how the system works or what to order when they first come in, and sometimes have issues with flavor combinations or the level of spice in their food. But they like it and from the very beginning, you see that the customers are coming back, week after week."
In regard to Chipotle's expansion, the company is looking to grow the concept in Europe. In September, it opened a second Chipotle restaurant in London and construction is underway for two additional locations there.
Q4 revenue, same-store sales growth
Revenue for the quarter was $596.7 million, up 23.7 percent from the prior year period. The growth in revenue was the result of new restaurants not in the comparable base and an 11.1 percent increase in same-store sales. Comps growth was primarily driven by increased traffic in the quarter as well as the impact of menu price increases implemented between March and August.
Net income for the fourth quarter of 2011 was $57.5 million, or $1.81 per diluted share, compared to $46.4 million, or $1.47 per diluted share, in the fourth quarter of 2010.
Food costs were 32.2 percent of sales, an increase of 120 basis points driven by higher commodity costs.
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During the quarter, the company opened 67 new restaurants, bringing the total restaurant count to 1,230.
“Our accomplishments this year were truly amazing. Empowered cultures create excellent teams. These excellent teams are exciting, productive and powerful. They attract great employees and develop them to be at their very best, and they become the future leaders within our organization,” said co-CEO Monty Moran.
For the year
Revenue for the full year of 2011 was $2.27 billion, up 23.6 percent from the prior year. The growth in revenue was the result of new restaurants not in the comparable base and an 11.2 percent increase in comp sales. Comps growth was primarily driven by increased traffic, and to a lesser extent, by menu price increases.
Net income for the full year of 2011 was $214.9 million, or $6.76 per diluted share, compared to $179.0 million, or $5.64 per diluted share, for 2010.
Food costs were 32.5 percent of sales, an increase of 190 basis points driven by higher commodity costs.
For the full year, Chipotle opened 150 new restaurants including one ShopHouse, and one Chipotle in London, bringing the total restaurant count to 1,230.
During 2011, the company added 102 Restaurateurs to its roster for a total of 264. The company's Restaurateurs are comprised of the top team leaders within company stores. They now oversee nearly 60 percent of Chipotle restaurants.
"We continue to be amazed by how these empowered, top-performing leaders continue to raise the bar far beyond even what we thought was possible," Moran said. … "While our culture is well-known to our current crews and managers inside Chipotle, it isn't necessarily as familiar to people outside the company. So we are in the early stages of implementing a new recruiting strategy. This strategy is aimed at improving the pool of potential applicants by helping them understand what our current crews and managers already know, that we're a company with a special culture that provides tremendous opportunity for our top performers."
As part of this strategy, the company is rolling out a new HR software program designed to provide enhanced analytics in regard to targeting potential new employees.
"We are also relaunching our employee referral bonus program and adding more field recruiters as well as expanding our recruitment efforts on college campuses and event runs," Moran said. "Through this strategy, we expect to get even better applicants, so that we can continue to improve the quality of people that we're hiring even as we accelerate our growth this year."
Chipotle is now serving 100-percent naturally raised chicken and steak and CFO Jack Hartung said he expects food costs to reach more reasonable levels as they relate to avocados, dairy and produce. However, those benefits will be offset by higher costs for chicken, beef, rice and beans, he said.
In 2011, an increase in food costs was offset by menu-price increases that became fully realized in the fourth quarter.
In 2012, management expects the following:
- 155-165 new restaurant openings
- Mid-single digit comparable restaurant sales growth
- Food inflation of mid-single digits from the fourth quarter food cost level
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