News

Chipotle earnings: Recession, what recession?

February 10, 2011

Chipotle Mexican Grill Inc. reported financial results for its fourth quarter and full year ended December 31, 2010.

Same-store sales increased 12.6 percent for the quarter, led by an increase in store traffic.

Meanwhile, revenue for the quarter was $482.5 million, up 24.5 percent from the prior-year period. The growth in revenue was the result of new restaurants not in the comparable base and the increase in comparable restaurant sales.

During the quarter, Chipotle opened 62 new restaurants, bringing the total restaurant count to 1,084.

Net income for the fourth quarter was $46.4 million, or $1.47 per diluted share, compared to $31.6 million, or $0.99 per diluted share, in the fourth quarter of 2009.

Restaurant level operating margin increased 140 basis points over the same period last year, an increase of 25.9 percent. The increase was primarily driven by the impact of comparable restaurant sales growth, partially offset by increased food costs.

FY 2010 review

Revenue for the full year of 2010 was $1.84 billion, up 20.9 percent from the prior year. The growth was the result of new restaurants not in the comparable base and a 9.4 percent increase in comparable restaurant sales.

For the full year, Chipotle opened 129 restaurants, including one restaurant in London and one in Toronto.

Net income for the full year of 2010 was $179.0 million, or $5.64 per diluted share, compared to $126.8 million, or $3.95 per diluted share for 2009.

Restaurant level operating margin was 26.7 percent for the full year, an increase of 180 basis points over the prior year period. The increase was primarily driven by the impact of comp-sales growth.

"Our accomplishments in 2010 were many -- opening our first restaurant in London, hitting the 1,000 restaurant milestone, and serving naturally raised barbacoa in all of our restaurants -- just to name a few. All of our accomplishments were made possible by remaining focused on our vision to change the way the world thinks about and eats fast food," said founder, chairman and Co-CEO Steve Ells.

While most of 2010 was a success for the burrito chain, stores in its Minneapolis market were the targets of an investigation by the U.S. Immigration and Customs Enforcement (ICE) office. The probe led to the firing of hundreds of workers. The company also announced that restaurants in Virginia and Washington, D.C., will be audited by federal immigration officials and "notices of inspections" have been received from ICE.

For 2011, the company expects to open 135 to 145 new restaurants and low single-digit same-store sales.

This also might be the year Ells opens his much-talked about Asian concept.

The company has registered a trademark for ShopHouse Asian Kitchen. While the name might not mean much in the United States, shophouses are an architectural style used in urban Southeast Asia such as Singapore.

Chipotle’s media rep Chris Arnold said the company plans to open its first Asian-inspired restaurant in one of the company’s 40 current markets.