News

Chipotle hit hard by Q1 losses

April 26, 2016

Chipotle Q1 results left much to be desired as the chain reported today that year-over-year revenue decreased 23.4 percent to $834.5 million and comparable restaurant sales decreased 29.7 percent. 

The quarter is the worst in the company's history. Steve Ells, founder, chairman and co-CEO of Chipotle, broke the bad news to investors during an earnings call.

"As our sales are on a gradual path to recovery, we remain focused on our mission of changing the way people think about and eat fast food," he said. "The best approach to rebuilding our business is to proudly serve safe and delicious food in our high-quality restaurants every single day, which is exactly what we will continue to do."

Ells said that comparable restaurant sales declined primarily as a result of a decrease in the number of transactions and, to a lesser extent, due to a decline in average check, including the impact of sales promotions.

Although Ells did not say that theE.colioutbreaks were to blame for the traffic decline, it is no secret that they have hurt the brand. 

Other  Q1 highlights (year over year):

• Comparable restaurant transactions down 21.1 percent.
• Restaurant level operating margin of 6.8 percent, down from 27.5 percent.
• Net loss of $26.4 million, down from net income of $122.6 million.
• Diluted loss per share of 88 cents, down from $3.88
• 58 restaurants opened.

2016 outlook

For 2016, management expects the following:

• 220 to 235 restaurant openings.
• An effective full-year tax rate of approximately 38.4 percent.