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Chipotle Mexican Grill On Tuesday, Inc. lost Wall Street estimates of quarterly earnings, hurt by costs related to maintaining its business during the COVID-19 pandemic, with burrito chain shares falling nearly 2% in trading after of the schedule.
The strong digital operations of the fast and casual chain, a highlight of the industry during the coronavirus, have helped it resolve the worst of impacts, although its costs have increased as it strengthens its delivery network.
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Digital sales nearly tripled and rose 5.7% in comparable sales, helped by an increase in online orders in some parts of the United States.
Total revenue rose 11.6% to $ 1.6 billion for the fourth quarter ended Dec. 31, the company said.
Excluding single items, the company earned $ 3.48 per share, with a forecast of $ 3.73, according to Refinitiv’s IBES data.
“It is now well established that November was weak across space and while Chipotle is resilient, it is not immune,” Piper Sandler analysts wrote in a note after the earnings report.
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The company’s share price rose more than 10% so far this year and rose 66% in 2020, by far the best-performing stocks in the restaurant industry, according to Credit Suisse .
Its success came in part from its ability to rapidly increase digital sales during the pandemic. Throughout 2020, Chipotle’s digital sales grew 174.1% to $ 2.8 billion and accounted for 46.2% of sales. About half of the digital sales corresponded to delivery orders.
The chain is testing quesadillas, as well as the smoked morsel, after its nationwide release of cilantro-lime cauliflower rice for a limited time.
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Chipotle did not provide sales forecasts during the pandemic. However, by 2021 he said he expects to open 200 new restaurants and have an effective tax rate of between 25% and 27%.
About 70% of its new restaurants will include thrus digital unit “Chipotlane”. Sales at locations with Chipotlanes are about 10 to 10 percent higher on average than those that don’t, Curt Garner, chief technology officer, told Reuters in an interview.
| Ticker | Security | Last | Exchange | Change% |
|---|---|---|---|---|
| CMG | CHIPOTLE MEXICAN GRILL INC. | 1,523.05 | +14.03 | + 0.93% |
The company is also testing “in-car” pick-up, where an employee carries orders in a customer’s car, at 29 restaurants.
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“What we’ve seen so far has been really encouraging,” Garner said.
(Report by Nivedita Balu in Bengaluru; Additional Report by Hilary Russ in New York; Edited by Anil D’Silva, Dan Grebler and Richard Pullin)