Chipotle Misses Estimates For Quarterly Profit
Chipotle Mexican Grill Inc has missed Wall Street estimates for quarterly profit, hurt by costs related to keeping its business running during the COVID-19 pandemic.
Strong digital operations at the fast-casual chain, which has been a standout performer in the industry during the coronavirus, have helped it ride out the worst of the impact, even as its expenses have climbed as it bolsters its delivery network.
Digital sales rose nearly three-fold and drove a 5.7% rise in comparable sales, helped by a surge in online orders in some parts of the United States.
Total revenue increased by 11.6% to $1.6 billion for the fourth quarter ended December 31, the company said.
Excluding one-time items, the company earned $3.48 per share, missing the estimate of $3.73, according to IBES data from Refinitiv.
"It is now well established that November was weak across the space, and while Chipotle is resilient, it is not immune," Piper Sandler analysts wrote in a note after the earnings report.
The company's share price is up more than 10% so far this year and rose by 66% in 2020 - by far the best-performing stock in the restaurant industry, according to Credit Suisse.
Its success came partly from its ability to ramp up digital sales quickly during the pandemic. For the full-year 2020, Chipotle's digital sales grew by 174.1% to $2.8 billion and made up 46.2% of sales. Approximately half of its digital sales were for delivery orders.
The chain is testing quesadillas, as well as smoked brisket, after its January nationwide launch of cilantro-lime cauliflower rice for a limited time.
Chipotle has not been providing sales forecasts during the pandemic. However, for 2021 it said that it expects to open 200 new restaurants and have an effective tax rate of between 25% and 27%.
"Chipotlane" And "Carside" Pickup
Approximately 70% of its new restaurants will include "Chipotlane" digital drive-throughs. Sales at locations with Chipotlanes are approximately 10% higher on average than those without, chief technology officer Curt Garner told Reuters in an interview.
The company is also testing out "carside" pickup, where an employee brings orders out to a customer's car, in 29 restaurants.
"What we've seen so far has been really encouraging," Garner said.