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Chipotle Mexican Grill Inc. on Tuesday missed Wall Street’s quarterly profit estimates, hit by the cost of running its business during the COVID-19 pandemic, with the burrito chain’s shares falling nearly 2% after hours has.
Strong digital operations at the fast-paced chain, a prominent artist in the coronavirus industry, helped him dispel the worst impact, even as spending rose as it strengthened its delivery network.
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Digital sales rose nearly threefold, causing a 5.7% increase in comparable sales, aided by an increase in online orders in some parts of the United States.
Total revenue increased 11.6% to $ 1.6 billion for the fourth quarter ending December 31.
Excluding one-time items, the company earned $ 3.48 per share, according to Refinitiv’s IBES data, which estimates $ 3.73.
“It is now well established that November was weak in space, and although Chipotle is resilient, it is not immune,” Piper Sandler analysts wrote in a comment to the earnings report.
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The company’s share price has risen by more than 10% so far this year and rose by 66% in 2020 – according to Credit Suisse, by far the best performance in the restaurant industry.
The success is due in part to the ability to rapidly increase digital sales during the pandemic. For the full year 2020, Chipotle’s digital sales grew by 174.1% to $ 2.8 billion and accounted for 46.2% of sales. About half of digital sales were for delivery orders.
The chain is testing quesadillas, as well as smoked breasts, after the nationwide launch of coriander cabbage cabbage rice in January for a limited time.
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Chipotle does not provide sales forecasts during the pandemic. For 2021, however, it is said that they are expected to open 200 new restaurants and have an effective tax rate of between 25% and 27%.
About 70% of its new restaurants will include ‘Chipotlane’ digital drive. Sales at places with Chipotlanes are on average about 10% higher than those without, Curt Garner, chief technology officer, told Reuters.
| Ticker | Safety | Last | Alter | Alter% |
|---|---|---|---|---|
| CMG | CHIPOTLE MEXICAN GRILL INC. | 1,523.05 | +14.03 | + 0.93% |
The company also tests ‘cars’, where an employee brings the orders to a customer’s car, in 29 restaurants.
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“What we’ve seen so far has been really encouraging,” Garner said.
(Reporting by Nivedita Balu in Bengaluru; additional reporting by Hilary Russ in New York; editing by Anil D’Silva, Dan Grebler and Richard Pullin)