September 22, 2021

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Chipotle Shares Down 4% As Rising Digital Orders Fall At Record Rate, Earnings Are Lower – CNBC – Tell It Like It News

A customer wearing a protective mask walks into a Chipotle Mexican Grill Inc. restaurant in San Francisco, California. .

David Paul Morris | Bloomberg | Getty Images

The Chipotle Mexican Grill reported on Tuesday that its sales at the same store increased more than 5% in the last quarter, fueled by more digital orders and the return of carne asada.

Citing the uncertainty caused by the coronavirus pandemic, the company declined to provide a forecast for same-store sales growth in fiscal year 2021, but said it expects a strong first quarter.

Shares of Chipotle fell 3.8% on prolonged trading. The stock hit an all-time high of $ 1,553.55 during trading on Tuesday.

Here’s what the company reported for the quarter ended December 31 compared to what Wall Street was expecting, based on a survey by analysts from Refinitiv:

  • Earnings per share: $ 3.48, adjusted, compared to $ 3.73 expected
  • Revenue: $ 1.61 billion versus $ 1.61 billion expected

Chipotle reported fourth-quarter net income of $ 190.9 million, or $ 6.69 per share, compared to $ 72.4 million, or $ 2.55 per share, a year earlier. The company recorded a tax benefit of $ 3.77 per share for the quarter.

Excluding a tax benefit, corporate restructuring expenses and other items, Chipotle earned 3.48 cents per share, missing the $ 3.73 per share expected by analysts interviewed by Refinitiv.

Net sales increased 11.6% to $ 1.61 billion, meeting expectations.

Sales in the same store increased by 5.7%. The return of its carne asada in September spurred demand. CEO Brian Niccol said the steak is expected to stay until March.

Additionally, digital sales nearly tripled, up 177% from the same period a year ago, and accounted for nearly half of the company’s quarterly revenue. Online sales increased 216% in Chipotle’s second quarter and 202% in third.

So far, in January, sales at the same store have increased 11%, fueled by the launch of the cauliflower rice, which costs $ 2 more per order. And if the pandemic doesn’t get worse, the company expects same-store sales growth in the mid-to-high range of adolescents during the first quarter.

The company also said it raised its menu prices for delivery orders by an average of 13%. Third-party apps like DoorDash charge restaurants a fee, denting their profits. Chipotle had said in previous quarters that the crisis-fueled higher incidence of delivery orders had hurt its profit margins.

Executives also said that costs related to Covid-19, such as performance bonuses and sickness benefits for employees who came into contact with the virus, weighed on margins.

The company opened 61 new locations during the quarter, relocated two restaurants and closed one. In fiscal 2021, Chipotle plans to open about 200 new restaurants, assuming it encounters little construction work and allows for crisis-related delays.

CFO Jack Hartung said the company could resume share buybacks at the end of the first quarter or in the second quarter, depending on the current economic conditions.

Read the full earnings report here.