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Chipotle Mexican Grill Inc. had a record fourth quarter and year, and executives said Tuesday that they now expect to increase plans for expansion by 1,000 restaurants in the years ahead as shares gained in after-hours trading.
Chipotle
CMG,
reported fourth-quarter net income of $133.5 million, or $4.69 a share, on sales of $1.96 billion, up from $1.61 billion a year ago. After adjusting for stock compensation, restructuring and other costs, the Mexican-food chain reported earnings of $5.58 a share, up from $3.48 a share a year ago.
Analysts on average expected adjusted earnings of $5.25 a share on sales of $1.96 billion, according to FactSet. Shares increased more than 5% in after-hours trading Tuesday following release of the results, after closing with a 0.6% gain at $1,462.15.
In a surprise, executives said in the results that they now expect to grow to 7,000 restaurants in North America over time, after previously stating 6,000, explaining that the increase was “based on the success of small-town locations that are delivering unit economics at or better than traditional Chipotle locations.”
Chipotle stock has hit record highs during the pandemic, as the chain has consistently shown strong growth and record results while quickly pivoting to online ordering. Executives said Tuesday that 41.6% of orders were made digitally, while comparable-restaurant sales rose 15.2% year-over-year.
“Even as Chipotle pushes through unprecedented price increases, digital users, which according to our data account for ~half of the company’s sales … have shown remarkable resilience,” Keybanc Capital Markets analysts wrote in a preview of the report.
For the full year, Chipotle more than doubled its earnings while growing sales more than 26%. Chipotle reported net income of $653 million, or $22.90 a share, on sales of $7.55 billion, with adjusted earnings of $25.42 a share. In 2020, the chain reported adjusted earnings of $10.73 a share on sales of $5.99 billion.
“2021 was an outstanding year for Chipotle, highlighting the strength and resiliency of our brand,” Chief Executive Brian Niccol said in a statement, later adding: “Moving forward, we believe expanding access and convenience through our digital ecosystem, accelerating unit growth, and continuing to develop and support our restaurant employees, will put us in a much stronger competitive position.”
Chipotle shares have suffered in the early days of 2022, along with other stocks that shot higher during the pandemic. The stock has declined more than 16% so far in 2022 and nearly 19% in the past three months, while the S&P 500 index
SPX,
has lost 5.9% and 4.6% in those periods.
