Chipotle Mexican Grill Inc. (CMG, Financial) released its fourth-quarter 2020 results after the market closed on Feb. 2. While company's earnings did not meet Refinitiv's consensus estimates, revenue matched expectations.
Shares dropped nearly 4% in after-hours trading following the announcement.
By the numbers
The Newport Beach, California-based burrito chain posted adjusted earnings of $3.48 per share in the fourth quarter, up 21.7% compared to the prior-year quarter. Revenue of $1.61 billion surged 11.6% on a year-over-year basis due strong restaurant comps as well as new restaurant openings. This was partially offset by a slowdown in overseas sales. Analysts had predicted earnings of $3.73 per share on $1.61 billion in revenue.
In a statement, Chairman and CEO Brian Niccol commented on Chipotle's performance.
"We are pleased to report a strong ending to what has been a challenging year," he said. "Despite the difficult backdrop, our ability to pivot and adapt to the rapidly changing needs of our guests is a testament to the durability of our business model and the strength of our team members."
Sales at Chipotle restaurants that remained opened for at least 13 months inched up 5.7%. Having improved toward the end of December to growing 11% in the last week of January depicts how the metric picked up on a sequential basis.
Digital sales
Digital sales remained the highlight of the quarter as the company notched a 177.2% gain. The growth was attributable to more customers ordering online. Digital sales made up 49% of total quarterly revenue.
The chain struck new partnerships last year with third-party delivery services like UberEats and Grubhub (GRUB), which resulted in increased digital orders as well as a decrease in delivery time and cancellations. To support the mammoth growth in digital orders, the company has promised to employ 15,000 new workers in the months ahead.
"Expanding access and convenience through our digital ecosystem has kept the Chipotle brand relevant and with world class talent, an inclusive culture, strong business fundamentals and deep financial strength, we are well prepared to emerge even stronger post-COVID," Niccol said.
Store count and financials
For the fourth quarter ended Dec. 31, Chipotle launched as many as 61 new restaurants, including two relocations. Forty-two of the new restaurants launched during the quarter included a Chipotlane. The company shut down one restaurant.
At the quarter's end, the company's balance of total cash and cash equivalents stood at $1.1 billion with no debt. In addition, Chipotle had $600 million available under its untapped credit facility.
Looking ahead
Chipotle said it would open 200 new outlets this year. If the company reaches its full-year new store opening guidance, its store count will have increased to roughly 2,000 locations.
The company withdrew its financial forecast for 2021, citing the global uncertainty caused by the pandemic.
Disclosure: I do not hold any positions in the stocks mentioned.
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