Chipotle Mexican Grill, Inc. (NYSE: CMG) today reported financial results for its fourth quarter and full year ended December 31, 2010.
Highlights for the fourth quarter of 2010 as compared to the fourth quarter of 2009 include:
- Revenue increased 24.5% to $482.5 million
- Comparable restaurant sales increased 12.6%
- Restaurant level operating margin was 25.9%, an increase of 140 basis points
- Net income was $46.4 million, an increase of 47.0%
- Diluted earnings per share was $1.47, an increase of 48.5%
Highlights for the twelve months ended December 31, 2010 as compared to the prior year include:
- Revenue increased 20.9% to $1.84 billion
- Comparable restaurant sales increased 9.4%
- Restaurant level operating margin was 26.7%, an increase of 180 basis points
- Net income was $ 179.0 million, an increase of 41.1%
- Diluted earnings per share was $5.64, an increase of 42.8%
“Our accomplishments in 2010 were many–opening our first restaurant in London, hitting the 1,000 restaurant milestone, and serving naturally raised barbacoa in all of our restaurants–just to name a few. All of our accomplishments were made possible by remaining focused on our vision to change the way the world thinks about and eats fast food,” said Founder, Chairman, and Co-CEO Steve Ells.
Results for the fourth quarter 2010
Revenue for the quarter was $482.5 million, up 24.5% from the prior year period. The growth in revenue was the result of new restaurants not in the comparable base and a 12.6% increase in comparable restaurant sales. Comparable restaurant sales growth was primarily driven by increased traffic in the quarter.
During the quarter Chipotle opened 62 new restaurants, bringing the total restaurant count to 1,084.
Restaurant level operating margin was 25.9% in the quarter, an increase of 140 basis points over the prior year period. The increase was primarily driven by the impact of comparable restaurant sales growth which was partially offset by increased food costs.
G&A costs were 6.0% of revenue, down 50 basis points from the prior year period. The decrease as a percent of revenue was driven by the impact of comparable restaurant sales growth.
Net income for the fourth quarter of 2010 was $46.4 million, or $1.47 per diluted share, compared to $31.6 million, or $0.99 per diluted share, in the fourth quarter of 2009.
Results for the full year ended December 31, 2010
Revenue for the full year of 2010 was $1.84 billion, up 20.9% from the prior year. The growth in revenue was the result of new restaurants not in the comparable base and a 9.4% increase in comparable restaurant sales. Comparable restaurant sales growth was primarily driven by increased traffic during the year.
For the full year, Chipotle opened 129 restaurants, including one restaurant in London and one in Toronto, Canada.
Restaurant level operating margin was 26.7% for the full year of 2010, an increase of 180 basis points over the prior year period. The increase was primarily driven by the impact of comparable restaurant sales growth.
G&A costs for the full year of 2010 were 6.5% of revenue, which was flat from the prior period. The benefit of comparable restaurant sales growth was offset by increased stock based compensation expense, the biennial All Managers’ Conference, and hiring more employees as we grew.
Net income for the full year of 2010 was $179.0 million, or $5.64 per diluted share, compared to $126.8 million, or $3.95 per diluted share for 2009.
“Top performers, along with a culture of empowerment and striving to reach high standards come together naturally to produce great results. Our top performers demonstrate that they can run better restaurants, cook and serve better food, provide better service, increase throughput in their peak times and operate an efficient business. And our managers do all this while hiring and developing our future leaders. So of course we’re pleased with the great results our high performing teams generate, but it’s even more pleasing to know that it’s our special people culture that’s enabling these results,” commented Monty Moran, Co-CEO.
Outlook
For 2011, management expects the following:
- 135-145 new restaurant openings
- Low single digit comparable restaurant sales growth
- An effective tax rate of approximately 38.3%
Steve Ells, Founder, Chairman and Co-Chief Executive Officer, started Chipotle with the idea that food served fast did not have to be a typical fast food experience. Today, Chipotle continues to offer a focused menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads made from fresh, high-quality raw ingredients, prepared using classic cooking methods and served in a distinctive atmosphere. Through our vision of Food With Integrity, Chipotle is seeking better food not only from using fresh ingredients, but ingredients that are sustainably grown and naturally raised with respect for the animals, the land, and the farmers who produce the food. Chipotle opened its first restaurant in 1993 and currently operates over 1,000 restaurants. For more information, visit chipotle.com.