Chipotle profit misses estimates as COVID-19 costs rise



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Mexican Grill Chipotle On Tuesday, Inc missed Wall Street estimates for quarterly profit, affected by the costs of maintaining operations during the COVID-19 pandemic, as shares of the burrito chain fell nearly 2% after hours. ‘opening.

Strong digital operations within the fast-casual chain, a standout player in the industry during the coronavirus, have helped it weather the worst of the impact, although its spending has soared as it strengthens its delivery network.

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Digital sales nearly tripled and led to a 5.7% increase in same-store sales, helped by a sharp increase in online orders in parts of the United States.

Total revenue rose 11.6% to $ 1.6 billion for the fourth quarter ended Dec.31, the company said.

Excluding one-off items, the company earned $ 3.48 per share, missing the estimate of $ 3.73, according to IBES data from Refinitiv.

“It is now well established that November was weak across the space, and while Chipotle is resilient, it is not immune,” Piper Sandler analysts wrote in a note after the report on the results.

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The company’s share price has risen more than 10% so far this year and 66% in 2020 – by far the best-performing stock in the restaurant industry, according to Credit Suisse.

Its success stems in part from its ability to accelerate digital sales during the pandemic. For the year 2020, Chipotle’s digital sales grew 174.1% to $ 2.8 billion and accounted for 46.2% of sales. About half of digital sales were for delivery slips.

The chain is testing quesadillas, as well as smoked brisket, after its nationwide launch in January of cauliflower rice with cilantro and lime for a limited time.

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Chipotle did not provide sales forecasts during the pandemic. However, for 2021, he announced that he plans to open 200 new restaurants and have an effective tax rate of between 25% and 27%.

About 70% of its new restaurants will include the digital “Chipotlane” drive-thrus. Sales at sites with Chipotlanes are about 10% higher on average than those without, CTO Curt Garner told Reuters in an interview.

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The company is also testing “in-car” pickup, where an employee brings orders to a customer’s car, at 29 restaurants.

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“What we’ve seen so far is 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)

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