The Wall Street Journal-20080215-Chipotle Posts 62- Net Increase- Shares Fall After Hours
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Chipotle Mexican Grill Inc.'s fourth-quarter net income climbed 62% as same-store sales grew 11% on an increase in customer visits. But its shares fell 13% in after-hours trading as the results failed to meet Wall Street expectations.
The Denver-based burrito-restaurant chain reported net income of $17.5 million, or 53 cents a share, up from $10.8 million, or 33 cents a share, a year earlier. Revenue jumped 31% to $288.9 million.
Analysts' average estimates were for earnings of 55 cents a share on revenue of $289 million, according to a poll by Thomson Financial.
Food, beverage and packaging costs climbed 32% to $92.2 million, partly because 37 new restaurants opened in the quarter. Labor costs rose 26% to $77.5 million.
The operating margin rose to 22.1% from 20.3% because of labor efficiencies and menu price increases.
Founder and Chief Executive Steve Ells attributed the results "to our continued focus on changing the way the world thinks about and eats fast food." He added, "We continue to spend more on our food as a percentage of revenue than any other restaurant company, and that is strengthening our bond with customers, as we are able to deliver better tasting food, and a better dining experience."
The company confirmed plans to open 130 to 140 new restaurants in 2008, compared with 125 in 2007. It now has more than 700 restaurants.
Formerly a subsidiary of McDonald's Corp., Chipotle -- named for a dried, smoked jalapeno pepper -- was founded in 1993 and went public in January 2006, with the stock price doubling to $44 on the first day. It is in the fastest-growing segment of the $330 billion U.S. restaurant industry, called "fast-casual" dining.
Chipotle said it expects same-store sales growth in the low to midsingle-digit percentage range, unchanged from its October forecast.
Chipotle's shares were at $94.25, down $14.40, or 13%, in after- hours trading. They have fallen 34% since hitting a 52-week high of $141.30 on Oct. 31.
