On Wednesday, Chipotle reported quarterly earnings and revenues that hit analysts' expectations, thanks to increasing foot traffic and price increases on the menu.
reported compared to what Wall Street expected, based on a Refinitive Analysts Survey:
- Earnings per share: $ 1.72, adjusted, against $ 1.37, expected  Revenue: $ 1.23 billion compared to $ 1.194 billion expected
- Same store growth: 6.1 percent versus 4.49 percent 19659010] In the fourth quarter, digital orders increased 65.9 percent and amounted to $ 158.6 million in sales, or 12.9 per cent of sales. To cope with an increasing number of digital orders, Chipotle updates its kitchen with a second assembly line exclusively for these orders. It has several upgrades, such as pickup shelf to display online orders, in the works. These shelves are in 1000 of their restaurants so far.
The company also tests "Chipotlanes", implementation windows for customers to retrieve their online orders. So far, 10 of their locations have function. Niccol told analysts at the conference call that Chipotlanes helps both digital and general sales for those stores, but that it is still in the testing phase. In the future, the company plans to add online shopping for shopping malls to new restaurants instead of rebuilding older stores.
In September, the company launched a new advertising campaign, called "For Real", to showcase its fresh ingredients and cooking. The company also saw a bump at the end of the quarter when it ran a free shipping bowl campaign to promote the partnership with Doordash. Niccol said that new or rare customers accounted for almost half of those who took advantage of the offer.
The company also announced its intention to launch a loyalty program nationwide this year. It started testing the program in October in several US cities to win back customers. The program is yet another way to run diners to order their Chipotle burritos digitally. Niccol said the company is still in the early days of understanding the implications of its pilot, but that it is based on momentum.
The Mexican food chain reported a fourth quarter net revenue of $ 32.0 million, or $ 1.15 per share, and declined from
Excluding restructuring costs, business restructuring and other excluded costs, Chipotle earned $ 1.72 per share, and topped at $ 1.37 per share, expected by analysts surveyed by Refinitiv.
19659017] rose 10.4 percent to $ 1.23 billion, peaked at $ 1.19 billion, aided by strong same store sales. The stores open at least one year as saw sales increase by 6.1 per cent in the quarter. Prices rose by 3.3 per cent in the quarter.
The company is planning "modest" price increases this year, as the company says will be lower than previous increases. It plans to increase to compensate for wage growth of 4 to 5 per cent.
"The biggest challenge is going to be wage growth," Niccol said.
The Mexican food chain said it began planning its employees more effectively during the third quarter, and hopes to see the changes continue to contribute to profit margins throughout the year.
In 2019, Chipotle forecasts the same sales increase in the mid-single digits. It also plans to open between 140 and 155 new locations, largely in the second half of the year.
The company also announced on Wednesday that the board approved an additional $ 100 million of share purchases. The buy-back authorization adds to its previous approval of $ 57.6 million. During 2018, the company spent $ 161 million on buybacks.