Chipotle recently released their financial report for the fourth quarter and it looks like they are dominating in their market. Crushing both top and bottom lines shares fully recovered—and then some—after falling 3 percent early in the day. By Tuesday, shares of the fast-food franchise skyrocketed to new highs.
Specifically, Chipotle net sales grew 17.6 percent, to $1.44 billion (versus the $1.4 billion that had been expected). Adjusted earnings per share reached $2.86 (versus the $2.73 that had been expected). Finally, same store sales were up 13.4 percent (besting the 9.8 percent they had expected).
On top of this, digital sales in the fourth quarter grew more than 78 percent, accounting for 19.6 percent of the company’s total sales (up from 18.2 percent in Q3). This is kind of a big deal as digital orders have been growing quickly. More importantly, digital sales are crucial because they typically have higher check averages and create a kind of effortless experience for loyal customers.
CEO Brian Niccol commented, “We had a strong ending to 2019 as Q4 marks the eighth-consecutive quarter of accelerating comparable sales, which highlights that running great restaurants with the right leaders and the right culture is delivering outstanding financial performance.”
Actually, Chipotle opened 80 new restaurants in Q4. 46 of these restaurants—so, more than half—had drive-thru options (which the company calls Chipotlanes). In all, the company opened 66 new Chipotlanes last year (which means some of these were at existing franchises). For 2020, Chipotle expects to open up to 165 new restaurants, with half of these offering a “Chipotlane” reserved specifically for pick up of online/digital orders.
Niccol goes on to say, “For the full year, Chipotle’s average unit volumes exceeded $2.2 million and digital sales surpassed a billion dollars, showing that our key strategies are working, and the Chipotle brand is thriving as we build a sustainable model that helps cultivate a better world.”