Although Chipotle reported today that its revenue increased by 3.7 percent to $1 billion for the fourth quarter and year ending Dec. 31, 2016, the rest of its numbers weren’t so great. Comparable restaurant sales declined 4.8 percent, and net income was $16 million, a decrease from $67.9 million.
Despite the news CEO Steve Ells said he is energized and focused on getting the brand back to a path of long-term value creation for shareholders.
“Returning to our roots of what originally made Chipotle great has helped refocus all of our strategies toward the guest experience,” he said in a company press release.
The chain will succeed, he said, by continuing to simplify and improve restaurant operations, utilize creative marketing to rebuild the brand and further the roll-out of digital sales efforts.
“All three of these strategic initiatives are centered on improving the guest experience and restoring customer affinity for the Chipotle brand, and we are confident in our teams’ abilities as we start this new year,” Ells said.
Other Q4highlights:
- Restaurant-level operating margin was 13.5 percent, a decrease from 19.6 percent.
- Diluted earnings per share was $0.55, a decrease from $2.17.
- Comparable restaurant sales for the month of December increased 14.7 percent.
- Opened 72 new restaurants.
Overview for the year compared to 2015
- Revenue decreased 13.3 percent to $3.9 billion.
- Comparable restaurant sales decreased 20.4 percent.
- Restaurant level-operating margin was 12.8 percent, a decrease from 26.1 percent.
- Net income was $22.9 million, a decrease from net income of $475.6 million.
- Diluted earnings per share was $0.77, a decrease from $15.10.
- Opened 240 restaurants, net of three relocations or closures.
Outlook
For 2017, management is targeting the following:
- Comparable restaurant sales increases in the high-single digits.
- 195-210 restaurant openings.
- An estimated effective full-year tax rate to be between 39 percent and 39.5 percent, which will be impacted by volatility due to a recently issued accounting standard that changes how we account for taxes associated with stock-based compensation awards.
