Chipotle Mexican Grill released the earnings results from its fourth fiscal quarter after closing bell tonight, reporting earnings per share of $2.17, compared to the consensus of $1.85 per share, and revenue of $988 million, against the consensus of $1.01 billion. The fast casual dining chain reported earnings of $3.84 per share and revenue of $1.07 billion in the fourth quarter of 2014.
Chipotle Mexican Grill’s sales fall amid food scare
Chipotle’s revenue declined 6.8% year over year as comparable restaurant sales fell 14.6%. Net income fell 44% to $67.9 million. Management cited the negative media attention as a result of foodborne illnesses at multiple restaurants.
Food costs fell 120 basis points to 33.8% of revenue year over year due to declines in dairy, beef and avocado prices. Also Chipotle Mexican Grill benefited from its menu price increase, although costs in food testing and waste partially offset the benefit. The restaurant level operating margin fell 700 basis points to 19.6% as a result of the large decline in comparable restaurant sales and non-recurring costs connected to the e. coli outbreaks.
For this year, Chipotle management didn’t provide much guidance other than to say they plan to open 220 to 235 restaurants this year and expect an effective tax rate of about 39% for the full year.
Chipotle updates CDC probe
Management also announced that the Centers for Disease Control finished its investigation into the e. coli outbreaks.
“We are pleased to have this behind us and can place our full energies to implementing our enhanced food safety plan that will establish Chipotle as an industry leader in food safety,” said Founder, Chairman and Co-CEO Steve Ells in a statement. “We are extremely focused on executing this program, which designs layers of redundancy and enhanced safety measures to reduce the food safety risk to a level as near to zero as is possible. By adding these programs to an already strong and proven food culture, we strongly believe that we can establish Chipotle as a leader in food safety just as we have become a leader in our quest for the very best ingredients we can find.”
Shares of Chipotle fell by as much as 1.68% to $468 in after-hours trading.