Reporting strong results for fiscal 2021, Chipotle Mexican Grill on Tuesday upped its target for unit growth, gunning for at least 7,000 units across North America, rather than the previous goal of 6,000.
The Newport Beach, Calif.-based chain reported comparable restaurant sales up 15.2% for the Dec. 31-ended fourth quarter, and up 19.3% for the full fiscal year.
Chipotle opened 78 new restaurants during the quarter and continued growing digital sales, which increased 3.8% during the quarter to account for 41.6% of sales. For the year, 215 new restaurants opened, and digital sales grew 24.7% to account for 45.6% of sales.
Brian Niccol, Chipotle’s chair and CEO, said in a statement, “2021 was an outstanding year for Chipotle, highlighting the strength and resiliency of our brand. Together, we accomplished many incredible things as our passionate employees remained dedicated to delivering excellent guest experiences, aligned with our purpose and values. Moving forward, we believe expanding access and convenience through our digital ecosystem, accelerating unit growth, and continuing to develop and support our restaurant employees, will put us in a much stronger competitive position.”
Throughout 2021, Niccol said he believed the 2,950-unit Chipotle could roughly double in size to more than 6,000 across North America. The company has developed multiple formats to drive that growth, including the recently launched all-digital unit with a drive-thru and pickup window, dubbed the Chipotlane Digital Kitchen. The prototype opened in December in Cuyahoga Falls, Ohio.
On Tuesday, Niccol said small-town Chipotle locations have proven to deliver the same or even better unit economics than traditional locations. Now Niccol is pledging to reach at least 7,000 units across North America, saying the company is building a real estate pipeline that will accelerate the pace of growth to between 8% to 10% per year, with more than 80% hosting a Chipotlane drive-thru.
In 2022, the chain plans to open between 235 and 250 new restaurants, including five to 10 relocations to add a Chipotlane — assuming pandemic-related construction and permit delays don’t worsen, the company added.
Revenues increased 22% during the quarter to $2 billion. Chipotle credited “healthy demand” for the smoked brisket LTO that debuted in September, as well as strength in digital sales and menu price increases.
Same-store sales moderated during the latter half of the quarter, thanks to the Omicron variant and challenging winter weather. Food and beverage costs also increased 60 basis points to 31.6% of revenue during the quarter, largely due to higher beef and freight costs, as well as avocado costs. But the menu price increases and strong comp sales helped keep margins up, despite the added burden of wage inflation, the company said.
Net income for the quarter was $133.5 million, or $4.69 per share, down from $191 million, or $6.69 per share, which included a tax benefit. Excluding legal and other expenses, adjusted net income was $159.1 million, or $5.58 per share.
For the year, revenue was $7.5 billion, up 26.1%. Net income was $653 million, or $22.90 per share, compared with $355.8 million, or $12.52 per share, for 2020. Adjusted net income was $724.8 million, or $25.42 per share.
CORRECTION: This story has been updated to correct the unit count outlook for 2022.
Contact Lisa Jennings at [email protected]
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