Chipotle 4Q profit rises despite higher food costs

Chipotle Mexican Grill Inc. reported on Tuesday a 6.8-percent increase in profit for the fourth quarter despite higher commodity costs for beef, salsa ingredients and dairy.

For the quarter ended Dec. 31, Chipotle recorded net income of $61.4 million, or $1.95 per share, compared with $57.5 million, or $1.81 per share, in the year-earlier quarter.

As reported earlier, revenue grew by 17 percent to $699.2 million on a same-store sales increase of 3.8 percent, mostly driven by traffic.

Food costs during the quarter, however, rose 130 basis points to comprise 33.5 percent of the company's revenue, primarily due to increases in prices of the beef used for steak and barbacoa. The higher cost of salsa ingredients and dairy products like cheese and sour cream also contributed to the impact on revenue.

For the entire year, Chipotle reported net income totaled $278 million, or $8.75 per share, compared with $214.9 million, or $6.76 per share, for fiscal 2011.

Revenue for 2012 rose 20 percent to $2.73 billion, driven by a 7.1-percent increase in same-store sales. Traffic also rose for the year, but increased menu prices also contributed to the same-store sales jump, the company said.

During fiscal 2012, Chipotle opened 183 new restaurants for a total of 1,410 units.

"Our empowered restaurant teams once again were able to attract more people into our restaurants, creating positive comparable sales at Chipotle despite a sluggish economy and the roll-off of our price increases," said Monty Moran, co-chief executive of Chipotle, said in a statement. "We feel confident in our continued ability to drive sales growth in 2013 through a combination of new restaurant growth and our top performing empowered restaurant teams creating an extraordinary dining experience for our customers."

In its outlook for 2013, the company said it expects to open between 165 and 180 new restaurants.

Same-store sales for the year are projected to be flat to rising by low single digits, excluding additional menu price increases.

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