Fourth quarter highlights, year over year:
Revenue increased 17.6% to
Comparable restaurant sales increased 13.4% with no net impact from loyalty deferral, and included 8.0% comparable restaurant transactions growth
Digital sales grew 78.3% and accounted for 19.6% of sales
Restaurant level operating margin was 19.2%, an increase of 220 bps
Diluted earnings per share was
Opened 80 new restaurants including one relocation, and closed three
Full year 2019 highlights, year over year:
Revenue increased 14.8% to
Comparable restaurant sales increased 11.1%, net of 20 bps from loyalty deferral, and included 7.0% comparable restaurant transactions growth
Digital sales grew 90.3% and accounted for 18.0% of sales
Restaurant level operating margin was 20.5%, an increase of 180 bps
Diluted earnings per share was
Opened 140 new restaurants including two relocations, and closed seven
1 Adjusted net income and adjusted diluted earnings per share are non-GAAP financial measures. Reconciliations to GAAP measures and further information are set forth in the table at the end of this press release.
'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,' said
Fourth quarter 2019 results:
Revenue for the quarter was
We opened a record 80 new restaurants including one relocation during the quarter and closed three. This included 46 Chipotlanes resulting in a total of 66 Chipotlanes at year-end. For 2020, we anticipate opening 150-165 new restaurants with more than half including a Chipotlane.
Food, beverage and packaging costs were 33.1% of revenue, a decrease of 10 bps compared to the fourth quarter of 2018. The decrease was primarily due to the benefit of menu price increases and to a lesser extent favorable avocado pricing, partially offset by increased costs of several other ingredients, including carne asada and expenses related to loyalty.
Restaurant level operating margin was 19.2% in the quarter, an improvement from 17.0% in the fourth quarter of 2018. The improvement was driven primarily by leverage from the comparable restaurant sales increase, partially offset by wage inflation at the crew level and increased delivery expense.
General and administrative expenses were
The GAAP effective tax rate was 28.3% in the fourth quarter of 2019, compared to 26.3% in the fourth quarter of 2018. The increase was primarily due to current year increases in non-deductible executive compensation. On a non-GAAP basis, the 2019 fourth quarter effective tax rate was 27.0%.
Net income for the fourth quarter of 2019 was
During the quarter, our Board of Directors approved the investment of up to an additional
Full year 2019 results:
Revenue for 2019 was
We opened 140 new restaurants during the year, including two relocations, and closed seven, in-line with previous guidance, bringing the total restaurant count at year-end to 2,622.
Food, beverage and packaging costs were 33.1% of revenue, an increase of 20 bps compared to 2018. The increase was driven by higher costs of several ingredients including carne asada, dairy, avocados, and expenses related to loyalty, partially offset by the benefit of menu price increases.
Restaurant level operating margin was 20.5% for 2019, an improvement from 18.7% in 2018. The improvement was driven primarily by leverage from the comparable restaurant sales increase, partially offset by higher food costs, wage inflation at the crew level, increased delivery expense, and increased marketing spend.
General and administrative expenses were
The GAAP effective tax rate was 23.6% in 2019, compared to 34.2% in 2018. The decrease was primarily due to excess benefits from stock-based compensation and a year over year decrease in tax expense related to expirations of stock-based awards, partially offset by current year increases in non-deductible executive compensation. On a non-GAAP basis, the 2019 full year effective tax rate was 22.4%.
Net income for 2019 was
Outlook
For 2020, management is anticipating the following:
Mid-single digit comparable restaurant sales growth
150 to 165 new restaurant openings
An estimated effective full year tax rate between 26% and 29%
Definitions
The following definitions apply to these terms as used throughout this release:
Comparable restaurant sales, or sales comps, and comparable restaurant transactions, represent the change in period-over-period sales or transactions for restaurants in operation for at least 13 full calendar months.
Average restaurant sales refers to the average trailing 12-month sales for restaurants in operation for at least 12 full calendar months.
Restaurant level operating margin represents total revenue less direct restaurant operating costs, expressed as a percent of total revenue.
Conference Call Details
The conference call can be accessed live over the phone by dialing 1-888-317-6003 or for international callers by dialing 1-412-317-6061 and use code: 7638969. The call will be webcast live from the company's website on the investor relations page at ir.chipotle.com/events. An archived webcast will be available approximately one hour after the end of the call.
About
Forward-Looking Statements
Certain statements in this press release, including statements under the heading 'Outlook' about our anticipated comparable restaurant sales, effective tax rate and estimated number of new restaurant openings in 2020, are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We use words such as 'anticipate', 'believe', 'could', 'should', 'estimate', 'expect', 'intend', 'project', 'target', and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this press release are based on currently available operating, financial and competitive information available to us as of the date of this release and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements, including but not limited to: risks of food safety and food-borne illnesses and other health concerns about our food; risks associated with our reliance on certain information technology systems and potential failures or interruptions; privacy and cyber security risks related to our acceptance of electronic payments or electronic processing of confidential customer or employee information; the impact of competition, including from sources outside the restaurant industry; the increasingly competitive labor market and our ability to attract and retain qualified employees; the impact of federal, state or local government regulations relating to our employees, restaurant design and construction, or the sale of food or alcoholic beverages; our ability to achieve our planned growth, such as the availability of suitable new restaurant sites; increases in ingredient and other operating costs due to our Food With Integrity philosophy, tariffs or trade restrictions and supply shortages; the uncertainty of our ability to achieve expected levels of comparable restaurant sales due to factors such as changes in consumers' perceptions of our brand, including as a result of actual or rumored food safety concerns or other negative publicity, decreased overall consumer spending, or the inability to increase menu prices or realize the benefits of menu price increases; risks associated with our increased focus on our digital business, including risks arising from our reliance on third party delivery services; risks relating to litigation, including possible governmental actions related to food safety incidents and potential class action litigation regarding employment laws, advertising claims or other matters; and other risk factors described from time to time in our
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https://newsroom.chipotle.com/2020-02-04-Chipotle-Announces-Fourth-Quarter-And-Full-Year-2019-Results
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