DOW JONES NEWSWIRES
Chipotle Mexican Grill Inc.'s (CMG) fourth-quarter net income
fell 3.2% on lower margins caused by increased food costs.
Shares rose 14% to $53.99 in after-hours trading as the
quarter's results beat expectations and Chipotle announced it will
open fewer stores this year than planned.
Several analysts who cover the company in recent months have
lowered their investment ratings and price targets, warning
investors that its store traffic was slowing, along with peers, in
the "fast-casual" dining segment. The company said Wednesday that
customer visits declined, though that was offset by higher
prices.
The burrito restaurant chain reported net income of $17 million,
or 52 cents a share, down from $17.5 million, or 53 cents a share,
a year earlier. Revenue rose 19% to $345.3 million as same-store
sales rose 3.5%.
Analysts polled by Thomson Reuters were looking for earnings of
49 cents a share on revenue of $339 million.
The company said it opened 39 new restaurants in the quarter,
putting its count at more than 830 restaurants.
Restaurant-level operating margins fell to 21.1% from 22.1% due
to higher food costs that offset menu price increases.
Looking ahead, Chipotle still expects 2009 same-store sales
growth in the low-single digits. But the company reduced its plans
for new openings in 2009, projecting 120 to 130, down from its
previous forecast of 135 to 145.
In January, the company announced plans to open restaurants in
Europe, beginning in London late this year. The move shows the
company continues to expand at a time when competitors founder
because of a sharp pullback in discretionary spending.
Formerly a subsidiary of McDonald's Corp. (MCD), Chipotle -
named for a dried, smoked jalapeno pepper - was founded in 1993 and
went public in January 2006, with the stock price doubling to $44
on the first day.
-By Aja Carmichael, Dow Jones Newswires; 201-938-5218;
aja.carmichael@dowjones.com