NEWPORT BEACH, CALIF. — Menu innovation and marketing initiatives helped Chipotle Mexican Grill, Inc. deliver its eighth consecutive quarter of accelerating comparable sales. Brian R. Niccol, chief executive officer of the Newport Beach-based restaurant company, credited the introduction of Lifestyle Bowls and carne asada as contributors to a strong performance.
For the full year ended Dec. 31, 2019, Chipotle Mexican Grill earned $350,158,000, equal to $12.62 per share on the common stock, up 98% from $176,553,000, or $6.35, in the previous fiscal year. Excluding the impact of legal expenses, corporate restructuring, restaurant asset impairment and certain other costs, adjusted net income was $397,665,000 for the year, up from adjusted net income of $253,406,000 the year before.
Revenue for the year totaled $5,586,369,000, up 15% from $4,864,985,000.
Fourth-quarter net income was $72,416,000, or $2.61 per share, up 126% from $32,019,000, or $1.15, in the prior-year period. Adjusted net income, which excludes the impact of legal expenses, corporate restructuring and certain other costs, was $81,022,000, up from $48,053,000.
Revenue increased 18% to $1,440,224,000 from $1,225,061,000 in the year-ago quarter.
Comparable restaurant sales increased 11% for the year and 13% for the quarter.
“There’s no doubt that marketing helped drive impressive sales during 2019, and based on the plans we have in place, I expect more of the same in 2020,” Mr. Niccol said during a Feb. 4 earnings call. “Our marketing efforts this year were elevated because we used the stage-gate process to develop innovation that leads food culture and meets guest requests. We are pleased to have rolled out several successful menu items that were validated by this process. This included our pre-configured diet-driven Lifestyle Bowls, which were launched in January 2019 and received terrific feedback as they showed that whatever lifestyle or diet you want to pursue, Chipotle’s real ingredients are a perfect fit.
“We recently enhanced this platform by adding a new Supergreen salad mix composed of hand-cut romaine, baby kale and baby spinach as well as a Whole30 chicken to provide guests with specific dietary goals more options.”
Carne asada, a premium steak option that launched in September, “continues to exceed our expectations,” he added.
“As a result, our supply chain team is exploring options to see if we can add this as a permanent menu item at some point in the future, contingent, of course, on us finding enough supply of high-quality ingredients that meet our ‘food with integrity’ standards,” Mr. Niccol said. “As you think about 2020 and beyond, our goal is to continue introducing one to two new menu items on average per year. Our pipeline remains robust with Queso Blanco, quesadillas and beverages currently being tested in various markets.”
Digital technology represents another opportunity for growth. In the latest quarter, the company’s digital sales totaled $282 million, up 78% year-over-year and accounting for nearly 20% of total sales.
“In just three years, we have quadrupled the digital business, achieving over $1 billion in sales during 2019,” Mr. Niccol said. “Now that we have many of these digital tools in place, 2020 will be about using them more efficiently and really leveraging our rewards program, which currently has more than 8.5 million enrolled members and is one of the fastest-growing restaurant loyalty programs in history. While in 2019, we focused on member growth. In 2020, we will not only further increase enrollment, but more importantly, look to optimize the use of database marketing to incent behaviors as we build out our (customer relationship management) capabilities.”