NEWPORT BEACH, CALIF. — Chipotle Mexican Grill, Inc. saw strong digital momentum in the recent quarter, even as in-restaurant dining began to reopen. Sales from online and mobile orders for pickup or delivery transactions increased more than 216% and accounted for nearly 61% of sales for the three-month period.
Net income for the second quarter ended June 30 plummeted to $8.2 million, equal to 29¢ per share on the common stock, which compared with $91 million, or $3.28 per share, in the prior-year period. The company incurred expenses related to restaurant asset impairment and closure costs and corporate restructuring in the latest quarter. Excluding these charges, adjusted net income was $11.4 million.
Revenue for the quarter slid 4.8% to $1.36 billion from $1.43 billion.
Comparable restaurant sales declined 9.8%, reflecting a sharp dip in April from the year-ago period followed by sequential improvement in May and June. About 30 of the company’s 2,669 restaurants, mostly those located in malls and shopping centers, remain closed.
“We began to open dine-in capabilities in the middle of May and currently have about 85% of our restaurants offering limited in-restaurant and/or patio dining, with the remaining being open for to-go services, which includes delivery, order-ahead and pickup, and coming into the restaurant and ordering a meal that is taken then off-premise,” Brian R. Niccol, chairman and chief executive officer, said during a July 22 earnings call. “Encouragingly, since sales troughed in late March, we’ve been able to retain 70% to 80% of our digital sales gains while recovering 40% to 50% of our in-store sales. This supports our thesis that digital tends to be highly sticky and was a key factor in helping improve our sales performance as the quarter progressed.”
Over the past 18 months, Chipotle has introduced several new menu items, including Lifestyle Bowls, carne asada, supergreens salad mix and queso blanco. Most recently, the company announced a range of organic aguas frescas, lemonades and tea developed in partnership with Tractor Beverage Co. Chipotle also is testing chipotle-lime cauliflower rice in select locations and has begun offering quesadillas as a digital exclusive.
“While COVID, of course, has delayed testing of menu items over the past few months, the pipeline of potential new options continues to build,” Mr. Niccol said. “Now that regions are starting to reopen, we anticipate being able to test new items again, which will allow us to deliver on our goal of rolling out one to two new menu items on average per year.”
Chipotle declined to provide full-year fiscal guidance due to continued uncertainty related to the economic impacts of COVID-19.
Six-month net income totaled $84.6 million, equal to $3.04 per share, down from $179.2 million, or $6.47 per share. Revenue for the first two quarters increased to $2.8 billion from $2.7 billion.