DENVER — Chipotle Mexican Grill executives expressed confidence in a near-term comeback a little over a year after the food safety crisis that crippled the burrito chain. Net income for the year ended Dec. 31, 2016, was $22,938,000, equal to 78c per share on the common stock, down 95% from $475,602,000, or $15.30 per share, in the prior fiscal year. Revenue declined 13% to $3,904,384,000 from $4,501,223,000. The decline in revenue was driven by a 20% decline in comparable restaurant sales that partially was offset by revenue from new restaurants.
Net income for the fourth quarter decreased to $15,975,000, or 55c per share, down 76% from $67,874,000, or $2.19, in the prior-year period. Revenue advanced to $1,034,560,000, up 3.7% from $997,507,000 in the year-ago quarter. Comparable restaurant sales declined 4.8% for the quarter.
|Steve Ells, chairman and c.e.o. of Chipotle|
“Today I am more confident than ever about Chipotle’s future,” said Steve Ells, chairman and chief executive officer of Chipotle Mexican Grill, during a Feb. 2 earnings call with financial analysts.
“Also confident in the significant changes we made throughout the last year to position Chipotle for a strong performance in 2017,” he added. “These efforts include the implementation of an industry-leading food safety system; investments in digital to enhance customer convenience of ordering; expanded use of consumer data and analysis; and changes to our leadership to strengthen our culture and sharpen our focus on the customer.”
The company continues its efforts to recapture traffic and sales following a multi-state E. coli outbreak in October 2015 and a norovirus incident traced to a Boston-area Chipotle restaurant the following month.
“Over the second half of 2016 we attracted millions of new or lapsed customers, and we are pleased with the rate at which these new customers are converting from new or lapsed to regular customers,” Mr. Ells said.
Chipotle also is preparing to launch its largest advertising campaign in company history in April.
“These marketing initiatives combined with the ongoing improvements in the customer experience and improved digital ordering channels gives me great confidence that 2017 is teed up to be a very successful year for Chipotle,” Mr. Ells said.
For the year ahead, the company expects to achieve comparable restaurant sales increases in the high-single digits and 195 to 210 new restaurant openings. For the first four weeks of January, comparable sales were up 26%, said Jack Hartung, chief financial officer.“We faced a number of challenges over the past 14 months,” Mr. Hartung said. “We’ve also realigned our focus and have made important investments that are now beginning to take hold. We have reevaluated and refocused our operations, we strengthened our marketing capabilities. We’ve introduced important enhancements related to digital and we’ve begun to capture operating efficiencies, all of which make us optimistic about what we can accomplish in 2017.”