Chipotle shows some traction in turnaround effort

chipotle sign

Chipotle Mexican Grill showed signs of recovery in the financial results it released today, with the chain boasting of a 14.7% rise in same-store sales for December and an expansion of restaurant operating margins for the whole fourth to 13.5%.

But the figures indicate the onetime high-flier has yet to get back to where it was before a series of food poisoning incidents sent sales and profits into a free fall at the end of 2015. Same-store sales for the whole fourth quarter of 2016 were down 4.8% from the prior year, and margins still fell short of the year-ago quarter’s 19.6%.

Comps for 2016 dropped 20.4%.

Store-level margins had dwindled as low as 6.8% during 2016, and comps at one point were running more than 29% below the year-ago levels, with most of the damage stemming from a plummet in traffic.

Chipotle’s net income for 2016 was $22.9 million, compared with $475.6 million for 2015, when 240 fewer stores were in operation.

Management had warned in mid-January that results for the last quarter of 2016 would not be as robust as analysts had hoped, but had not revealed December sales at that time.

“We are energized and focused to achieve our goals in 2017, and to return to a path of long-term value creation for our shareholders,” CEO Steve Ells said in a statement detailing 2016 results.

He stressed that the chain would continue to court customers by improving restaurant operations, brainstorming new marketing approaches and pushing ahead with plans to land more digital orders.


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