Chipotle delivers strong Q4; to open 285 to 315 new locations in 2024
Chipotle Mexican Grill smashed fourth-quarter earnings and sales expectations amid traffic gains that bucked recent industry trends.
The quick-service giant’s net sales rose 15.4% to $2.52 billion in the quarter ended Dec. 31, topping estimates of $2.49 billion. Digital sales represented 36.1% of total food and beverage revenue.
Chipotle’s fourth-quarter comparable restaurant sales rose 8.4% and traffic increased 7.4%. In contrast, McDonald’s and Starbucks both reported traffic declines in their most recent quarters.
Net income totaled $282.1 million, or $10.21 per share, up from $223.7 million, or $8.02 per share, in the year-ago period. Adjusted earnings came to $10.36 per share, far ahead of the $9.75 per share analysts expected
Chipotle, which opened 271 restaurants in 2023, said it plans to open between 285 and 315 new outposts in 2024. The company, which has set a long-term target of 7,000 restaurants in North America, ended the year with a total of 3,437 locations.
For the full year, Chipotle reported that its total revenue rose 14.3% to $9.9 billion, driven by a 7.9% increase in comparable restaurant sales attributable to higher transactions of 5.0%, an increase in average check of 2.9% and, to a lesser extent, new restaurant openings. Digital sales represented 37.4% of total food and beverage revenue.
Net income for 2023 was $1.23 billion, or $44.34 per share, compared to net income of $899.1 million, or $32.04 per share for 2022.
"2023 was an outstanding year where we delivered strong transaction growth driven by throughput and menu innovation, opened a record number of new restaurants, surpassed $3 million in AUVs and formed our first international partnership," said Brian Niccol, chairman and CEO, Chipotle. "I am more confident than ever that we have the right people and the right strategy to achieve our long-term growth goals of reaching 7,000 restaurants in North America, $4 million in AUVs, expanding our industry leading margins and returns and furthering our purpose of Cultivating a Better World globally."
Chipotle has been investing in technology to enhance and streamline its in-store operations. It has been piloting a customized autonomous kitchen assistant (nicknamed “Chippy") to cook and season tortilla chips since March 2022 and testing a robotic avocado processing prototype known as “Autocado” since July 2023.
The chain also continues to bolster its workforce. In January, it launched a campaign to hire 19,000 new employees for its “burrito season,” which runs from March to May. It also added new financial and mental health benefits.
Chipotle is the only restaurant company of its size that owns and operates all its restaurants in North America and Europe.