Chipotle Mexican Grill (NYSE:CMG) shares fell on Wednesday after the fast-casual restaurant chain delivered fourth-quarter results that missed expectations.
Total revenue for the three months to December 31, 2022, rose 11% to $2.18 billion, below the $2.23 billion expected by the Street, while comparable restaurant sales increased by 5.6%.
The company attributed the rise in revenue to a 5.6% increase in comparable restaurant sales as well as the 100 new restaurants it opened over the quarter. Adjusted earnings jumped 48.6% to $8.29 per share, but still missed the $8.90 target pencilled in by analysts.
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The company said in-restaurant sales increased by more than 17% over the quarter while digital sales represented 37% of total food and beverage revenue.
Food, beverage and packaging costs in the fourth quarter were 29% of total revenue, a decrease of 230 basis points compared to the fourth quarter of 2021, Chipotle said, adding that food costs benefited from menu price increases and, to a lesser extent, lower avocado prices. These benefits were partially offset by inflation across the menu primarily due to higher costs for dairy and tortillas.
For the full year, total revenue increased 14% to $8.6 billion and adjusted diluted earnings per share rose 29% to $32.78.
"We delivered strong growth in 2022, expanding average unit volumes and restaurant level margin, while opening the highest number of new restaurants in six years, despite facing a challenging and fluid macro environment," Chipotle CEO Brian Niccol said in a statement.
"Our continued focus on recruiting and retaining the best people, delivering Chipotle's operational standards with delicious food prepared fresh daily uniquely positions Chipotle to successfully expand to 7,000 restaurants over the long term.”
Based on January comparable restaurant sales growth in the low-double-digits, Chipotle said it expects 1Q 2023 comparable restaurant sales growth in the high-single-digits
It plans to open 255 to 285 new restaurants, including 10 to 15 relocations to add a Chipotlane, assuming utility, construction, permit and material supply delays do not worsen, it said.
Chipotle’s shares traded 3.7% lower at $1,629.40 shortly after noon in New York.
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