Chipotle Mexican Grill, Inc. (NYSE: CMG) shares fell more than 10% Wednesday after the restaurant chain reported financial results for its fourth quarter and year ended December 31, 2017.
Revenue for the quarter was $1.1 billion, an increase of 7.3% from the fourth quarter of 2016. The increase in revenue was driven by new restaurant openings and to a lesser extent by a 0.9% increase in comparable restaurant sales. Comparable restaurants sales include a 0.6% reduction related to deferred revenue that was recognized during the fourth quarter of 2016 related to our Chiptopia Summer Rewards program.
"We expect negative traffic to persist," Stifel analyst Chris O'Cull wrote in a research note Tuesday. "The company seems to be relying on easier comparisons this summer, rather than any initiatives to reverse the trend. We believe improving traffic could prove especially difficult following the 5 percent menu price increase."
After the earnings report, Chipotle also anonounced enhancements to benefits that will reach all of its 71,000 employees. These enhancements, which include special cash and stock bonuses and enhanced paid parental leave, are part of the company's ongoing commitment to advancing both the professional and personal lives of its employees. Resulting from savings due to the Tax Cuts and Jobs Act, the new benefits have already begun rolling out to Chipotle employees.
"We have always been proud of our ability to attract and retain top talent who share our passion for cooking delicious food by hand and creating an extraordinary guest experience," said Steve Ells, founder, chairman and CEO at Chipotle. "We're giving back to these committed, motivated, and hardworking team members who have made Chipotle what it is today."
01 Apr, 2020