Chipotle Mexican Grill executives sounded an optimistic note for the coming year during the company's fourth-quarter earnings call, despite an anticipated double-digit rise in costs for the company's naturally cultivated commodities.
Montgomery Moran, co-CEO of Chipotle, said the company expects to open 155–165 new Chipotle locations in 2012.
"While this is more restaurants than we've ever opened in a single year, we are confident," Moran said, citing the "quality of what's in the real estate pipeline."
Chipotle is also in the early stages of implementing a new recruitment strategy, Moran said, and will soon roll out a new software system "that provides better analytics to help us target the very best applicants possible." The company's recruitment efforts will target college campuses, and Chipotle will relaunch an employee referral bonus program, he said.
John Hartung, Chipotle's chief financial officer, said the company had achieved a sixth consecutive quarter of double-digit increases in comparable store sales in the fourth quarter. Average restaurant sales passed the $2 million mark for the first time, which Hartung said was due to increased store traffic. Sixty-seven new restaurants opened in the fourth quarter, he said.
Steve Ells, founder of the concept, told investors that the “Food with Integrity” quick serve will open a second ShopHouse Southeast Asian Kitchen location in 2012.
"While our primary focus is building the Chipotle brand in the U.S., we're making small investments now in what we believe will become potential growth opportunities in the future," Ells told investors. "Chipotle's success has never really been about serving burritos and tacos.”
One potential setback for 2012 will be commodity costs, executives said.
"We're cautiously optimistic we'll see more reasonable prices in 2012 for avocados, dairy, and produce," Hartung said, noting that the company recently shifted its avocado purchases to Mexico and Chile from California.
Hartung warned investors that any price reductions in produce would likely be offset by higher costs for beef, chicken, rice, and beans.
"Beef costs will be especially challenging, due to protracted supply shortages despite recent reductions in grain prices," he said.
By Jan Fletcher
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