Chipotle says comparable sales grew 14.7 percent in December, and shares rose nearly 5 percent, as the fast casual burrito leader continues to recover from the food safety issues that have plagued the chain for much of the past two years.
The company reported that sales fell 4.8 percent during the fourth quarter overall, the fifth straight quarterly decline, and a number that would have been much higher if not for improved metrics in November and December. In October alone, sales dropped 20 percent. The following month, the decline was just 1.4 percent heading into December’s positive gain.
Chipotle’s stock has fallen nearly 50 percent since an October 2015 E.coli outbreak reached national conscious.
The chain credited increased spending on promotions and advertising, as well as rising food prices due to a hike in avocado costs—a key in its popular guacamole—for its lower-than-expected performance in the fourth quarter. Chipotle originally told investors comparable sales would fall in the low single digits. Wall Street estimates also predicated Chipotle would hit $1.05 billion in sales during the three-month period—a result that is likely to come in at $1.04 billion.
The 14.7 December increase is compared to a 30 percent decline a year earlier. Chipotle also announced on Tuesday a plan to buy back shares worth $100 million, and estimated a profit of 50 to 58 cents per share for the fourth quarter, which misses the estimated 96 cents, according to Thomson Reuters.
