Chipotle plans to open 200 stores in 2021, CEO says, as digital sales spike

Chipotle is forging forward with plans to open tons of of recent eating places this yr, bucking the constraints and challenges which have led to numerous closures in the business throughout the coronavirus pandemic.

Brian Niccol, the chief govt of the fast-casual chain, reiterated these plans in a post-market look on CNBC on Tuesday. The plans coincide with the corporate’s rising dependence on digital orders.

“We plan on opening 200 and hopefully more than 200 restaurants in 2021, which would be, you know, a real exciting thing for us to return back to 200-plus openings,” he instructed “Mad Money” host Jim Cramer in an interview.

The feedback got here after Chipotle posted outcomes from the fourth quarter after the shut. The deliberate retailer openings would convey Chipotle’s retailer depend to practically 2,000 areas and would mark the primary time since 2016 that the corporate added greater than 200 stores in a single yr.

Chipotle added not less than 130 new stores to its roster yearly over the past 5 years, together with 161 final yr.

“We just did a real coast-to-coast hiring push where we’re looking for 15,000 new employees,” mentioned Niccol, referring to a plan introduced in January. The firm presently has a head depend of 83,000, in accordance to FactSet.

Chipotle’s progress story is an outlier from the state of the restaurant business nationwide as diners and restaurateurs wrestle to draw prospects due to coronavirus restrictions and social distancing practices. More than 110,000 eateries have shut down both completely or for the foreseeable future, in accordance to the National Restaurant Association.

With indoor eating and capability limits remaining in place in eating places throughout the nation, Chipotle has turned to different technique of serving prospects. Online orders had been a key a part of Chipotle’s potential to develop same-store sales by 5% in the fourth quarter, when it met Wall Street expectations on the income line.

Chipotle recorded $1.61 billion of income in the three-month quarter that ended Dec. 31, although its earnings per share of $3.48 fell 25 cents wanting analyst estimates. The firm grew income by greater than 11.6% in the quarter.

Chipotle posted full-year income of $6 billion, up 7% from 2019. Online sales spiked 174% and made up 46% of the corporate’s enterprise.

Delivery made up about half of Chipotle’s digital orders in the fourth quarter.

“One of the things we said to ourselves in 2020 was we wanted to make sure that we pivoted to the digital channel,” Niccol mentioned. “I think we’ve done a nice job of capturing that delivery business.”

Shares of Chipotle climbed practically 1% to $1,523.05 in Tuesday’s session, although the inventory was down greater than 3% in after-hours buying and selling.

After Chipotle inventory grew greater than 65% in 2020, it has elevated practically double digits for the reason that begin of 2021.

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