Chipotle raises target for North American restaurant locations to 7,000
Chipotle Mexican Grill is looking to ramp up expansion as it raises its long-term restaurant potential by a considerable number.
The Mexican quick-serve chain, which owns and operates all its restaurants, raised its long-term forecast for the number of restaurants it can operate in North America to 7,000 locations, up from its prior goal of 6,000. Chipotle, which announced the news in its earnings release, said it was “raising the target based on the success of small-town locations that are delivering unit economics at or better than traditional Chipotle locations.”
For 2022, Chipotle expects to open 235 to 250 restaurants, assuming that permitting and construction delays related to the pandemic don’t worsen. The company opened 215 restaurants in 2021, bringing its total to 2,966 at year-end. Of the new restaurants the company opened last year, 81% included a Chipotlane (drive-thru lanes dedicated to picking up digital orders).
By 2023, Chipotle expects that it can accelerate its pace of new units to a range of 8% to 10% a year.
“Given the healthy and improving cash on cash returns, we are building a real estate pipeline that will allow us to accelerate unit growth to be in the range of 8% to 10% per year, with greater than 80% of new restaurants having a Chipotlane,” the company stated.
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Chipotle’s net income totaled $133.48 million, or $4.69 per share, in the quarter ended Dec. 31, down from $190.96 million, or $6.69 per share, in the year-ago period. Costs increased for beef, avocados and freight during the quarter. Excluding legal expenses, closure costs and other items, earnings per share came in at $5.58 per share, topping analysts expectations for $5.25 per share
Revenue rose 22% to $1.96 billion, in line with expectations. Same-store sales increased 15.2%. Digital sales edged up 3.8%, accounting for 41.6% of total sales.
“2021 was an outstanding year for Chipotle, highlighting the strength and resiliency of our brand. Together, we accomplished many incredible things as our passionate employees remained dedicated to delivering excellent guest experiences, aligned with our purpose and values," said Brian Niccol, chairman and CEO. "Moving forward, we believe expanding access and convenience through our digital ecosystem, accelerating unit growth, and continuing to develop and support our restaurant employees, will put us in a much stronger competitive position."
As of December 31, 2021, Chipotle has $1.4 billion in cash, investments and restricted cash, and no debt. It also had access to a $500 million untapped credit facility.
Chipotle had more 2,950 restaurants as of December 31, 2021, in the United States, Canada, the United Kingdom, France and Germany.