Chipotle the Denver based burrito chain declared its quarterly results. The company has declared excellent results and has shown an increase of 25 percent on its top line amid new restaurants and increase in prices of the food. The company also saw a sharp increase in its costs as key raw materials rose sharply. The company expects the trend to continue over the next two quarters and expects the business to grow in single digits over the next twelve months.
In the October-November quarter, Chipotle’s revenue also grew 24 percent, to $596.7 million from $482.5 million. The company got a boost from higher prices, which went into effect this spring and summer, and more customers buying its Mexican-inspired food. It opened 67 new stores during the quarter, bolstering growth, and revenue from stores open at least a year rose 11.1 percent. That’s a key revenue measure that excludes stores newly opened or closed.
The company has been able to significantly increase it client base as customers have been visiting the chain more than before. Founder and co-CEO Steve Ells commented on this saying. “Customers aren’t quite sure how the system works or what to order and sometimes have an issue with flavor combinations or the level of spice, but they like it and they’re coming back,” he said.
The company’s net income dropped considerably over the year. It earned $214.9 million, or $6.76 per share, versus $179 million, or $5.64 per share, in 2010. The company also a expansion plan in place and hopes to add 150 new stores in the coming year. We maintain a buy on the stock due to strong fundamentals.