Chipotle Mexican Grill reported financial results for its first quarter ending March 31, including comparable restaurant sales that decreased 29.7 percent over the first quarter of 2015, according to a report in QSR magazine. The chain’s first-ever quarterly loss comes after the chain’s food crisis when norovirus and E. coli outbreaks hit several stores across the country and significantly affected customer traffic.
“As our sales are on a gradual path to recovery, we remain focused on our mission of changing the way people think about and eat fast food. The best approach to re-building our business is to proudly serve safe and delicious food in our high-quality restaurants every single day, which is exactly what we will continue to do,” says Steve Ells, founder, chairman, and co-CEO of Chipotle.
Revenue for the quarter was $834.5 million, down 23.4 percent from the first quarter of 2015. The decrease in revenue was driven by a 29.7 percent decrease in comparable restaurant sales, partially offset by sales from new restaurant openings. Comparable restaurant sales declined primarily as a result of a decrease in the number of transactions in restaurants, and, to a lesser extent, by a decline in average check, including an impact from sales promotions.
The company opened 58 new restaurants during the quarter, bringing the total restaurant count to 2,066.
Food costs were 35.3 percent of revenue, an increase of 140 basis points as compared to the first quarter of 2015. The increase was driven by food testing and waste costs, as well as increased costs for pre-cut produce items. Increases in food costs were partially offset by relief in beef prices. Net loss for the first quarter of 2016 was $26.4 million compared to net income of $122.6 million, in the first quarter of 2015.
“Our restaurants and leadership teams have worked hard to overcome the challenges of the first quarter,” says Monty Moran, co-CEO. “What is most important is that we continue to build teams of top performers in our restaurants, and among our field leadership, which will allow us to continue to improve on our already high standards and exceptional customer experience.”
For 2016, Chipotle management expects 220–235 new restaurant openings.
