Recovery efforts continue for Chipotle Mexican Grill Inc., but it was more bad news from the company this week when it reported its first-ever loss for the quarter ended March 31, 2016.
Net loss for the first quarter of 2016 was $26.4 million, or 88 cents per diluted share, compared to net income of $122.6 million, or $3.88 per diluted share, in the first quarter of 2015.
Revenue for the quarter was $834.5 million, down 23.4% from the first quarter of 2015, driven by a 29.7% decrease in comparable restaurant sales that was partially offset by sales from new restaurant openings.
Comparable restaurant sales declined 29.7% primarily as a result of a decrease in the number of transactions in company restaurants and, to a lesser extent, by a decline in the average check, including an impact from sales promotions.
“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 rebuilding 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,” said Steve Ells, founder, chairman and co-chief executive officer of Chipotle.
The company opened 58 new restaurants during the quarter, bringing the total restaurant count to 2,066.
Restaurant-level operating margin was 6.8% in the quarter, a decrease from 27.5% in the first quarter of 2015. The decrease was primarily driven by unfavorable sales leverage and, to a lesser extent, by higher-than-usual marketing and promotional costs as well as food testing and waste costs.
“Our restaurants and leadership teams have worked hard to overcome the challenges of the first quarter. 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,” said Monty Moran, co-CEO.
Chipotle said it expects to open 220-235 more new restaurants during 2016.