Chipotle Mexican Grill Promises to Maintain Steady Menu PricesPosted: February 12, 2010
“For the year, revenue increased 14% to $1.518 billion, with comparable restaurant sales up 2.2%. Our restaurant level operating margins for the year were just about 25%, up 340 basis points from the previous year, the highest we have experienced as a company. Net income for 2009 increased 62% to $126.8 million, leading to diluted earnings per share of $3.95, an increase of 67% over 2008.”
This performance occurred even as CMG held menu prices constant in 2009. The restaurant spin-off from McDonald’s (MCD) believes it has pricing power but still plans to maintain steady prices in the coming year:
“It’s now been over a year since we took any price increase in any market, and in some markets its approaching two years. And though we believe we have pricing power relative to our competitors, with the current chain food inflation outlook, we don’t have any current plans to increase prices.
Now of course our stance may change depending on food inflation or to fund future food of integrity investments. But based on our current industry leading margins and the uncertainty with the economy and consumer confidence, we’re in a good position to be patient about menu prices.”
This is great news for folks who enjoy CMG’s Mexican food. Investors were treated to a brief dip in the stock price before it rapidly recovered to make fresh 52-week highs. CMG is already up 19% year-to-date.