On Tuesday, Chipotle, the restaurant chain, posted its fourth earnings after an E.Coli outbreak. The company said that its quarterly net income plunged 44%, marking it the worst period after the outbreak of an E.Coli and other health issues that drove clients away.
The Denver-based firm reported fourth quarter net income of $67.9 million, down from $121.2 million in the previous year period. On a per share basis, earnings dropped 43.5% to $2.17 from $3.87 in the comparable period last year. Chipotle noted that earnings per share was higher than the previous estimate of $1.70 to $1.90 per share.
Quarterly comprehensive income declined to $64.6 million from $120.22 million in the prior year period. Income from operations amounted to $103.6 million for the three-month period ended December 31, 2015, down from $187.87 million in the previous year quarter. Quarterly revenue dropped 6.8% to $997.5 million from $1.17 billion in the year ago period. Same-store sales fell 14.6% during the reporting period.
Operating margin at restaurant level decreased 700 basis points and was at 19.6% during the fourth quarter. The company also said that it opened 79 fresh restaurants in the fourth quarter, bringing the net count to 2,010.
The company earned a net income of $475.6 million for the year 2015, up from $445.4 million in the previous year. Earnings per share increased to $15.10 from $14.13 last year. Comprehensive income totalled $467.76 million, compared to $443.32 million in the full year 2014. Annual income from operations increased to $763.6 million from $710.8 million previous year.
Revenue for the year 2015 amounted to $4.5 billion, an increase of 9.6% from $4.1 billion in 2014. The growth in revenue was due to the sales from new restaurants. Comparable restaurant revenue grew 0.2% in the year 2015. The company said that it opened 229 fresh restaurants during the period. Chipotle said that it expects to open 220 -235 new restaurants in the year 2016. The company also anticipates tax rate of about 39.0% for 2016.
USA TODAY said that the company has been put under investigation following an outbreak of E.Coli that nauseated over 50 people in nearly 11 states in October. A second epidemic in December impacted 5 people in 3 states and the health officials linked Chipotle's Boston restaurant to a norovirus epidemic that nauseated over 130 college students.
The epidemics led Chipotle to temporarily shut down various locations and to implement fresh safety measures in food-handling process. However, the Centers for Disease Control and Prevention concluded the investigation at Chipotle, stating that the epidemics seem to be over.
Chipotle will begin inviting customers to restaurants in February through direct mail and increased marketing, CNBC said quoting the company's executives. The company said that it has made vast changes in food safety.
According to the company, the fourth quarter was the most puzzling period in its history due to the outbreaks of E.Coli, which impacted Chipotle's earning results. The company is working hard to fix the problem in the future.
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