Chipotle Net, Comps Rise

For the fourth quarter ended Dec. 31, the company's net profit rose to $4.3 million, 16 cents per share on a diluted basis, from $3.7 million in the like quarter a year before, with revenues climbing 36% to $173.3 million.

For the year, net income totaled $37.7 million, which included a one-time tax benefit of $20.3 million from tax net operating losses. That compared to $6.1 million in 2004. The 2005 income worked out to $1.43 per share, or 66 cents excluding the one-time benefit. Revenues increased 33.3% to $627.7 million and comparable restaurant sales increased 10.2%, the eighth consecutive year of double-digit comparable sales increases.

Fast-growing Chipotle opened 28 company-owned restaurants during the fourth quarter, including 26 restaurants in existing markets and two in new markets. The chain opened 80 company-owned restaurants in 2005, representing a 20% increase from the end of 2004.

Jack Hartung, the company's chief financial and development officer, called 2005 "a successful year for Chipotle by virtually any measure." He noted that new restaurants opened at increasingly higher volumes than they have in the past.

For the remainder of 2006, "We'll look to maintain our momentum with existing restaurants and continue to pursue great restaurant locations in both new and existing markets," Hartung said. Specifically, the company expects to open 80 to 90 new restaurants in 2006, with the majority of them coming in the last half of the year.

As the company continues to expand, however, Chipotle execs expect that maintaining the high comparable sales comparisons will become more difficult. It noted that although comparable restaurant sales momentum from the fourth quarter of 2005 continued into early 2006, that resulted in part from favorable weather in many markets, a comparison against soft comparable sales in early 2005. Comp sales also benefited from increased brand awareness generated by IPO-related publicity.

Management now expects full-year 2006 comparable restaurant sales to increase in the mid- to high-single digits, with higher comparable sales coming early in 2006 and declining throughout the year as sequential comparisons become more difficult.