Chipotle surges as CEO Brian Niccol's turnaround strategy pays off
Chipotle Mexican Grill shares surged more than 13 percent in early trading on Thursday as higher menu prices and CEO Brian Niccol’s digital-first turnaround strategy fueled the chain to a massive earnings beat.
The company topped Wall Street’s expectations across the board, with a same-store sales increase of more than 6 percent, driven in part by higher menu prices, and $1.23 billion in fourth-quarter revenue. Digital sales increased by more than 65 percent in the quarter and accounted for 12.9 percent of the chain’s total revenue.
"The growth acceleration this quarter gives us confidence that our strategy is working,” Niccol said in a statement. “When we connect with guests through great operations, relevant marketing focused on Chipotle's great taste and real ingredients, and provide more convenient access, they respond enthusiastically."
A former Taco Bell executive, Niccol took over as Chipotle’s CEO last March as the company reeled from a series of food-safety incidents that drove its stock lower and hurt store traffic. Niccol has emphasized digital customer outreach, fresh marketing campaigns and an overhauled menu to change the company’s fortunes.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CMG | CHIPOTLE MEXICAN GRILL INC. | 58.75 | -0.09 | -0.15% |
In Thursday trading, Chipotle is on pace for its largest single-day percentage increase since April 26, 2018, when shares rose 24 percent. The company’s stock is up more than 30 percent so far this year.
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Niccol said the company plans to add dozens of new drive-thru “Chipotlanes” for customers who placed orders through mobile apps, noting that the pick-up windows have helped to drive sales. Chipotle has also focused on speeding up the ordering process to boost store traffic.