Chipotle Mexican Grill Q4 revenue $1.4 billion
Topics: CHIPOTLE MEXICAN GRILL
Revenue for the quarter was $1.4 billion, an increase of 17.6% from the fourth quarter of 2018.
The increase in revenue was driven by a 13.4% increase in comparable restaurant sales and new restaurant openings.
Comparable restaurant sales included no net impact from Chipotle Mexican Grill rewards program as deferred revenue was essentially offset by redemptions and a refined breakage rate assumption for chips and guacamole.
Comparable restaurant sales improved primarily as a result of an 8.0% transaction growth, as well as a 5.4% increase in the average check.
We opened a record 80 new restaurants including one relocation during the quarter and closed three.
This included 46 Chipotlanes resulting in a total of 66 Chipotlanes at year end.
For 2020, we anticipate opening 150 to 165 new restaurants with more than half including a Chipotlane.
Food, beverage and packaging costs were 33.1% of revenue, a decrease of 10 bps compared to the fourth quarter of 2018.
The decrease was primarily due to the benefit of menu price increases and to a lesser extent favorable avocado pricing, partially offset by increased costs of several other ingredients, including carne asada and expenses related to loyalty.
Restaurant level operating margin was 19.2% in the quarter, an improvement from 17.0% in the fourth quarter of 2018.
The improvement was driven primarily by leverage from the comparable restaurant sales increase, partially offset by wage inflation at the crew level and increased delivery expense.
General and administrative expenses were $112.4 million on a GAAP basis, or $106.4 million on a non-GAAP basis, excluding $3.6 million net related to several legal matters and $2.3 million related to transformation expenses.
Included in the legal matters this quarter was a $10 million reserve related to the US Attorney's investigation that began in January 2016.
This brings the total reserve to $25 million.
We believe this amount is a reasonable estimate of what we may be expected to pay to settle this matter.
While there can be no assurance that a settlement will be reached, we have been cooperating with the investigation and are in discussions to resolve this matter.
GAAP and non-GAAP general and administrative expenses for the fourth quarter of 2019 also included underlying general and administrative expenses totaling $74.9 million, $25.4 million related to non-cash stock compensation, $4.5 million related to higher bonus accruals from our strong operating performance and payroll taxes, and $1.6 million related to our upcoming All Manager Conference.
The GAAP effective tax rate was 28.3% in the fourth quarter of 2019, compared to 26.3% in the fourth quarter of 2018.
The increase was primarily due to current year increases in non-deductible executive compensation.
On a non-GAAP basis, the 2019 fourth quarter effective tax rate was 27.0%.
Net income for the fourth quarter of 2019 was $72.4 million, or $2.55 per diluted share, compared to net income of $32.0 million, or $1.15 per diluted share, in the fourth quarter of 2018.
Excluding the impact of legal expenses, corporate restructuring, and certain other costs, adjusted net income was $81.0 million and adjusted diluted earnings per share was $2.86.
During the quarter, our Board of Directors approved the investment of up to an additional $100 million, exclusive of commissions, to repurchase shares of our common stock, subject to market conditions.
This repurchase authorization, in addition to approximately $69.4 million available as of December 31, 2019, for repurchases under a previously announced repurchase authorization, may be modified, suspended, or discontinued at any time. ■