Investors got excited after Chipotle Mexican Grill announced solid Q4/12 earnings. Revenue for the quarter was $699.2 million, up 17.2% from the prior year period. The growth in revenue was the result of new restaurants not in the comparable base and a 3.8% increase in comparable restaurant sales.
Comparable restaurant sales growth was primarily driven by the impact of increased traffic. During the quarter Chipotle opened 60 new restaurants, bringing the total restaurant count to 1,410. Food costs were 33.5% of revenue, an increase of 130 basis points driven by higher commodity costs. Higher commodity costs were primarily driven by increases in beef costs including steak and barbacoa, and to a lesser extent by increases in the cost of salsa ingredients and dairy.
Restaurant level operating margin was 24.6% in the quarter, a decrease of 150 basis points from the prior year period. The decrease was primarily driven by higher food costs. Net income for the fourth quarter of 2012 was $61.4 million, or $1.95 per diluted share, compared to $57.5 million, or $1.81 per diluted share, in the fourth quarter of 2011.
The strong earnings were no doubt driven by Morning Coffee staffers, who have been enjoying the new Chipotle location in downtown Vancouver on a daily basis.
Chipotle Mexican Grill (CMG : NYSE : US$322.46), Net Change: 17.45, % Change: 5.72%, Volume: 1,934,883