Feisty restaurant chain Chipotle Mexican Grill Friday bucked the tide of lethargic holiday sales, helped by a widely-seen video that mocked factory farming to highlight its emphasis on healthy ingredients.
Chipotle, which describes its mission as "changing the way people think about and eat fast food", notched a 9.3 percent increase in comparable sales for the fourth quarter.
Those higher sales, which contrasted with flat or declining results at other restaurant chains, helped counteract the rising costs of avocados, a key ingredient on its menus, and some other supplies, leading to higher profits and a higher forecast for 2014 sales.
Net income was $79.6 million, up nearly 30 percent from a year ago, on a 20 percent rise in revenues to $844.1 million. Earnings bested analyst expectations for profits of $78.7 million.
Full year earnings were $327.4 million on revenues of $3.2 billion, up $278 million on revenues of $2.7 billion.
The results sent Chipotle shares soaring 11.7 percent to $551.96 in Friday, making it one of the best performers in the S&P 500.
Factors behind the better results included rising sales in the company's fast-growing catering segment and the successful rollout of nearly 200 new restaurants in 2013, taking the total to nearly 1,600.
Chipotle officials also attributed its gains to the meteoric success of "Scarecrow", a three-minute animated film that depicts industrial farming as a dark world where chickens are plumped with chemicals before being conveyed through largely depopulated factories and dumped in crates labelled "all-natural."
The video was viewed nearly 12 million times online and a companion video game was downloaded nearly 600,000 times, company officials said.
Chipotle touts its use of humanely-raised, antibiotic-free chicken, pork and other meats.
"By using satire and doing so in an entertaining way, we hope to make people more curious about their food and how it is produced," said co-chief executive Steve Ells.
The chain's emphasis on letting customers pick salsas and other ingredients for burritos has pressured McDonald's and other fast-food rivals to employ more customization.
Chipotle next will launch "Farmed and Dangerous," a four-part comedy series that chronicles scandal when video surfaces from an industrial farm of a petroleum-injected cow exploding.
The videos aim to showcase the benefits of the Chipotle "Food with integrity" menu. Chipotle has also stopped using genetically modified cooking oils and plans to remove all ingredients based on genetically modified organisms from its restaurants by the end of 2014.
"I wouldn't point to non-GMO as a single thing that is going to drive sales, but something that is going to strengthen our bond with customers," Ells said.
"And I think when you combine a mission like that with food that's absolutely delicious, that people crave, and that they want to eat often, then I think you have a winning formula."
Other new ventures include Chipotle's roll-out of its ShopHouse chain of Southeast Asian restaurants and an equity investment in Pizzeria Locale, a new pizza chain. The company has also added an all-vegan menu line called Sofritas.
Feisty restaurant chain Chipotle Mexican Grill Friday bucked the tide of lethargic holiday sales, helped by a widely-seen video that mocked factory farming to highlight its emphasis on healthy ingredients.
Chipotle, which describes its mission as “changing the way people think about and eat fast food”, notched a 9.3 percent increase in comparable sales for the fourth quarter.
Those higher sales, which contrasted with flat or declining results at other restaurant chains, helped counteract the rising costs of avocados, a key ingredient on its menus, and some other supplies, leading to higher profits and a higher forecast for 2014 sales.
Net income was $79.6 million, up nearly 30 percent from a year ago, on a 20 percent rise in revenues to $844.1 million. Earnings bested analyst expectations for profits of $78.7 million.
Full year earnings were $327.4 million on revenues of $3.2 billion, up $278 million on revenues of $2.7 billion.
The results sent Chipotle shares soaring 11.7 percent to $551.96 in Friday, making it one of the best performers in the S&P 500.
Factors behind the better results included rising sales in the company’s fast-growing catering segment and the successful rollout of nearly 200 new restaurants in 2013, taking the total to nearly 1,600.
Chipotle officials also attributed its gains to the meteoric success of “Scarecrow”, a three-minute animated film that depicts industrial farming as a dark world where chickens are plumped with chemicals before being conveyed through largely depopulated factories and dumped in crates labelled “all-natural.”
The video was viewed nearly 12 million times online and a companion video game was downloaded nearly 600,000 times, company officials said.
Chipotle touts its use of humanely-raised, antibiotic-free chicken, pork and other meats.
“By using satire and doing so in an entertaining way, we hope to make people more curious about their food and how it is produced,” said co-chief executive Steve Ells.
The chain’s emphasis on letting customers pick salsas and other ingredients for burritos has pressured McDonald’s and other fast-food rivals to employ more customization.
Chipotle next will launch “Farmed and Dangerous,” a four-part comedy series that chronicles scandal when video surfaces from an industrial farm of a petroleum-injected cow exploding.
The videos aim to showcase the benefits of the Chipotle “Food with integrity” menu. Chipotle has also stopped using genetically modified cooking oils and plans to remove all ingredients based on genetically modified organisms from its restaurants by the end of 2014.
“I wouldn’t point to non-GMO as a single thing that is going to drive sales, but something that is going to strengthen our bond with customers,” Ells said.
“And I think when you combine a mission like that with food that’s absolutely delicious, that people crave, and that they want to eat often, then I think you have a winning formula.”
Other new ventures include Chipotle’s roll-out of its ShopHouse chain of Southeast Asian restaurants and an equity investment in Pizzeria Locale, a new pizza chain. The company has also added an all-vegan menu line called Sofritas.
