Chipotle vows to bounce back after profits crash by £360m

Chipotle employee prepares food in Manhattan on September 11, 2015 in New York. Chipotle's 1,850 restaurants spent September 9, 2015 in a cram effort to hire 4,000 new workers to staff a rapid expansion, as it adds 200 more outlets this year. Built on a pitch of fresh, organic and locally sourced ingredients for its burrito wraps and tacos, the thriving US chain is making clear it is not ready to ease up on expansion plans.  AFP PHOTO/KENA BETANCUR        (Photo credit should read KENA BETANCUR/AFP/Getty Images)

Chipotle Mexican Grill has vowed to “return to its roots” this year as it seeks to bounce back from a 13% slide in full-year revenues.

Revenues fell to $3.9 billion (£3.1 billion) last year, as comparable restaurant sales decreased 20%, while net income crashed from $476m to $23m (£380m to £18m).

The company opened 240 new restaurants in 2016, net of three relocations and closures.

Steve Ells, founder, chairman and CEO of Chipotle, declared: “We are energised and focused to achieve our goals in 2017, and to return to a path of long-term value creation for our shareholders. Returning to our roots of what originally made Chipotle great has helped refocus all of our strategies toward the guest experience.”

Ells said the firm had a three-point plan for enhancing its financial performance.

“In the upcoming year we intend to continue to simplify and improve our restaurant operations, utilise creative marketing to rebuild our brand, and further the roll-out of our digital sales efforts. All three of these strategic initiatives are centred on improving the guest experience and restoring customer affinity for the Chipotle brand, and we are confident in our teams’ abilities as we start this New Year.”

Despite the decrease in annual sales, the fourth quarter brought a 4% rise in sales to $1 billion (£797m) due to the opening of 72 new restaurants, taking total store count to 2,250. However, comparable restaurant sales fell 5% while quarterly net income dropped from $68m (£54m) to $16m (£13m) on the same basis.

For 2017, management is targeting comparable restaurant sales increases in the high-single digits and expects to open between 195 and 210 new restaurants.

The company recently bolstered its UK and European operations by bringing former Costa boss Jim Slater on board as its regional managing director.

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