Food Business News - February 10, 2015 - (Page 23)

serves International Food Products Chipotle on fire Fast-casual chain ends year with extraordinary growth Food Service Companies By providing the highest quality ingredients at competitive prices, we give our customers a clear advantage. DENVER - No pork? No problem for customers of Chipotle Mexican Grill, who appeared to approve of the fastcasual restaurant's recent decision to temporarily pull carnitas from the menu at about a third of its U.S. locations. The burrito chain made the move following a routine audit that revealed a supplier was not complying with the company's animal-welfare standards. "While we could have chosen to replace this supply of pork from conventionally raised pigs, we decided not to because most conventionally raised pigs are subjected to conditions that we find unacceptable," said Steve Ells, chairman and co-chief executive officer of Chipotle, during a Feb. 3 conference call with financial analysts. "Customers are applauding our commitment to our vision, thanking us for standing on principle, commending us for taking action against the inhumane treatment of animals, and congratulating us for standing by our business values." Then again, Chipotle customers didn't balk at menu price increases to offset higher food costs last year, either. More customers visited the chain in 2014, driving strong double-digit growth in revenue during the fourth quarter and fiscal year. For the year ended Dec. 31, 2014, Chipotle recorded net income of $445,374,000, equal to $14.35 per share on the common stock, marking a 36% increase over the prior year's income of $327,438,000, or $10.58 per share. Revenue for the year advanced 28% to $4,108,269,000, which compared with $3,214,591,000 for fiscal 2013. Net income for the fourth quarter soared to $121,234,000, equal to $3.91 per share, up 52% from $79,622,000, or $2.57 per share, for the comparable February 10, 2015 period. Fourth-quarter revenue totaled $1,069,811,000, an increase of 27% over $844,147,000 for the prior-year quarter. Comparable restaurant sales climbed 16% for the fourth quarter and 17% for the year, driven by higher traffic as well as the benefit of a nationwide price increase taken last summer. The chain expanded with 60 new restaurants for the quarter and 192 for the year for a total of 1,783 units. "While those results would be strong for a company of any size, I think they are particularly impressive considering how we now have nearly 1,800 restaurants averaging nearly $2.5 million each," Mr. Ells said. "Quite simply, I do not think that we would be able to deliver these results without such compelling and relevant vision. "We have made it our mission to change the way people think about and eat fast food, and we have created an extraordinary food and people culture." For the year ahead, Chipotle management expects to open 190 to 205 new restaurants and to achieve low- to midsingle digit comparable restaurant sales increases. The company also expects an estimated effective tax rate of 39%, excluding federal work opportunity and R.&D. credits, which have not been renewed for 2015. In January, Chipotle announced the decision to pull the pork product after an inspection of an undisclosed supplier exposed some inconsistencies in the chain's animal welfare protocol. Per Chipotle's standards, suppliers must raise pigs with access to the outdoors or in deeply bedded barns to improve their comfort. The standards also prohibit the use of antibiotics. While the action may bear a negative impact on sales in the short term, Chipotle Sugar Oils Starches Flour and More 800-227-8427 Trusted Ingredients. Trusted Advisors. FOODBUSINESS NEWS ® 23

Table of Contents for the Digital Edition of Food Business News - February 10, 2015

Food Business News - February 10, 2015
Hershey continues move into snack categories
Renewed school food fight looming on the horizon
Beverage Business News - Colorful ways to quench a thirst
Table of Contents
Web Contents
Editorial - Oil and currency moves should be seen as threats
McCormick eyes ambitious growth in year ahead
Dunkin’ to debut cold blended beverage platform
Campbell Soup in the midst of reorganizing
The future of shopper marketing
JBS USA plans expansion at Utah beef plant
Large MOM multiples
More tough times ahead for McDonald’s
Inside Wendy’s menu strategy
Chipotle on fire
Diamond acquires stake in potato chip maker
Market Insight - More cattle but beef prices still rising
Health and Wellness - On the cutting edge of digestive health
Ingredient Innovations - Backing up satiety benefits
Company Profile - Tyson Foods flying high
New Food Products
Ingredient Market Trends - Soybean oil market pulled lower, then higher
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - February 10, 2015