- From 155 to 165 new restaurant openings
- Second ShopHouse Southeast Asian Kitchen to open
- Two more restaurants in London and the first one in Paris already under construction
After the company opened 150 stores in 2011, it will keep its solid pace with a 13% increase in 2012 on top of 1230 currently operating locations.
Investors who have been wondering about the future of Chipotle's ShopHouse Southeast Asian Kitchen finally got an answer. Founder and co-CEO Steve Ells announced that his company would be opening a second location in the second half of the year in the Washington, DC market, where its first opened last September. On Wednesday's conference call, Ells remarked that the experience of the first ShopHouse reminded him a lot of opening the first Chipotle. "Customers aren't quite sure how the system works or what to order and sometimes have an issue with flavor combinations or the level of spice, but they like it and they're coming back," he said. Ells added that he was pleased with the results from ShopHouse, and that his team is still working to perfect the concept.
Last year also marked the opening of Chipotle's first locations in Europe, with two in London. Ells sounded very pleased with the stores' performance, saying the food quality there is as good as at Chipotle's best restaurants in the US.
Shares were down slightly in after-hours trading Wednesday because of a slight earnings miss and a pre-report surge, but investors should be reacting positively to the news. The only negatives in the 2012 outlook were a lower same-store sales growth at just mid-single digits, after a year where comps surged at 11.2%, and slightly higher food costs.
Food with integrity
While Chipotle has been one of the hottest stocks in the market since the financial crash, critics insist that its shares are overpriced and its business model lacks a competitive advantage. But Ells reminded listeners why investors and customers alike will pay up for quality. As of the end of the fourth quarter, all the meat served in Chipotle's restaurant was naturally raised, and the company is now the only national restaurant chain to serve all naturally raised meat. Ells reiterated the company's commitment to strengthening its food culture by finding the best ingredients from the most sustainable sources and using classic cooking techniques, a strategy he sees as much a formula for success for ShopHouse as it's been for Chipotle.
Though investors may like to see faster growth from a stock with such a high multiple, Chipotle has plenty of room to run at just over 1,200 restaurants. There are over 30,000 locations of both McDonald's
And the company has already proven itself against potential rivals. Chipotle's strong performance has kept up in spite of competitors like Jack in the Box's
With its plans for international expansion, Chipotle has a chance to be the next in a long line of American brands to charm consumers across the world. In fact, our experts at the Fool have a few others ready to make a killing, and they have just come out with a special free report called "3 American Companies Set to Dominate the World." Read all about them by clicking right here.