Meat+Poultry - March 2018 - 10

BUSINESS NOTES

CHIPOTLE KEEPS WORKING
TO RESTORE GROWTH
Executives of Chipotle Mexican Grill
Inc. expect fewer transactions at
the burrito chain through July. This
news sent shares of the Denver-based
company on the New York Stock
Exchange plummeting by as much as
11 percent from the previous day's
close of $304.33, following the earnings
release on Feb. 6. Weak traffic in the
latest quarter showed "there is still
work to be done to restore strong
growth and consumer trust," said M.
Steven Ells, chairman and CEO.
Net income in the year ended Dec.
31, 2017, was $176,253,000, equal to
$6.19 per share on the common stock,
up sharply from $22,938,000, or $.078,
in the prior year. Revenue totaled
$4,476,412,000, up 15 percent from
$3,904,384,000.
In the fourth quarter, the company
earned $43,793,000, or $1.56 per share,
an increase over $15,975,000, or $0.55,
on revenue of $1,110,100,000, up 7
percent from $1,034,560,000.
Comparable restaurant sales
increased 6.4 percent for the year
and 0.9 percent for the quarter. The
increases were driven by higher menu
prices, which were partially offset by a
decrease in transactions.
"The past couple of years have
presented a set of challenges, but I

MEAT+ POULTRY | 03.18 | www.meatpoultry.com

pre-food safety crisis levels.
For 2018, management expects
comparable restaurant sales in the low
single digits and plans to open 130 to
150 new restaurants, a decline from
the projected 195 to 210 new openings
in 2017.

BEYOND MEAT TO EXPAND
R&D CENTER
Beyond Meat announced plans to
expand the company's research and
development space with a 26,000-sq.-ft.
addition to the company's headquarters
in El Segundo, California.
Beyond Meat's "Manhattan Beach
Project" will house more than 100
employees, including scientists,
engineers, food technologists, chefs and
researchers. It will include a gourmet
kitchen and a formal sensory lab for
consumer tasting and product testing of
its plant-based protein products.
 "The expansion of the Manhattan
Beach Project here in Los Angeles
reflects our belief that building meat
from plants is an opportunity of global
importance, one that is deserving of
investment levels consistent with what
you'd find in alternative energy or
health sciences, sectors with which we
certainly share common goals," Ethan
Brown, CEO and founder of Beyond
Meats, said. "We are seeing a record
number of consumers expressing
interest in a broader set of protein
choices; to these consumers, it is
our brand promise to enable them
to eat what they love, from burgers
to sausage, while feeling great about
related health and environmental
implications. The new center is
designed to help us fulfill that promise
to the best of our abilities."
Beyond Meat is the maker of the
Beyond Burger, which the company
claims looks, cooks and tastes like
traditional ground beef but is made
from plants. Beyond Burgers are
available in the meat case at more than
5,000 grocery stores and sold at more
than 5,000 restaurants nationwide.

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10

know that the changes we have made
are the right ones to help us move
toward achieving our full potential,"
Ells said during a Feb. 6 earnings call.
"We will continue to focus on our
long-term success, and we'll continue
to fight to preserve things that make
Chipotle special."
Ells, who founded Chipotle Mexican
Grill in 1993, stepped down from his
role as CEO in early March and became
executive chairman after his successor,
Brian Niccol, took over. Niccol was the
CEO of the Taco Bell division at Yum!
Brands.
"We firmly believe that a new CEO
with a passion for driving excellence
across every aspect of our business
will be another important step in our
growth, and I'm optimistic as we look
forward to the next 25 years," Ells said. 
The company continues to struggle
to recover from a foodborne illness
outbreak in 2015 that included 55 cases
of E. coli O26 across 11 states followed
by a norovirus outbreak at a Bostonbased restaurant that reportedly
sickened 80 individuals.
Chipotle's turnaround efforts
have been met with tepid response.
Introductions of chorizo and queso,
operational improvements and a
new loyalty program, among other
initiatives, have not been enough to
restore customer traffic at the chain to
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