By Uday Sampath Kumar and Hilary Russ
(Reuters) – Chipotle Mexican Grill Inc <CMG.N> on Tuesday reported that soaring digital and delivery sales driven by the coronavirus crisis helped offset the impact of shuttered dining rooms, and the fast-casual chain said it had enough cash and liquidity to get through the next year, sending its shares up more than 5%.
Overall, same-store sales fell 16% in March as locations were forced to shut dining rooms. While in-store ordering was 75% lower at the start of April, delivery orders rose 150% and mobile pickup orders were 120% higher.
For the first quarter, digital sales rose nearly 81% to $371.8 million and accounted for 26.3% of total sales, compared to 19.6% of sales in the fourth quarter.
The company is looking to reopen its dining rooms in some areas in coming weeks but expects employees to still wear masks and gloves, offer hand sanitizer and likely have a worker just tasked with sanitizing tables and high-traffic areas, executives said on a call to discuss the quarterly results.
“I’m very excited about the opportunity to get our dining rooms reopened,” said Chief Executive Brian Niccol. “I think we’re going to hang on to a lot of our gains, digitally.”
He said the company could reopen stores “restaurant by restaurant” as more states start to lift restrictions on business operations enacted to help slow the spread of the virus.
The burrito chain partnered with Uber Eats <UBER.N> in March to increase the number of regions where it can offer deliveries and is adding more drive-thru lanes at restaurants so customers can pick-up online orders without leaving their cars.
Separately, the U.S. Department of Justice said on Tuesday Chipotle would pay $25 million to resolve criminal charges related to the company’s involvement in food borne illness outbreaks that sickened hundreds of people between 2015 and 2018.
“These payments will unfortunately hurt our liquidity a bit, but we’re ready to put this old matter behind us,” Chief Financial Officer John Hartung said during the call.
The company withdrew its forecast of delivering mid-single digit percentage growth in comparable restaurant sales this year.
Chipotle is securing access to a $500 million line of credit, had $909 million in cash and short-term investments, and no debt as of March 31.
First-quarter same-store sales rose 3.3%, helped by strong demand and higher menu prices in the early part of the year.
Excluding one-time items, Chipotle earned $3.08 per share, topping analysts’ average estimates by 18 cents, according to IBES data from Refinitiv.
(Reporting by Uday Sampath in Bengaluru and Hilary Russ in New York; Editing by Bernard Orr and Bill Berkrot)