UPDATE 1-Chipotle 4th quarter profit up, despite higher food costs

Tue Feb 5, 2013 4:48pm EST

By Lisa Baertlein

Feb 5 (Reuters) - Chipotle Mexican Grill Inc reported higher quarterly profit on Tuesday, despite higher costs for beef and other ingredients that took a bite out of margins.

The results from the popular burrito chain come as U.S. restaurant companies virtually across the board are bracing for higher food prices due to last summer's historic U.S. drought.

The shares of Chipotle, long an investor darling due to its fast growth, rose 2.6 percent to $312.88 in after-hours trading.

In October, influential hedge fund manager David Einhorn called the chain's stock an attractive "short," saying Chipotle will face significant competition and additional costs.

The Denver-based chain, which in the autumn warned investors its restaurant sales could slow in 2013, is ramping up advertising and rolling out catering to bolster sales.

Its fourth-quarter net income rose to $61.4 million, or $1.95 per share, from $57.5 million, or $1.81 cents per share, a year earlier.

Food costs were 33.5 percent of revenue, an increase of 130 basis points, primarily driven by higher costs for beef products, including steak and barbacoa.

Revenue increased 17.2 percent to $699.2 million. Sales at restaurants open at least 13 months were up 3.8 percent on increased traffic, as expected.

For 2013, Chipotle forecast flat to low single-digit percentage sales growth at established restaurants, excluding any menu price increases.

Analysts polled by Consensus Metrix expect 2013 same-restaurant sales to be up 3.8 percent for the full year.

The company expects to open 165 to 180 new units in 2013. It added 183 new Chipotle restaurants last year, bringing its total to 1,410.

Chipotle's board also approved up to an additional $100 million for share buybacks.

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