After reporting yet another disappointing quarter in October, Chipotle Mexican Grill, Inc.(NYSE: CMG) announced on Wednesday that founder Steve Ells is stepping down from the CEO position and the company has begun the search for his replacement.
Investors are hoping a leadership change is just what the battered restaurant needs. Chipotle stock rose by more than 5 percent following the announcement.
Ells founded the company in 1993 and was named co-CEO in 2009. He became sole CEO in December 2016. Ells will now be assuming the role of executive chairman.
Ells says Chipotle is focused on a number of strategies aimed at speeding up its recovery from food safety problems dating back to 2015.
“As we work hard to restore our brand, I believe we can capitalize on opportunities, including in areas such as the digital experience, menu innovation, delivery, catering, and domestic and international expansion, to deliver significant growth,” Ells says in a statement.
Chipotle is now two years removed from a string of E.coli outbreaks at several of its restarants, but the company has struggled to regain lost sales and restore its reputation. The stock is down another 20 percent in 2017 and recently dropped below $280 for the first time in nearly five years.
This year, Chipotle made a big bet that its new queso offering could boost earnings and margins heading into the end of the year. Unfortunately, the new queso was met with lukewarm customer reviews, and Chipotle’s same-store sales growth, earnings per share and revenue all missed consensus analyst estimates in the third quarter.
The company’s full-year guidance implies a 1 percent decline in same-store sales in the fourth quarter, and Bank of America analyst Gregory Francfort says consensus analyst earnings expectations for 2018 and 2019 are at least 10 percent too high.
“The company continues…
Click here to continue reading
Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common Sense. I don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and tradingcommonsense.com is always available on your local internet!
