Chipotle Mexican Grill, Inc. CMG 0.25% opened Tuesday’s session down more than 7.5 percent following yet another disappointing quarterly report.
Disappointment Continues
A number of food safety issues plagued the company throughout late 2015 and early 2016, including multiple outbreaks of E. coli.
Chipotle lost a large portion of its customer base during that period, while sales and share prices plummeted as well. For most of the year, the company has been focused on efforts to win back its lost business. So far, it has been an uphill battle.
Q3 sales fell 21.9 percent, missing consensus expectations of an 18.9 percent decline. EPS of $0.56 also fell well short of consensus predictions of $1.59.
Commentary
The Street’s Brian Sozzi tweeted that Chipotle management said they are nervous about forward guidance on this morning’s earnings call.
Bloomberg’s Shelly Banjo also noted that management is disappointed with the company’s sales recovery so far.
Founder Steve Ells is among those dissatisfied.
“We are not offering the necessary guest experience,” he admitted.
Banjo pointed out some troubling statistics for Chipotle and its investors. In the first half of 2016, 78 percent of Chipotle’s least-frequent customers abandoned the restaurant.
Ironically, Banjo pointed out that Chipotle management said lines at Chipotle restaurants have returned, but this time, it’s because throughput is down. Chipotle investors were hoping those lines were an indication of increasing demand.
Nations Restaurant News editor Jonathan Maze tweeted…
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!
