Chipotle Plummets After Storms, Hacker Attack Ravage Profit – Bloomberg
Chipotle Mexican Grill Inc. fell as much as 8.6 percent in late trading after recent hurricanes and a hacker attack hammered earnings last quarter, adding obstacles to the burrito chain’s elusive comeback.
Profit amounted to 69 cents a share last quarter, net of expenses tied to the data-security breach earlier this year and hurricanes Harvey and Irma. Analysts had estimated about $1.63 a share, according to data compiled by Bloomberg.
The results suggest that Chipotle’s turnaround effort remains slow going. The Denver-based company has been reeling since an E. coli outbreak struck in 2015, crushing its sales, profit and stock price. The chain had started to recover in the past year, but then a norovirus incident in Virginia — along with a video of mice at a Dallas location — sparked a fresh round of negative headlines.
Chief Executive Officer Steve Ells acknowledged that the latest results weren’t what he hoped for, but he believes the company’s revival is still on course.
“We’re embracing the things we need to reach our full potential,” Ells said in an interview. “From a structure standpoint — and a feeling internally — the team’s are ready.”
Investors may still need more convincing. Chipotle shares fell as low as $296.25 in extended trading. The stock had slipped 14 percent to $324.30 this year through Tuesday’s close.
“There were a lot of unusual items in the quarter,” Chief Financial Officer Jack Hartung said. In addition to the breach and the storms, higher avocado prices hurt results. These aren’t recurring costs, he said.
But even when ignoring Chipotle’s one-time setbacks, its numbers were a bit worse than analysts had projected. Same-store sales grew 1 percent, missing the 1.2 percent estimate. Total revenue came in at $1.13 billion, short of the $1.14 billion projection.
The company expects same-store sales to gain 6.5 percent this year. That’s below the 7.2 percent estimate compiled by Consensus Metrix.
— With assistance by Brandon Kochkodin