Chipotle Mexican Grill, Inc. (NYSE:CMG) has once more had a tough go of it on the stock market, falling short of expectations and sending share prices tumbling. Chipotle losses have already harmed how many new jobs the company will add this year.
The company posted an earnings per share of $1.33 against the anticipated $1.63, according to Thomson Reuters Corp. Revenue also missed the mark, coming in at $1.13 billion, against a projection of $1.14 billion. Same-store sales only grew by one percent, falling short of the estimated 1.2%, according to StreetAccount.
The Mexican-style restaurant chain has been ailing ever since outbreaks of foodborne illnesses first struck in 2015. The most recent one was the discovery of norovirus at its Sterling, Virginia, restaurant in July 2017. Naturally, a restaurant business that cannot seem to absolutely guarantee the safety of its food is going to get dinged.
Chipotle opened 38 restaurants and closed three in the recent quarter, which is far worse than the same quarter last year, when it opened 55 restaurants and only had a single closure. In 2017, the company trimmed its plans for new restaurant openings down to the low end of its predicted range of 195 to 210. That paring back of its expansion plans will, of course, reduce Chipotle’s job creation figures.
The company has been attempting to draw in more customers with newer menu offerings, like queso, which it launched in September. That cheesy sauce garnered only mixed support from customers, however. “Chipotle is a company that historically hasn’t added a lot to the menu,” said Mark Crumpacker, the chief marketing officer, in a call with investors. “When we do, we get a lot of attention for it, and there’s a lot of potential for us to reignite interest in particularly with lapsed customers by making relatively small changes to our menu. It’s really untapped potential for us.”
The company’s failure to implement its widespread rehabilitation plan since the illness scares has contributed to the Chipotle losses. In a press release, however, Steve Ells, founder, chair, and CEO wrote, “Despite several unusual impacts during the quarter, including the impact of hurricanes, we maintained our focus and saw some encouraging signs.”
Chipotle employs about 60,000 workers, with most of those within the United States.
“Chipotle shares tank after big earnings miss,” CNBC, October 24, 2017.