The stock of Chipotle Mexican Grill (CMG) is down 8% after the restaurant chain reported mixed financial results that underwhelmed analysts and investors.
The company that specializes in Mexican cuisine posted earnings per share (EPS) of $0.27 U.S., which topped consensus forecasts that called for earnings of $0.25 U.S.
However, revenue of $2.79 billion U.S. missed expectations for sales of $2.82 billion U.S. in the quarter. Sales were up 13% from a year earlier.
Same-store sales of 6% fell short of the 6.3% expected on Wall Street. Foot traffic in Chipotle’s restaurants increased by 3.3%.
Online sales accounted for 34% of the company’s food and beverage sales in Q3. Chipotle opened 86 new restaurants during the period.
Management blamed the mixed results largely on higher costs for the company’s food and beverages.
Costs rose during the quarter as the company increased its portion sizes following a social media backlash over the amount of food it gives to customers.
In terms of guidance, Chipotle reiterated its outlook that calls for same-store sales to grow by a mid- to high-single-digit percentage in the current fourth quarter of the year.
The company also forecast that it will open between 285 and 315 new restaurants in 2024 and 315 to 345 new locations in 2025.
This was the first quarterly results from Chipotle Mexican Grill since chief executive officer (CEO) Brian Niccol left the company to lead coffee chain Starbucks (SBUX).
Chipotle’s chief operating officer (COO) Scott Boatwright is the acting CEO while the board of directors’ searches for a permanent replacement for Niccol.
Before today (Oct. 30), Chipotle’s stock had gained 32% this year and was trading at $60.49 U.S. per share. The stock underwent a 50-for-1 split at the end of June.
