Burrito chain Chipotle's sales rise for first time in five quarters
(Reuters) - Chipotle Mexican Grill Inc's (CMG.N: Quote) sales rose for the first time in five quarters as the burrito chain's efforts to bring back diners after a series of food safety lapses start to pay off.
The company said sales at established restaurants jumped 26 percent in January, putting it on track for its first quarterly increase in six quarters.
Chipotle's sales slumped in November 2015 when the chain was linked to a multi-state E. coli outbreak. A month later, at least 80 Boston College students were sickened by norovirus traced to a Chipotle restaurant.
Since then, the company has given away free and discounted food and spent heavily on advertising and promotions in a bid to bring back diners. It also abandoned its dual CEO structure and named Steve Ells the sole chief executive.
Ells said on Thursday Chipotle attracted millions of new or lapsed customers in the second half of 2016. "We are also working aggressively to continue to attract and convert more new and lapsed customers," Ells said on a post-earnings call.
Chipotle's shares fell in extended trading after the company reported a 76.5 percent drop in fourth-quarter profit, but pared most of their losses after Ells' comments.
Profit slumped to $15.98 million, hurt by higher costs and a spike in prices of avocados, the main ingredient in guacamole.
Revenue rose 3.7 percent to $1.03 billion, largely in line with the average analyst estimate, according to Thomson Reuters I/B/E/S.
Sales at restaurants open for at least 13 months fell 4.8 percent in the quarter, in line with the average estimate, according to research firm Consensus Metrix.
(Reporting by Abhijith Ganapavaram in Bengaluru; Editing by Shounak Dasgupta and Savio D'Souza)
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