Chipotle quarterly restaurant sales down more than expected
By Lisa Baertlein
(Reuters) - Chipotle Mexican Grill Inc (CMG.N: Quote) on Tuesday reported a bigger-than-expected drop in quarterly sales at established restaurants as it fights to recover from a string of food safety lapses late last year.
Shares in Chipotle fell 2.2 percent to $396.84 after the Denver-based burrito seller posted a 21.9 percent drop in third-quarter sales at restaurants open at least 13 months. That was steeper than the 18.7 percent decline expected by analysts polled by tracking firm Consensus Metrix.
While the company said it expects same-restaurant sales to fall again in the fourth quarter, it does expect them to grow in the "high single digit" percentages for all of 2017.
Executives, who have depended on free and discounted food to lure back diners, laid out plans to rebuild sales and profits by improving service, debuting new technology and introducing new menu items.
Analysts, who noted that sales declines are easing, took a wait-and-see stance on that news.
"There are still a lot of questions in the air," Stephens Inc analyst Will Slabaugh told Reuters.
Chipotle's projects include a new ordering app, in-restaurant tablets, online ordering and payment for catering, and faster food preparation lines. Executives hope such efforts will deliver swifter, more accurate service without increasing labor costs.
Chipotle added spicy chorizo sausage to U.S. menus this month, and executives said the chain's new offerings may include dessert. Continued...