chicagotribune.com – Avocado prices shot up. Hurricanes forced restaurants to close. The bill for a hacker attack came in.
Those were reasons Chipotle Mexican Grill cited to explain its huge profit shortfall in the third quarter — just a few of the troubles on a long list. The burrito chain was also hit with a norovirus outbreak in Virginia and a public-relations nightmare when customers complained about rodents falling from a ceiling at a restaurant in Texas.
In short, it was a three-month stretch in which seemingly everything that could go wrong did. Executives made the case that the quarter of unfortunate events was an aberration, nothing indicative of foundational disarray. But investors who’ve been watching Chipotle work on its rocky comeback from the depths of the E. coli disaster in 2015 were skeptical: Shares of the restaurant chain experienced their worst intraday plunge in five years.
“There is a sense that Chipotle’s rebirth is running out of steam,” Neil Saunders, managing director of GlobalData Retail, said in a note. “A number of factors have conspired in making this a somber quarter for the company.”
Profit amounted to 69 cents a share, 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 Denver-based company has been reeling since a wide-ranging food-safety crisis sickened hundreds, crushing its sales, profit and stock price. The chain had started to recover in the past year, but then the norovirus incident in Virginia — along with a video of the 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 said 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 teams are ready.”
I was such a huge Chipotle backer….but I really really need them to get their shit together man.