Chipotle shares struggle as customers stay away from restaurant chain

Traffic has remained down this year amid recovery bid, but prices lead to sales bump

CHICAGO— Chipotle Mexican Grill Inc. plunged the most in more than three months on Wednesday after its most recent earnings report showed it’s still struggling to get customers in the door.

The Mexican-inspired chain said on Tuesday that customer traffic was negative in the fourth quarter and has remained down this year. The results suggest that the Denverbased company’s turnaround is slow going, even with a modest sales increase thanks to higher prices.

The stock fell as much as 11 per cent to $271.11(U.S.), wiping out Chipotle’s gains so far this year. The intraday decline was the worst since Oct. 25.

On the bright side, the closely watched benchmark of comparable sales exceeded the projection from Consensus Metrix. Profit also narrowly beat Wall Street estimates.

“While there is still work to be done, we are starting to see some

Chipotle’s shares have been rocked by setbacks ranging from a food-safety crisis to a data breach to hurricane damage

success,” chief executive officer Steve Ells said in a statement on Tuesday.

Chipotle’s shares have been rocked by a series of wide-ranging setbacks, everything from a food-safety crisis to a data breach to hurricane damage — and even a viral video of mice at one of its restaurants. An attempt to add dessert to its menu stumbled, and the chain still hasn’t shown it can entice customers with new items.

Fourth-quarter profit was $1.55 a share when including a 21-cent tax benefit. Excluding that item, earnings came in at $1.34 — only slightly higher than the $1.33 predicted by analysts. The 0.9-per-cent advance in comparable sales was higher than the 0.7-per-cent estimate.

“These are not like knock-your-socks-off-type numbers, but it is somewhat more stable than it was,” said BTIG LLC analyst Peter Saleh.

Chipotle said it expects a samestore sales gain in the “low-single digits” this year. The chain said it will boost capital expenditures this year and give employees bonuses after the U.S. tax overhaul. Hourly workers can earn $250, while restaurant managers may take home $1,000. It’s also expanding certain benefits, including paid parental leave.

In November, Ells agreed to step down as CEO when a new leader is found.

“We are making good progress on our search for a new CEO who can improve execution, drive sales and enable Chipotle to realize our enormous potential,” Ells said Tuesday.