Wall Street hasn’t been swayed from its cautious stance on Chipotle as the fast-food chain pushes forward with a range of efforts to pull out of a sales rut following a damaging food safety scare last year.
The company’s latest quarterly report showed a continued decline in sales for the once high-performing purveyor of burritos. Chipotle recently started selling chorizo at restaurants nationwide and is moving ahead with new dessert items, along with improving its digital ordering service.
Analysts aren’t impressed by the moves and have doubts about the company’s expectations for a same-store sales boost next year. Wedbush analyst Nick Setyan said the latest report offers little evidence to support a sales recovery next year and said a sales recovery in 2018 is a best-case scenario. “Given the most recent sales disclosures, we do not have visibility into the trajectory at which sales may recover absent significant promotional activity,” Setyan said. Stifel analyst Paul Westra said the company’s list of efforts effectively ends its 20-year run of “no-new-news-required” to boost sales.