Chipotle Mexican Grill continues to get bad news, this time for its stock prices falling after its Q4 2016 earnings were announced, but the company showed a happy face regardless.
Markets Insider reported that as of Friday morning, the restaurant’s stock was down 1.91% at $415.23 a share after fourth quarter earnings were announced, noting revenue was down overall at $1.03bn (from expected $1.04bn) and for same-store sales by 4.8%.
This continues a string of bad news for the chain, which was first hit by an E. Coli outbreak in 2015, followed by efforts to get customers back, which failed. The company then became embroiled in a federal ruling saying that its social media policy violated the National Labor Relations Act.
Though the chain has made attempts to steady the ship, including expanding to Europe and addressing food safety issues head-on, it hit another pothole when last month the restaurant group was sued for unauthorized use of images over ten years of marketing.
Still, the latest news was met with guarded optimism by the fast casual chain and by investors. The Markets Insider story noted that analysts from RB Capital Markets believed that, even with the short-term lowered earnings, there is still potential for growth through operations improvements, digital ordering and new marketing.
“We are energized and focused to achieve our goals in 2017, and to return to a path of long-term value creation for our shareholders,” said Steve Ells, founder, chairman and chief marketing officer of Chipotle in a release on the company website.
“Returning to our roots of what originally made Chipotle great has helped refocus all of our strategies toward the guest experience. In the upcoming year we intend to continue to simplify and improve our restaurant operations, utilize creative marketing to rebuild our brand, and further the roll-out of our digital sales efforts. All three of these strategic initiatives are centered on improving the guest experience and restoring customer affinity for the Chipotle brand, and we are confident in our teams’ abilities as we start this new year.”
The release also stated that management is targeting these points in 2017:
- Comparable restaurant sales increases in the high single digits
- 195-210 new restaurant openings
- An estimated effective full year tax rate to be between 39.0% and 39.5%, which will be impacted by volatility due to a recently issued accounting standard that changes how we account for taxes associated with stock-based compensation awards.