Chipotle Mexican Grill Inc., long a stock market darling, lost nearly a quarter of its market value in morning trading after failing to meet sales expectations for its second quarter.
For most other restaurant companies, watching revenue spike 21% to $690.9 million would call for champagne. But analysts had expected the burrito chain’s sales to clear $700 million when they were announced after the market closed Thursday.
Chipotle, consistently one of the industry’s top-performing stocks having surged nearly 60% in 2011, plunged as much as 24% to $307.27 a share Friday. The nosedive was the steepest ever for the Denver company, which went public in 2006 and has since been at the forefront of the rapid growth of the fast-casual dining sector.
Same store sales for Chipotle restaurants open more than a year went up 8%; analysts had expected more than 10%.
Menu prices have been rising at the chain – a trend that analysts said could continue if commodity inflation keeps up. Consumer spending hasn’t rebounded as much as executives would like. The cost of chicken, beef and rice kept growing.