Chipotle Mexican Grill Inc. reported that net income rose 19.6% for in its third quarter, but the profit still missed Wall Street's expectations, sending the burrito chain's stock tumbling as much as 14% after hours.
The financial results, released after the market closed, continue a string of bad news that has some investors wondering whether the longtime stock market darling is starting to go sour.
The Denver company's quarterly profit was $72.3 million, or $2.27 a share, compared with earnings of $60.4 million, or $1.90 a share, for last year's third quarter. Revenue rose 18.4% to $700.5 million.
But analysts had expected Chipotle to earn $2.29 a share on revenue of nearly $704 million.
Shares fell $4.07, or 1.4%, to close at $285.93 in regular trading and, after results were released, lost more than $40 in after-hours trading.
The chain said it already is suffering the effects of inflation related to severe heat this summer, which executives said have resulted in higher prices for corn, dairy, meat and other products.
"We don't have any specific plans to increase menu prices next year, but with inflationary expectations related to the summer drought looming … we remain open to the possibility of a price increase next year," said Montgomery F. Moran, Chipotle's co-chief executive.