Following a rough year, shares of American casual dining chain Chipotle Mexican Grill Inc are inching a little higher gaining some losses from an earlier decline after a rough year.
Shares of the dining chain rose on an upbeat start of 2017 after the sales of the company improved significantly last November and December 2016 although there is still a decline in their fourth quarter same-store sales although the numbers have risen by 1.4% in November and 14.7% in December from October’s 20% decline in same-store sales. Overall fourth quarter same-store sales have risen by 4.8%.
Chipotle shares have dropped by 50% since October 2015 on the effects of the highly broadcasted e.coli outbreak and other issues faced by the company with their employee management and labor practices. The company also have lost cases regarding claims of employee maltreatment and accusations of salary-cheating.
Aside from issues with their employee management practices, Chipotle also faced claims of racial discrimination in their employees which resulted into 10,000 cases filed against the company.
On Tuesday, shares of the company have recovered from a recent drop during early trading on the company’s profit warning that did not meet most investor expectations where the company announced that their same-store sales might drop to 4.8% in this year’s last quarter going below what analysts have forecasted with a 3.8% decline in same-store sales.
The company also reported roughly an earnings per share of around 50 to 58 cents missing largely out of the 96 cents earnings per share set by analysts missing almost 40% of the forecasted EPS while forecasted revenue range from around $1.04 billion to Wall Street’s $1.05 billion.
Meanwhile, Chipotle has taken steps to improve their reputation last year including giving out free drinks to student customers giving out millions of free meals and sending out advertisements regarding food safety following the E.coli issue back in 2015.
Chipotle shares have dropped by 20% over the past year and 44% over the past two years. This year, the company’s shares have received an upgrade from other analysts to a buy rating.
Chipotle’s management is also set to be changed this year with for more board members. This has led to a renewed confidence on the company’s shares which is set to rise up later in the quarter.
Although shares of the burrito chain were mostly trading in a straight line this Tuesday, CMG stocks have risen by 4.70% year-to-date compared to last year’s same period shares performance.