Chipotle Mexican Grill (CMG) Stock Crashes on Weak Revenue
Chipotle Mexican Grill (CMG) shares continued to plummet after the burrito restaurant chain reported second-quarter sales below Wall Street expectations late Thursday, prompting several downgrades on Friday.
Chipotle Mexican Grill took it on the chin Friday July 20th, 2012 when it opened for trading — the only thing unusual was investors’ reaction. The results weighed down other casual restaurant chains as well.
Approximately 9,423,500 shares changed hands on Chipotle stock, a 1,380.0 percent increase over its 65-day average volume — the shares fell $86.88 or 21.5 percent to $316.98 per share.
The company’s 8% rise in same-restaurant sales was the first single-digit gain in two years. Chipotle says the weak economy is hurting customer spending.
It’s outlook wasn’t bright either — it said food costs had moderated but was concerned the drought in the Midwest would increase costs in the second half of the year.
On Friday, Deutsche Bank downgraded Chipotle from buy to hold and Goldman Sachs downgraded the restaurant from buy to neutral. Jefferies Group reiterated its underperform rating.
Chipotle had been steadily climbing until it hit a high of $440.00 per share on April 18th, 2012.
The Chipotle results weighed down other casual restaurant chains as well.
Panera Bread (PNRA) shares fell 3.8% to $144.97 per share in reaction to the Chipotle news. The bakery and cafe operator will report earnings July 24th, 2012 after the market closes.
Shares of Buffalo Wild Wings (BWLD) declined 3.5% to $82.54 per share. The company also reports earnings July 24th, 2012.
Dunkin’ Donuts (DNKN) fell 4.18% to $33.21 per share. On Tuesday, JPMorgan Chase downgraded the doughnut and ice cream shop operator from overweight to a neutral rating with a $33.00 per share price target.
Texas Roadhouse (TXRH) fell 3.8% to $17.86 per share. It reports earnings July 30th, 2012.
Tags: Buffalo Wild Wings, BWLD, Chipotle Mexican Grill, CMG, Customer Spending, Deutsche Bank, DNKN, Downgraded, Drought, Dunkin Donuts, Food Costs, Goldman Sachs, Midwest, Panera Bread, PNRA, Restaurant Chains, Stock Crashes, Texas Roadhouse, TXRH, Underperform Rating, Weak Revenue