Chipotle Mexican Grill stock sank a day after the burrito chain reported disappointing results. Roselle Chen reports.
Chipotle's stock plunging one day after the company delivered disappointing results. Chipotle has been struggling to recover from a bruising string of food safety lapses since 2015. It's churned up food safety training for its employees. And it's been looking for new ways to boost sales. It's added new items to its menu, such as spicy cheese Queso dip, frozen margaritas and desserts. But it also just announced a five percent price hike. Analysts say that hike could hit traffic to its restaurants. Technomic's Dave Henkes. (SOUNDBITE) DAVID HENKES, SENIOR PRINCIPAL, TECHNOMIC (ENGLISH) SAYING: "Upscale fast food is a segment that's growing. But, listen, it's maturing, And Chipotle is the largest players facing some headwinds in a you know a category that's maturing with a lot more competition. And, so, you know, they can certainly right the ship and have some success, but it's going to be harder than it was three or four years ago. And, so, you know, they need to be much more proactive with new product development. They need to be much more, have a lot more discipline around the food safety. And, listen, they developed a lot of initiatives and, you know, different things to help address that that, you know, managers aren't taking into account at the at the at the local level." Chipotle's stock has more than halved since touching a record high in August 2015. At least nine brokerages, including Credit Suisse, cut their price targets on Wednesday.