Chipotle shares skid on sales slowdown
SAN FRANCISCO (MarketWatch) --
Chipotle said late Thursday that sales hit a speed bump in May after growing customer visits to its more than 1,300 U.S. restaurants during the first four months of the year.
"We were humming along nicely in the first quarter. We were humming along nicely in April and then we saw a slowdown," Chief Financial Officer John Hartung said in a conference call. "It's not a significant slowdown, but it is a slowdown."
For the second quarter, Chipotle said comparable-store sales grew 8%, a rate last seen in 2010's second quarter. Sales at stores open more than one year have been growing at a rate of 10% or more since mid-2010.
Chipotle's stock has grown at a blistering pace, zooming to a record $442.40 this past April from $40 in November 2008. Until now, Chipotle had defied skeptics who said the burrito's chain' growth engine would slow, similar to what happened to
A slew of analysts Friday slashed their stock-price targets on Chipotle, indicating higher food costs and softer consumer spending will pinch margins over the next few quarters. Goldman Sachs removed Chipotle from its conviction-buy list, downgrading the stock to neutral and cutting its 12-month target price to $365 a share from $475.
Chipotle's growth is being pressured after being more resilient to past consumer-spending slowdowns. The Denver chain has opened 360 restaurants since 2010, expanding into more suburban markets across the U.S. as well as areas that have lower population densities than it had previously targeted for new openings.
Chipotle, which doesn't plan further menu-price rises this year, is growing concerned over the recent spike in corn-futures prices. The company said it expects to pay higher prices for beef, chicken and dairy products.