Chipotle has just reported some terrible news: its profits are down 95%.
More detail from the Wall Street Journal article::
"...The burrito chain on Tuesday reported same-store sales fell a worse-than-expected 21.9% in the third quarter. Analysts were anticipating a drop of 18.7%. Profit fell 95% in the quarter. Still, the decline marks a recovery from prior months, including its steepest sales decline in January, when same-store sales fell 36.4%.
'While we’re on the road to recovery, we’re not satisfied,' Chipotle Co-Chief Executive Steve Ells told investors on Tuesday.
[...] Chipotle reported a profit of $7.8 million in the third quarter, or 27 cents a share, down sharply from a last year’s $144.9 million, or $4.59 a share. Analysts polled by Thomson Reuters were looking for per-share profit of $1.59. Revenue fell 15% to $1.04 billion, below expectations for $1.09 billion."
Remember that profits are dropping in the midst of Chipotle opening 168 new stores, so each restaurant is in fact making less than before, and many of its locations have likely become unprofitable.
Chipotle isn't going to recover anytime soon because it's really a culture problem -- a company culture problem, that is. Having counseled over two hundred businesses both big and small, which include dozens of restaurants, worked as a restaurant manager, and being certified as a ServSafe® Food Manager myself, I feel somewhat qualified to critique Chipotle. So, what are the indicators of what is really "wrong" with Chipotle?
More detail from the Wall Street Journal article::
"...The burrito chain on Tuesday reported same-store sales fell a worse-than-expected 21.9% in the third quarter. Analysts were anticipating a drop of 18.7%. Profit fell 95% in the quarter. Still, the decline marks a recovery from prior months, including its steepest sales decline in January, when same-store sales fell 36.4%.
'While we’re on the road to recovery, we’re not satisfied,' Chipotle Co-Chief Executive Steve Ells told investors on Tuesday.
[...] Chipotle reported a profit of $7.8 million in the third quarter, or 27 cents a share, down sharply from a last year’s $144.9 million, or $4.59 a share. Analysts polled by Thomson Reuters were looking for per-share profit of $1.59. Revenue fell 15% to $1.04 billion, below expectations for $1.09 billion."
Remember that profits are dropping in the midst of Chipotle opening 168 new stores, so each restaurant is in fact making less than before, and many of its locations have likely become unprofitable.
Chipotle isn't going to recover anytime soon because it's really a culture problem -- a company culture problem, that is. Having counseled over two hundred businesses both big and small, which include dozens of restaurants, worked as a restaurant manager, and being certified as a ServSafe® Food Manager myself, I feel somewhat qualified to critique Chipotle. So, what are the indicators of what is really "wrong" with Chipotle?
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