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Shares of Chipotle (CMG - Free Report) gained more than 1.5% in morning trading Monday after Bloomberg reported that the fast-casual Mexican chain recently raised prices in about 440 of its restaurants.
Citing Chipotle spokesman Chris Arnold, Bloomberg said the increase, which affects about 20% of the company’s total stores, raised prices by an average of about 5% on April 11. There are apparently no plans to raise prices at the rest of Chipotle’s locations.
“The increase is our first in about three years, and was implemented to help offset labor and food inflation,” Arnold told Bloomberg.
Given this timeframe, the price increase is Chipotle’s first since the advent of its food safety scandal in 2015. After several outbreaks of foodborne illnesses throughout the country, Chipotle was sent reeling as customers fled to competitors. Shares of CMG fell more than 40% in 2015.
It’s taken quite some time for Chipotle to recover from the food safety scandal, but the stock has been on a bit of run so far this year. Heading into today, shares of CMG were up about 23% year-to-date.
Chipotle will report its first-quarter earnings next Tuesday. Our current Zacks Consensus Estimates call for earnings of $1.30 per share and revenue of $1.05 billion. These figures would represent growth of 248% and 26%, respectively, but it’s important to note that year-over-year comparisons will be favorable because Chipotle was still in the midst of its scandal last year.
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Chipotle (CMG) Stock Gains on Price Increases
Shares of Chipotle (CMG - Free Report) gained more than 1.5% in morning trading Monday after Bloomberg reported that the fast-casual Mexican chain recently raised prices in about 440 of its restaurants.
Citing Chipotle spokesman Chris Arnold, Bloomberg said the increase, which affects about 20% of the company’s total stores, raised prices by an average of about 5% on April 11. There are apparently no plans to raise prices at the rest of Chipotle’s locations.
“The increase is our first in about three years, and was implemented to help offset labor and food inflation,” Arnold told Bloomberg.
Given this timeframe, the price increase is Chipotle’s first since the advent of its food safety scandal in 2015. After several outbreaks of foodborne illnesses throughout the country, Chipotle was sent reeling as customers fled to competitors. Shares of CMG fell more than 40% in 2015.
It’s taken quite some time for Chipotle to recover from the food safety scandal, but the stock has been on a bit of run so far this year. Heading into today, shares of CMG were up about 23% year-to-date.
Chipotle will report its first-quarter earnings next Tuesday. Our current Zacks Consensus Estimates call for earnings of $1.30 per share and revenue of $1.05 billion. These figures would represent growth of 248% and 26%, respectively, but it’s important to note that year-over-year comparisons will be favorable because Chipotle was still in the midst of its scandal last year.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>