Shares of Chipotle (CMG - Free Report) gained more than 4.9% on Tuesday after the burrito chain announced a smaller decline in comparable store sales during the fourth quarter, including a major recovery in December.
Chipotle said that same-store sales fell 4.8% in Q4. Comps were down 20& in October but fell just 1.4% in November and gained an impressive 14.7% in December. It’s important to note, however, that Chipotle’s food safety scandal began in October 2015, and the company faced easier comparisons in these later months.
Since the onset of Chipotle’s E.coli outbreak, the stock has dropped nearly 50%. Also, management previously guided for Q4 comparable store sales declines in the low single digits, which means today’s figures are not that surprising.
Chipotle also reported quarterly sales of $1.04 billion. This came in below the current Zacks Consensus Estimate of $1.05 billion.
The fast-casual Mexican chain also said that it was hampered by higher-than-expected costs thanks to an uptick in spending and advertising, as well as a global increase in avocado prices.
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