Hillary Clinton’s surprise visit to an Ohio Chipotle earlier this month came too late to save the food chain from a disappointing first quarter of sales.
Shares in Chipotle Mexican Grill fell 5% in after-hours trading on an announcement by the company that it had missed its sales projections for the first quarter of 2015.
The first quarter concluded at the end of March, however, a full two weeks before an incognito visit by the presidential hopeful to a Chipotle. Not that even Clinton’s entourage is likely to move the needle for a company that had $3.2bn in revenues last year.
Same-store sales at Chipotle rose 10.4% for the first quarter, missing projected 11.8% growth, according to figures released on Tuesday. The company hit its revenue target for the quarter at $1.09bn, and came in high on earnings per share at $3.88, besting expectations of $3.65.
The stock slide was deep, but it did not match, for example, the 10% drop in Clinton’s favorability rating over the course of 2013. Clinton, who announced earlier this month that she is running for president, currently registers a 48-47 favorability rating, according to polling averages.
In a conference call with reporters and investors, Chipotle CEO Steve Ells said the company had opened 49 new restaurants in the first quarter of the year and expected to chalk up a strong second quarter. Spokesman Mark Alexee announced plans for a revamped website. Chief creative and development officer Mark Crumpacker said a dedicated sales app was in the works for use on Apple Watches.
“I’m pleased with our performance for the first quarter,” Ells said. “And we’re off to a strong start in 2015.”
The restaurant will need to serve more than just presidential candidates to nail its second-quarter earnings projections, but it cannot hurt that Chipotle seems to be a popular dining destination with the entire 2016 field.
Florida senator Marco Rubio was caught on camera in a Washington Chipotle last month, and later cracked that the $2.5bn the Clinton campaign could spend in the 2016 election was “a lot of Chipotle, my friends”. Former Florida governor Jeb Bush said earlier this month that he, too, enjoyed the occasional Chipotle. Bush took care, however, to note that he did not commute to Chipotle in a chauffeured luxury van, as Clinton did. “Drive my own car,” Bush said. “Park my own car. Get out of my own car.”
Chipotle, which opened in Denver in 1993 and currently operates 1,831 restaurants, is growing tremendously. Last October it announced a 19.8% increase in sales and planned to open 190-205 new locations in 2015.
The chain specializes in Mexican food, including burritos, burrito bowls, tacos and quesadillas.
A major challenge in the first quarter, companies executives said, was a shortage of pork-rich carnitas menu offerings owing to the suspension of a hog supplier that had violated the company’s progressive animal husbandry guidelines.
Ells said one-third of all Chipotle restaurants had been affected by the pork shortage, and that the company was “looking hard to find more pork that meets our protocols”.
Note: this article has been corrected. An earlier version misidentified the Chipotle executive who announced the Apple Watch app.
