Chipotle December Sales Collapse; Reports Receipt Of FDA Subpoena, New Stock Buyback
And the hits just keep on coming. In a double-whammy for investors hoping to catch Chipotle's falling-knife, the mexican fast-food restaurant reports a 30% collapse in same-store-sales for December and receiving a grand jury subpoena with regard the California Norovirus event. The stock crashed 10% on the news. However, the stock's initial collapse has been rescued as CMG reports a boost to its buyback program... seriously!
From CMG's statement:
December 2015 Sales Trend Detail
In a report on Form 8-K filed on December 4, we noted that comparable restaurant sales were trending at -16% at the onset of the month. Following the isolated norovirus incident during the week of December 7 in a Chipotle restaurant in Brighton, Massachusetts, which garnered national media attention, comparable restaurant sales decreased to average -34%, and then recovered to -31%. The week of December 21, 2015, the U. S. Centers for Disease Control and Prevention (CDC) announced that new illnesses related to the E. coli incident associated with Chipotle restaurants in October and November 2015 had slowed substantially, but also that it is investigating five new cases that were reported in November 2015 of the same strain of E. coli O26 but with a different DNA fingerprint. Following this announcement and related national media attention, our comparable restaurant sales trended down to -37%. For the full month of December, comparable restaurant sales were -30%. Future sales trends may be significantly influenced by further developments.
Receipt of Grand Jury Subpoena
In December 2015, Chipotle was served with a Federal Grand Jury Subpoena from the U.S. District Court for the Central District of California in connection with an official criminal investigation being conducted by the U.S. Attorney's Office for the Central District of California, in conjunction with the U.S. Food and Drug Administration's Office of Criminal Investigations. The subpoena requires us to produce a broad range of documents related to a Chipotle restaurant in Simi Valley, California, that experienced an isolated norovirus incident during August 2015. We intend to fully cooperate in the investigation.
It is not possible at this time to determine whether we will incur, or to reasonably estimate the amount of, any fines, penalties or further liabilities in connection with the investigation pursuant to which the subpoena was issued.
The stock crashed...
But the stock is being rescued:
This report is also filed to announce that our Board of Directors has authorized repurchases of Chipotle common stock with a total aggregate purchase price of $300 million, exclusive of commissions.
These authorized repurchases are in addition to $300 million in repurchase authorizations announced on December 4, 2015, of which $116 million remained available as of December 31, 2015.
During the fourth quarter 2015, we repurchased approximately 609 thousand shares of stock at an average price of $556 per share. During the month of December, we repurchased approximately 401 thousand shares of stock at an average price of $527 per share. The Board's authorization of the repurchase program may be modified, suspended or discontinued at any time.
So they are facing a huge loss on recently purcahsed buyback shares... but Buybacks are the solution to all problems it would appear...
How long will that bounce last?
(2 votes)
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I have no doubts Chipotle's problems with E.Coli, Salmonella and Novovirus are caused by their service employees. Ever seen some of the tattooed and pierced flotsam employed there?
Here in the USA, we have many people who are no different from iliterate Central American or Chinese peasants in their outlook and habits, but we don't dare treat them as such.
So corporate Chipotle, who focuses on their stock price, hires these people, and without thinking, expects them to have a clue abot personal hygiene and sanitation.
The chili pickers shit in the fields .... their kids, too .... the food handlers and cooks .... need basic hygiene training .... the Rev. Jesse Jackson spits phlegm in white people's soup .... dead pigs, chickens and ducks in Chinese rivers .... even Denmark isn't clean anymore .... with all the Mulims shitting everywhere .... Happy New Year .... but, the same people who bitch about Chipotles .... think nothing of taking a load of HIV/Hepatitis infected cum .... up their ass .... and into their blood stream ?
Wow...sounds like it is going to be a good year for some anger management classes... or did you not get any last night?
Are you angry .... because I discovered the missing link .... to the gay/bisexual connection .... to AIDS propagation .... the PC media and the trillion dollar "health" industry couldn't or wouldn't connect the spots .... and no, I didn't get laid last night .... thanks for asking .... LOL ?
Although this site complains about the Government - I've got to sat that Americans are becoming a bunch of paranoid people. Americans have become what the late comedian George Carlin used to say ... PUSSIFIED.
I go to Chipotle all the time. The food is great. There is no problem. It's fresh and the quality is excellent.
Please take a careful look at what Chipotle said. ONE STORE in the Simi Valley had problems. One store .. and because of this the company is facing a Federal Grand Jury Subpoena? Get a friggin' life ... America. In the old days it was NOT UNCOMMON for specific restaurants to have food problems. That is why the State of California has regulations about cleanliness and food storage. This is only a problem at the local level. It's not more than that.
The paranoia in America is absolutely unbelievable. We are becoming the Nation Of Cry Babies.
Islamic terror .... and they want to disarm .... all law abiding Americans ?
Well this crybaby bought Chipotle at a sizzling price of $722 a share... guess I should have left the burrito chain alone...
maybe the key to a successful fast food outing is lots of hot sauce. the chili can sanitize the food.
How long will the bounce back last...until Chippuke runs out of money... management knows how much is left...time to get that "golden parachute" out for a quick review...
I've never been to a Chipotles .... however, I have enjoyed canned, smoked chipotle peppers .... for over 20 years .... I will definitely go to the first Chipotles I see .... and I encourage all their customers to support them .... a good chipotle chili pepper .... is a terrible thing to waste !
Is Chipotle a Victim of Corporate Sabotage?
"After observing recent events involving Chipotle and e.coli, here's my analysis of the situation: Chipotle's e.coli outbreaks are not random chance. They are the result of the biotech industry unleashing bioterrorism attacks against the only fast food company that has publicly denounced GMOs."
It it too much to ask.....? No chicken shit in the burrito please.
50,000 new HIV infections every year .... stop taking it up the ass .... will ya ?
"50,000 new HIV infections every year .... stop taking it up the ass .... will ya ?"
OK.
But, I absolutely REFUSE to stop using intravenous drugs. A person has to draw the line somewhere you know!
I love these 30s - 2m charts that ZH is so fond of... It adds to the dramatic effect.
It is absolutely retarded for Chipotle management to waste share holder money on buy backs at these prices. Maybe at P/E of 12 or something, but 30? If I were a share holder (I'm not), that would cause me to sell right there. Ridiculous.