Chipotle Stock Drops On Quarterly Report
Shares of Chipotle Mexican Grill (NYSE:CMG) took a dive on Friday after the company's reported sales growth was mild at best in the second quarter of 2012, a factor that could spell trouble for the restaurant industry as a whole.
According to Reuters, Chipotle has long held the title of one of the most promising contenders in the restaurant business, using antibiotic-free meats and organic produce. The company's fast growth, efficiency and popularity with more affluent fast-fooders has made it strong since 2006, and its sales slump is seen as a troublesome indicator of potentially worse things to come.
"Our hypothesis going into quarterly results had been that Chipotle would be one of few companies to buck a broader restaurant slowdown this quarter," William Blair & Co. analyst Sharon Zackfia said.
On Friday, the company's stock fell nearly 23 percent to $312.26 - the largest loss on the New York Stock Exchange. This came shortly after the stock hit a record high of $442 in April.
According to Bloomberg, the company's lower sales report was in line with a broader trend of lower consumer spending last quarter.
In addition to a company's quarterly reports, insider trading activity can also influence investing money.
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