Chipotle Surges the Most Since 2007 After Investors Warm to New CEO

It’s a new day for Chipotle Mexican Grill Inc., and ideas that the company previously spurned — such as drive-thrus and new menu items — are now on the table.


Brian Niccol

Photographer: Robin Marchant/Getty Images North America

Shareholders are energized by these new potential ingredients in the burrito chain’s business mix, sending the stock up as much as 25 percent on Thursday after first-quarter results topped analysts’ projections. Investors are buying into the optimism of Chief Executive Officer Brian Niccol, who arrived in March from Taco Bell.

“I’m focused on finding some wins,” Niccol said in an interview. He emphasized that the company will try new approaches to improve visibility — even if they break with the company’s long-standing traditions.


The shares jumped as high as $422.99, marking the biggest gain since the company went public in 2006. The chain reported same-store sales that topped analysts’ projections, providing a welcome respite from the negative headlines of recent years, when Chipotle faced food-related illness outbreaks and slumping sales.

‘Low-Hanging Fruit’

The better-than-expected sales precede “the start of a turnaround that will be led by a credible new CEO with an open mind and ample low-hanging fruit,” Cowen analyst Andrew Charles said in a research note. He upgraded Chipotle to market perform from underperform.

While the “slope and amplitude of the recovery remain in question,” investors will give management the benefit of the doubt in the short term, he said.

A key goal is to recapture consumers’ attention — an area where Taco Bell excelled under Niccol.

“Chipotle has not been out there driving culture and leading conversations and reminding people that we do great food,” Niccol said. “We haven’t done it in a way that’s fun and gets people to talk about it.”

However, some analysts are cautious.

Brian Vaccaro, an analyst at Raymond James, said that there may not be any quick or easy fixes to recapture the same-store sales growth rates of the past, citing intense restaurant competition and customer traffic that’s already above industry peers.

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