Chipotle Mexican Grill’s woes continued in the third quarter, with rising avocado prices, hurricanes, and hackers gobbling up a chunk of the quick-serve chain’s earnings that even its heavily-marketed (and questionably-received) queso couldn’t fill.
Chipotle, still recovering from waves of food safety scares that started in 2015, announced earnings that missed Wall Street expectations Tuesday. In the third quarter, comparable restaurant sales, a key metric of revenue growth that focuses on stores open for at least a year, rose 1% in the three months ending September. Analysts had expected growth of 1.1% according to Bloomberg data.
Following the news, shares of the fast-service chain falling nearly 10% to $291 a piece in after-hours trading Tuesday — the stock’s lowest point since mid-2013.
The company also posted earnings of 69 cents per share on revenue of $1.13 billion in the third quarter. Wall Street had anticipated earnings of $1.62 per share on revenue of $1.14 billion.
“The third quarter was impacted by several items…related to hurricanes from this summer, historically high avocado costs, store closures, and a data security incident,” Chipotle Chief Financial Officer John Hartung said in the company’s Tuesday earnings call, noting that 425 locations were in the path of either Hurricane Harvey, or Hurricane Irma. “We believe the combination negatively impacted earnings per share by $1.05.”
Still, even when adjusting for those one-time items, Chipotle’s earnings came in below expectations, at about $1.33 per share against the Wall Street consensus of $1.63.
Chipotle is also expecting fewer restaurant openings than its previously disclosed range of 195 to 210 locations.
The company’s earnings miss also came despite Chipotle rolling out the company’s “largest ever telephone advertising campaign” to promote it’s newest item, queso, according to Chief Financial Officer John Hartung during Chipotle’s earnings call Tuesday. Queso however has reportedly received mixed responses on social media, prompting RBC Capital analysts to reduce their estimates for Chipotle’s earnings earlier this week.