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It’s official: Chipotle’s desperate attempt to save itself failed
(Business Insider/Hayley Peterson)
Chipotle's sales continue to plunge following the E. coli outbreak that affected restaurants in 14 states one year ago.
Revenue declined 14.8% to $1 billion in the third quarter and same-store sales, or sales at stores open at least a year, dropped 21.9%, the company said Tuesday.
Net income for the quarter was $7.8 million, a decrease from $144.9 million for the period last year.
The company's rewards program — called Chiptopia — did little to lift third-quarter sales.
The three-month program offered millions of dollars in free food to customers. It was launched in July, just before the start of the third quarter.
Chipotle's sales declines showed only minor improvement since the second quarter, however, when same-store sales fell 23.6%.
But Chipotle co-founder Steve Ells says Chipotle is making "steady progress" on its sales recovery.
"We are earning back our customers’ trust, and our research demonstrates that people are feeling better about our brand, and the quality of our food," he said in a statement on the company's third quarter earnings. "While this year has been a year of reinvestment, we are now focused on continuing to further recover sales and improve our economic model to create long-term shareholder value."
The company revealed on an earnings call Tuesday that it will be adding desserts to its menu soon, as well as considering other new menu items in the near future.
Chipotle's new chorizo protein, which launched nationally in October, now accounts for 7% of entree sales, executives said.
The company announced some cost-cutting measures, as well, including a restaurant redesign that costs $40,000 less to build per location.
Chipotle also revealed that it's pulling the plug on its Southeast Asian concept, ShopHouse, which has 15 locations across the US.
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