Chipotle may still have a grueling slog ahead: Analysts now predict it’ll be lucky if sales have rebounded by the year 2018 from the company’s food-safety disaster. If that weren’t bad enough, they add that even then, the chain might not be profitable like it was back in its glory days. Yearly sales at the chain’s average restaurant hit more than $2.5 million before the crisis, and the analysts say hitting those kinds of numbers again in two years would be “the best-case scenario, not the base-case scenario.” The wall to clear to reach profitability is higher now, too, because the chain is also incurring greater operating costs thanks to its humdinger of a new safety plan, which executives say should make Chipotle “the best in the world at food safety.” To all of the above, also add the perhaps overzealous burrito giveaway the chain has going on, which CNBC estimates is worth about $62 million. The generous promo appears to be increasing foot traffic, but in their research note, the analysts at investment firm Wedbush Securities say there’s no proof so far Chipotle can sustain that once the coupons are gone.
[CNBC]
