Chipotle whiffed on profits, and the stock is sliding.
The fast-casual restaurant chain reported third-quarter earnings Tuesday below analysts’ expectations, revenues right in line, and same-store sales that topped forecasts.
And in premarket trading on Wednesday, shares were down by as much as 8%.
Chipotle posted earnings per share of $4.59 and revenues of $1.22 billion. Same-store sales – at locations open for at least one year – grew 2.6%, beating expectations.
Analysts had estimated that Chipotle earned $4.62 in adjusted earnings per share on revenues of $1.22 billion. They had forecast that same-store sales rose 2.5% during the quarter, according to Bloomberg.
Chipotle’s restaurant-level operating margin fell 50 basis points from third-quarter 2014 to 28.3% due to higher labor costs. The company opened 53 new restaurants in the quarter.
The company said it expects low-to-mid single-digit same-store sales growth for 2015, and between 215 to 225 new restaurant openings, up from the previous forecast for 190 to 205.
The stock rocketed about 12% in the month following the second-quarter results this year, when Chipotle smashed earnings expectations.
The company had supply-chain issues this year, and stopped serving pork at hundreds of restaurants because some suppliers violated its standards.
Co-CEO Steve Ells said in the statement: “As we have grown our restaurants through the year, we are able to push our standards higher in what we can accomplish with our food culture. We have currently returned carnitas to 90% of our restaurants, and will look to bring it back to 100% of restaurants during the fourth quarter.”
Chipotle shares are up 3% year-to-date and 8% over the last 12 months.