Chipotle poised for best year since 2013 thanks to new CEO Brian Niccol

FAN Editor

Less than a year after taking the helm as CEO of Chipotle Mexican Grill, Brian Niccol is still scoring big with investors, fueling the burrito chain’s best year since 2013.

Shares of Chipotle soared nearly 50 percent in 2018 — the stock’s best performance since its 80 percent surge in 2013.

But it’s struggled to regain customer trust after a series of foodborne illness outbreaks nearly three years ago. Ahead of those events, the stock peaked at $758.61 a share on Aug. 5, 2015.

While Chiptole’s stock is currently almost half of that price at about $431 a share, Niccol’s presence has reinvigorated confidence in the restaurant’s ability to turn itself around. The former Taco Bell CEO’s appointment has resulted in a more than 67 percent bump in the company’s stock since it was announced in February.

Since joining Chipotle in March, Niccol has championed upgrades to the company’s mobile app, its internal software and in-restaurant technology. His goal has been to remove friction in all aspects of the ordering and making process, so that food gets to customers faster.

Niccol’s strategy is as much about driving sales as it is about reminding customers who have left the brand what made them fall in love with Chipotle to begin with.

“It takes time to build a culture of accountability,” Niccol said on an earnings conference call in July. “We know that when the food is delicious, the feel of the restaurant is great and we remove the friction from the flow of the order processes, no matter the channel, we delight customers.”

While the Chipotle has been testing new menu items in limited markets across the U.S, it plans to be more focused in other areas of the business like improving its digital capabilities.

Chipotle has been updating its kitchens with a second-make line. These are buffets similar to the one at the front of the store, but are just for digital orders. The company is also rolling out digital order pick-up shelves, which are meant to prominently display online orders once they have been filled.

Additionally, Chipotle is testing drive-up windows just for guests to pick up digital orders.

These efforts, along with pricier burrito bowls and new marketing campaign which began in September, have bolstered sales. In the third quarter, same-store sales grew 4.4 percent.

Ahead of Chipotle’s food safety issues, same-store sales have skyrocketed as much as 19.8 percent as consumers flocked to the restaurant.

Sales took a hit in late 2015 and throughout 2016 in the wake of several outbreaks of Norovirus and E. coli, but rebounded in 2017. Easy comparisons boosted same-store sales growth dramatically, but those figures have since settled into more steady growth.

Chipotle is expected to report its fourth quarter earnings in February. Analysts currently expect same-store sales growth to be up 4.2 percent, according to data compiled by FactSet. For comparison, industry-wide same-store sales tend to rise an average of 1 to 2 percent.

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