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Shares of Chipotle Mexican Grill (NYSE: CMG) fell 15% last month, according to data provided by
Chipotle's comparable-restaurant sales plunged 21.9% in the third quarter, leading to a 14.8% drop in revenue. That marked the fourth straight quarter of double-digit declines in comp growth for the beleaguered restaurant chain.
Analysts who previously expected Chipotle's sales to rebound sooner are now predicting that it could take years for the burrito shop's sales to fully recover, with a recent Morgan Stanley
Worse still, Chipotle announced that it would be
Chipotle is using a host of strategies to entice customers to return to its restaurants, including a TV advertising campaign, new menu items, and even free food. While management is optimistic that these measures will help Chipotle's sales rebound in 2017, some analysts believe the company's aggressive promotions could cheapen its brand and dent margins.
To offset these negative pressures on its profitability, Chipotle has developed a lower-cost restaurant design that it believes will help to preserve its industry-leading restaurant-level economics. But if customers don't return to Chipotle's stores, slashing costs won't be enough.
Still, optimists believe Chipotle will ultimately prevail. Even as many bears are
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