The month-long crisis experienced by Chipotle has drained its sales and scared its customers away. It also cost the company three years of its income and probably some job cuts to reduce cost of operations. But the future is still promising says a JP Morgan analyst.
Between fiscal year 2014 and fiscal year 2017, the restaurant chain known for its Mexican grill will have lost a lot from the multiple food-related disease outbreaks that occurred last year, said a research note from JP Morgan on Thursday.
These analysts believe that the company's income per share in fiscal year 2017 to be approximately equal to its fiscal year earnings in 2014 even with the surge in sales due to the addition of around 700 stores during that period.
In a related development, a group of investors is trying to unseat two board members of the Chipotle Mexican Grill Inc. as per their Wednesday filings with the Securities and Exchange Commissions.
This group claims that Chipotle is currently at a critical point considering the three quarters of dismal revenues brought about by the restaurant's foodborne disease outbreaks.
Dieter Waizenegger, CtW Investment Group executive director wrote in a letter urging voters to withhold support for Darlene Friedman and Patrick Flynn, current directors of the company.
Both are long-term members of the restaurant chain's nominating and governance committee. This letter comes as a lead-in to the forthcoming annual board meeting of the Denver-based company on May 11.
Chipotle has increased its promotional spending to entice customers back and offered giveaways and buy one, get one free deals. It is expected that the restaurant chain will report its first-ever loss in its first quarter earnings in the next two weeks.
But J.P. Morgan analysts believe that the fall out will not be for the long term. They said Chipotle is "a highly meaningful brand, that with time and expense can regain customer trust."
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