Analyst: Chipotle Mexican Grille Inc Q1 At Risk From Pork Problem

Chipotle Mexican Grill Inc.

shares could fall Wednesday on news it will suspend pork sales at a third of its restaurants, an analyst said. Denver-based Chipotle temporarily halted the sales because suppliers weren't adhering to company rules on animal welfare, according to multiple reports. Chipotle changed hands recently down more than 1 percent at $706. Miller Tabak's Stephen Anderson shaved nearly 2 percent from his first-quarter earnings forecast and reduced his estimate of same-store sales for the period to between 10 percent and 10.3 percent, from 11 percent. Chipotle's action underscores its "efforts to build and maintain long-term trust with its customers," Anderson said. But the potential impact on first-quarter results "cannot be denied," according to Anderson, who maintained a Hold rating on Chipotle. About one-third of Chipoltle's nearly 1,800 restaurants are affected, and Anderson expects most of the 7 percent of customers who order pork items will substitute other items on the menu. But about 2 percent to 3 percent of customers will go elsewhere, according to Anderson, who said the disruption's duration isn't known.