Shares of Chipotle Mexican Grill, Inc. CMG were briefly halted ahead of Wednesday's market open after the company confirmed it plans to replace its CEO Steve Ells.
What You Need To Know
Ells founded Chipotle in 1993 and also serves as the company's chairman. He will be relegated to the role of executive chairman upon the completion of a search to replace him as CEO, the company said in a press release.
A change of guards comes at a time when the restaurant chain's stock is down 25 percent since the start of 2017 and up a mere 4 percent over the past five years. The stock peaked north of $700 in 2015, but was rocked by multiple foodborne illness outbreaks that damaged its brand reputation. Many Wall Street analysts lost their appetite for the stock, especially after a disappointing third quarter earnings report.
Why It's Important
Bringing in a new CEO would give Ells the ability to better focus on "bringing innovation to the way we source and prepare our food," he said in the press release. Doing so would improve the company's ability to provide customers with "delicious food that is prepared with high quality ingredients that are raised responsibly and served in a way that is accessible to everyone."
What's Next?
Ells oversaw the expansion of Chipotle from one single location in Colorado to more than 2,350 restaurants today, but the company believes a new executive is needed to "reinvigorate the brand and help the company achieve its potential."
The stock closed Tuesday at $285.86. When the stock reopened Wednesday morning, shares traded around $302 at time of publication.
Steve Ells Returns To Sole Chipotle CEO Role; What Should We Expect?
Chipotle Exec: We're Not Recovering Like We Hoped
Image credit: Chis Potter, Flickr
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
