Chipotle’s efforts to turn the company around seem to be working.
The company reported on Wednesday that comparable restaurant sales grew 6.1% in the last three months of 2018. In that period, revenue grew 10.4% to $1.2 billion. Digital sales spiked a dramatic 65.6%.
Shares jumped about 9% after the bell on Wednesday.
“The growth acceleration this quarter gives us confidence that our strategy is working,” CEO Brian Niccol said in a statement.
Customers were hesitant to trust the restaurant after an E. coli outbreak made sickened 60 people in 14 states in late 2015 and early 2016. Chipotle (CMG) also struggled to contain several norovirus incidents in its restaurants over the past few years.
But Niccol, who joined the company in February of 2018, has helped turn things around. Sales have rebounded thanks to an investment in digital, a focus on real ingredients and menu innovations like diet-friendly bowls.
This year, the company is focusing on reducing turnover at the general manager level by improving leadership training and offering employees a career development path to help retain talent.
“Internally we’re calling this the year of the General Manager,” Niccol said on Wednesday’s earnings call.
US stocks closed slightly lower on Wednesday, as video game makers reported sales that missed forecasts and Spotify (SPOT) shares slumped despite reporting a strong operating profit last quarter.
Shares of video game makers Electronic Arts (EA) and Take-Two Interactive (TTWO) were slammed Wednesday. Each fell more than 13% after they reported weaker sales and profits because of competition from Fortnite, the popular multiplayer game.
Snap (SNAP) had a monster day, up 22%, a day after the company reported that its number of users was holding steady
All three stock indexes are moving slightly lower on this quiet Wednesday:
Video game companies are still getting slammed. Take-Two Interactive (TTWO) is down 13%, Activision Blizzard (ATVI) is dropping 10% and Electronic Arts (EA) is down nearly 14%.
General Motors (GM) is up 1.55% after posting better-than-expected earnings.
Snap Inc. (SNAP) also continues to have a monster day, it’s up 24%.
Mark Zuckerberg’s former mentor has some harsh criticism for Facebook.
Roger McNamee charges that the social network is hurting democracy and betraying user trust.
But he doesn’t think that Facebook (FB) will change. So with his new book called “Zucked,” he’s hoping to change users’ habits on Facebook and other platforms including Instagram, Google and YouTube.
McNamee told First Move anchor Julia Chatterley that he compares tech’s outsized influence to the once-unregulated chemical industry, and says that it’s due for a reckoning:
McNamee, who is still a Facebook investor, admitted that the company’s business model “creates harm.”
“My observation is that people have the ability to withdraw their attention from Facebook, Google, Instagram and YouTube and the products that depend upon the attention,” he said. “We can spend less time doing politics or getting into arguments and find ways not to let them make us angry.”
The New York Times (NYT) posted another strong earnings report, which is sending the stock nearly 12% higher today. It’s up 15% over the past week:
The newspaper said it hit a new high of 4.3 million total paid subscriptions, and wants to increase that to 10 million by 2025.
On the digital side of the business, the Times’ raked in revenue of $709 million, which leaves it well positioned to meet another goal — $800 million in digital revenue by the end of 2020.
The stock is up nearly 35% for the year.
This post has been updated to reflect the rising stock price.
The Dow fell 50 points, or 0.2%. The S&P 500 was down about 0.2%, and the Nasdaq declined 0.1%.
Video game investors are doing the Take the L loser dance from Fortnite this morning. Shares of both Take-Two Interactive (TTWO) and Electronic Arts (EA) are down more than 10% in early trading due to disappointing guidance.
Take-Two posted earnings and sales that topped forecasts, thanks to the success of its new Red Dead Redemption 2 game. But its outlook was well below forecasts.
Investors are worried that gamers may be losing interest in traditional PC and console titles and are flocking instead to mobile multi-player “battle royale” games like the immensely popular Fortnite and PlayerUnknown’s Battlegrounds.
The bad news from Take-Two and EA is probably not a great sign for the other big US video game company either. Shares of Activision Blizzard (ATVI), which reports its latest results on February 12, fell 6% in early trading.
Spotify (SPOT) raked in a sizable operating profit last quarter, but its investors are singing the blues. Shares are down 7% in premarket trading after the company warned that it could lose hundreds of millions of dollars this year.
Shares of Snap (SNAP) soared 25% at the open following yesterday’s fourth-quarter earnings report.
The stock is in a turnaround, too. Despite losing roughly 60% of its value last year, it’s up nearly 30% in 2019.
SoftBank’s bet on Uber is paying off. Nvidia is another story.
Operating profit for the final quarter of 2018 jumped 60% from a year earlier to 438 billion yen ($4 billion), the Japanese company said Wednesday.
A big chunk of that came from a surge in income from SoftBank’s huge tech fund, which has benefited from the rising value of investments in Uber and WeWork.
But it took a billion-dollar hit from its stake in US chipmaker Nvidia (NVDA), whose shares plunged toward the end of 2018.
Since then, SoftBank (SFTBF) has dumped the shares. Son said the Vision Fund offloaded its entire stake in Nvidia last month.
Earnings from Toyota and Daimler are adding to worries over the strength of the global auto industry.
Toyota downgraded its full year forecast on Wednesday. The Prius maker said its sales in North America declined in the final three months of last year.
Shares in Toyota (TM) dropped as much as 1.5% in Tokyo, before recovering some ground to close down 0.7%.
Daimler said in an earnings statement that fourth quarter operating profit dropped 22% compared to the previous year. The German carmaker also cut its dividend.
“2018 was a year of strong headwinds — with the ongoing diesel debate, the changeover to the new [emissions] test method and the global trade dispute,” Daimler Chairman Dieter Zetsche said in a statement.
Daimler (DDAIF) shares dropped nearly 2% in Frankfurt after the announcement.
General Motors (GM) is up next, set to report before the open.
It will be its first quarterly report since announcing plans to cut 8,000 salaried staff and close five plants in North America.
Analysts are forecasting lower earnings for the quarter and the year.
US stock futures are pointing down.
The Dow closed up 0.7% on Tuesday, while the S&P 500 closed 0.5% higher and the Nasdaq gained 0.7%.
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