Shares of Chipotle Mexican Grill (CMG) shot aloft on Wednesday as Wall Street welcomed word that fast-food maestro Brian Niccol would attain Steve Ells as CEO starting next month.
During the last two years, Chipotle has lost scarcely half of its marketplace value, tormented by a series of food-safety scandals that smashed its code and sent business fleeing. Chipotle is now branch to Niccol in hopes of branch things around, quite when it comes to repair its picture with younger consumers.
“His imagination in digital technologies, grill operations and branding creates him a ideal fit for Chipotle as we find to raise the patron experience, drive sales expansion and make the code some-more relevant,” Ells, who founded the casual-dining sequence in 1993, pronounced in a statement.
With Yum Brands’ (YUM) Taco Bell given 2011 and CEO given 2015, Niccol is credited by analysts with delivering consistently clever results. When he takes the helm at Chipotle on Mar 5, Niccol will be under vigour to repeat his success at Taco Bell, which softened its offerings and became savvier on social media during his reign.
“Taco Bell has also avoided disastrous PR issues in new years and generates some of the top grill margins in the industry,” pronounced Credit Suisse analysts Jason West and Olya Voronetskaya in a note.
Chipotle’s slip began in 2015 restaurants in Oregon and Washington and a case of norovirus in Boston that disgusted some-more than 100 patrons.that forced the closure of dozens of
Beyond the need to new consumers trust in the company, some questioned either Niccol could attain in forging a new strategy to drive expansion at Chipotle.
“While an effective selling campaign to residence the brand’s post-food predicament spoil is necessary, we have problem in seeing a near-term solution or indicating to a strategy that could outcome in a suggestive step-up in Chipotle’s stream low single-digit sales trajectory,” remarkable Wedbush analaysts Nick Setyan and Marshall Pittman.
Shares of Taco Bell were newly up 15 percent, while Yum shares slid scarcely 1 percent.