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It's official: Chipotle's desperate attempt to save itself failed

Oct 26, 2016, 02:11 IST

Business Insider/Hayley Peterson

Chipotle's sales continue to plunge following the E. coli outbreak that affected restaurants in 14 states one year ago.

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Revenue declined 14.8% in the third quarter and same-store sales, or sales at stores open at least a year, dropped 21.9%, the company said Tuesday.

Net income for the quarter was $7.8 million, a decrease from $144.9 million for the period last year.

It appears that the company's rewards program - called Chiptopia - did little to lift third-quarter sales.

The rewards program was launched in July, just before the start of the third quarter.

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The company's sales declines showed only minor improvement since the second quarter, when same-store sales fell 23.6%.

Chipotle co-founder Steve Ells says Chipotle is making "steady progress" on its sales recovery, however.

"We are earning back our customers' trust, and our research demonstrates that people are feeling better about our brand, and the quality of our food," he said in a statement on the company's third quarter earnings. "While this year has been a year of reinvestment, we are now focused on continuing to further recover sales and improve our economic model to create long-term shareholder value. Today we will share our financial and operational goals for 2017, and our plan to achieve them."

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