Chipotle shares are plummeting as the company tries to win back customers
Chipotle Mexican Grill shares are one of the biggest losers in the market today.
Shares of the restaurant fell more than 7% on Tuesday. The drop came after the company announced it would be spending more money on marketing as it tries to win back customers.
The chain had a string of incidents involving E. Coli contamination at its restaurants, and its stock has fallen 27.97% over the last three years.
After an earnings call on Monday, the company issued an 8-K, an SEC regulatory document, saying it will be increasing spending on marketing by 0.2-0.3% in the second quarter compared to the first quarter of this year.
"As a result, we expect other operating costs as a percentage of sales for the second quarter to be at or slightly higher than reported for the first quarter," the filing said.
Credit Suisse updated its estimates for Chipotle after the 8-K was released. "Bottom line, this update should lead to modest downward earnings revisions which will likely put some pressure on the stock today," the bank wrote.
Credit Suisse rates Chipotle as a neutral, with a price target of $425.00 which was about 7.4% lower than the price at the time Credit Suisse revised its price target. Chipotle has since dropped to come about even with the bank's prediction.
Shares of Chipotle are up 13.69% this year, even after Tuesday's declines.
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