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NEW YORK (AP) — Shares of Chipotle Mexican Grill Inc. fell Wednesday after an ITG analyst noted that a measurement of sales growth seems to be slowing.
THE SPARK: ITG analyst Steve West initiated his revenue forecast at $700 million for the second quarter. That's below the $705.8 million analysts on average are expecting, according to FactSet.
West also noted that revenue at restaurants open at least a year seemed to be decelerating, with his forecast for second-quarter growth between 7 percent and 8 percent. That compares with 12.7 percent in the first quarter and 10 percent in the same period last year.
Revenue at stores open at least a year is a key measure of a company's performance because it strips out the impact of stores that recently opened or closed. On a two-year basis, West estimates the figure to be up 17.5 percent in the second quarter, versus 25.1 percent in the first quarter.
A representative for Chipotle said the company doesn't comment on analyst opinions or day-to-day stock fluctuations.
THE BIG PICTURE: Chipotle has been a standout among restaurant companies for several years as customers have flocked to the chain. That has made it a darling on Wall Street. In April, the Denver-based company said its first-quarter net income rose by 35 percent as more diners visited its restaurants and it benefited from price increases.
Chipotle, which has more than 1,200 restaurants, plans to add another 155 to 165 this year.
THE ANALYSIS: Despite his relatively modest forecast, West noted that Chipotle is still experiencing industry-leading growth and is still expected to report strong sales at quarter end. He said revenue growth for the quarter was primarily driven by price increases and traffic growth
SHARE ACTION: The stock was down $18.06, or about 4 percent, at $397.35.