(Reuters) - Chipotle Mexican Grill Inc (CMG.N) said on Wednesday the chain will shut up to 65 underperforming restaurants and revamp its marketing under Chief Executive Officer Brian Niccol, but many questions remain unanswered about what to expect under the new leadership.
Chipotle’s share price has risen more than 80 percent since Niccol’s hiring was announced in February and as the company focused on how to increase online sales.
Chipotle will add “in-app” delivery of its products to about 2,000 restaurants by the end of the year and launch a long-awaited loyalty program in 2019, executives said on a call with investors on Wednesday.
Executives did not say whether fast-casual dining menu items such as quesadillas and nachos would be added to the menu, and they brushed aside a question about international plans, saying they would focus on “aggressive growth” in the United States.
Shares fell 3.1 percent to $443 in after-hours trade after few details were delivered on how the beleaguered burrito maker would innovate its business model and improve its digital service.
“There are some key areas they really did not address, notably international strategy,” Maxim Group analyst Stephen Anderson said.
“Also capital allocation, particularly in regard to share buybacks and potential discussion for a dividend. I still think it will happen but it is probably going to be about a year or two away,” Anderson said.
Executives said costs from corporate restructuring would cause the chain to take between $115 million to $135 million in charges, including about $50 million to $60 million in the second quarter. The chain will close 55 to 65 restaurants.
