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Wednesday
Jun272018

Chipotle to Close Some Stores, Revamp Menu

Chipotle Mexican Grill Inc will shut up to 65 underperforming restaurants as it revamps the menu and marketing under new Chief Executive Officer Brian Niccol, executives of the burrito maker promised on Wednesday. No list of potential closing sites has been announced so far.

Niccol and his team in a much-anticipated call with investors, who have driven shares up more than 80 percent since Niccol’s hiring was announced in February, focused on how the once high-flying chain could raise so-called digital sales. Chipotle will add in-app delivery to about 2,000 restaurants by the end of the year and launch a long-awaited loyalty program in 2019. 

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 about 3 percent to $443 in after-hours trade after executives said the changes would cause charges of $115 million to $135 million, including about $50 million to $60 million in the second quarter. The chain will close 55 to 65 restaurants in the process. 

Chipotle also said it would launch a customer loyalty program in 2019, as the troubled burrito chain seeks to right course after consumer fatigue and a rash of food safety lapses dragged on the brand. 

The company said it would begin testing the program in the second half of this year. 

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