What's going on?

Shares in Mexican restaurant chain Chipotle neared their lowest in five years on Wednesday (ouch) after the firm again posted quarterly earnings that fell short of Wall Street expectations.

What does this mean?

Once a darling of investors, Chipotle just can�t catch a break these days � it reported late on Tuesday that a norovirus outbreak at one of its restaurants over the summer and the September hurricanes kept customers away and pushed down its revenue during the third quarter. On top of that, increasing labor costs and the higher price of avocados are hurting its profitability (a.k.a. margins).

All of this caused the company�s sales and profits to come in below expectations, and its stock slid by 15% on Wednesday!

Why should I care?

For markets: Chipotle�s recovery still has a ways to go�


The chain recently launched a queso dip in an attempt to lure back spooked customers, but food bloggers and Wall Street analysts alike have declared it a bust. It also hired a new Chief Marketing Officer in the hopes of patching up its recent PR nightmares. Now, the company is paring back its expansion plans with the aim of regaining public trust before it expands much further � which means that the significant sales growth Chipotle once had is now much less likely (at least in the near term). That�s causing some analysts to say they think Chipotle�s stock is overvalued.

The bigger picture: Stocks were down on Wednesday but it�s still been a strong �earnings season� (so far�).


American stocks were down overall on Wednesday, as Chipotle and some other major US companies like Dow, Boeing and Advanced Micro Devices reported worse-than-expected quarterly earnings. However, this earnings season has been largely positive: most major American companies have reported earnings that beat analysts� expectations. However, earnings from the big tech companies will be in focus over the coming week, which will determine how successful this earnings season will ultimately be.