The Ratings Game: Chipotle to invest $50 million on restaurant refresh program, which may not be enough

Victor J. Blue/Bloomberg
Chipotle’s restaurant revamps include new lighting and enhanced digital capabilities.

Chipotle Mexican Grill Inc. was downgraded to sell from neutral at Stifel after the restaurant chain, still struggling to recover from illness outbreaks that began in 2015, said it would make a one-time discrete investment of $50 million, about $20,000 per restaurant, to upgrade and refresh its locations.

Chipotle CMG, -10.56% shares are down 9.6% in early Wednesday trading after the earnings announcement, which beat expectations.

The investment is in addition to the typical $10,000 per restaurant, or about $24 million, that the company spends for normal upkeep, said Chief Financial Officer John Hartung, according to a FactSet transcript of the late Tuesday earnings call.

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