According to the law firm press release, Chipotle develops and operates “fast-casual,” fresh Mexican food restaurants in the United States, Canada, the United Kingdom and France.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and prospects. As a result of defendants’ false statements, Chipotle stock traded at artificially inflated prices during the Class Period, reaching a high of $440.40 per share on April 13, 2012.
On July 19, 2012, Chipotle issued a press release announcing its second quarter 2012 earnings results, reporting disappointing revenue results and cautious guidance for the year. As a result of this news, Chipotle stock plunged $86.88 per share to close at $316.98 per share on July 20, 2012, a decline of 22% on volume of 9.8 million shares. This was the largest one-day stock decline in the Company’s history.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) Chipotle’s did not have the pricing power to implement price increases sufficient to offset rising food costs and, as a result, the Company’s margins would be under pressure as Chipotle would be unable to pass these commodity costs off to the consumers; (b) demand for Chipotle was slowing due to the economy and increased competition and could not support the Company’s aggressive 2012 earnings forecasts; and (c) Chipotle was experiencing a deceleration of growth as it was becoming a mature company.
On April 17, 2013, the Court issued an Order consolidating cases, appointing lead plaintiffs, and approving the selection of lead counsel.
On June 20, 2013, plaintiff City of Dania Beach Police & Firefighters’ Retirement System filed a Notice voluntarily dismissing its claims without prejudice. The city's counsel also withdrew from this action.
On July 3, 2013, the parties entered into a Stipulation voluntarily dismissing this case.