What's moving markets today
Chipotle's efforts to turn the company around seem to be working.
The company reported on Wednesday that comparable restaurant sales grew 6.1% in the last three months of 2018. In that period, revenue grew 10.4% to $1.2 billion. Digital sales spiked a dramatic 65.6%.
Shares jumped about 9% after the bell on Wednesday.
"The growth acceleration this quarter gives us confidence that our strategy is working," CEO Brian Niccol said in a statement.
Customers were hesitant to trust the restaurant after an E. coli outbreak made sickened 60 people in 14 states in late 2015 and early 2016. Chipotle (CMG) also struggled to contain several norovirus incidents in its restaurants over the past few years.
But Niccol, who joined the company in February of 2018, has helped turn things around. Sales have rebounded thanks to an investment in digital, a focus on real ingredients and menu innovations like diet-friendly bowls.
This year, the company is focusing on reducing turnover at the general manager level by improving leadership training and offering employees a career development path to help retain talent.
"Internally we're calling this the year of the General Manager," Niccol said on Wednesday's earnings call.
US stocks closed slightly lower on Wednesday, as video game makers reported sales that missed forecasts and Spotify (SPOT) shares slumped despite reporting a strong operating profit last quarter.
- The Dow closed narrowly lower, down 21 points or 0.1%.
- The S&P 500 fell 0.2%
- The Nasdaq slipped 0.4%.
Shares of video game makers Electronic Arts (EA) and Take-Two Interactive (TTWO) were slammed Wednesday. Each fell more than 13% after they reported weaker sales and profits because of competition from Fortnite, the popular multiplayer game.
Snap (SNAP) had a monster day, up 22%, a day after the company reported that its number of users was holding steady
All three stock indexes are moving slightly lower on this quiet Wednesday:
- Dow is off .05%.
- Nasdaq is down 27 points.
- S&P is down 6 points.
Snap Inc. (SNAP) also continues to have a monster day, it's up 24%.
Mark Zuckerberg's former mentor has some harsh criticism for Facebook.
Roger McNamee charges that the social network is hurting democracy and betraying user trust.
McNamee told First Move anchor Julia Chatterley that he compares tech's outsized influence to the once-unregulated chemical industry, and says that it's due for a reckoning:
We have to have a conversation about how we do that with respect to technology platforms that have been careless in the way they have interacted with users."
McNamee, who is still a Facebook investor, admitted that the company's business model "creates harm."
"My observation is that people have the ability to withdraw their attention from Facebook, Google, Instagram and YouTube and the products that depend upon the attention," he said. "We can spend less time doing politics or getting into arguments and find ways not to let them make us angry."
The newspaper said it hit a new high of 4.3 million total paid subscriptions, and wants to increase that to 10 million by 2025.
On the digital side of the business, the Times' raked in revenue of $709 million, which leaves it well positioned to meet another goal — $800 million in digital revenue by the end of 2020.
The stock is up nearly 35% for the year.
This post has been updated to reflect the rising stock price.
The Dow fell 50 points, or 0.2%. The S&P 500 was down about 0.2%, and the Nasdaq declined 0.1%.
- Shares of Snap (SNAP) skyrocketed 24%, a day after the company reported that its number of users was holding steady — a surprise for a company that was expecting declines during the holiday quarter.
- Spotify (SPOT) slumped 5% even though the company just reported its first-ever quarterly profit. It expects to lose money this year.
- Video game companies are getting hit hard this morning. Shares of both Take-Two Interactive (TTWO) and Electronic Arts (EA) each fell more than 12%. Investors are worried that gamers are losing interest in traditional titles, and instead are flocking to multi-player “battle royale” games like Fortnite.
Video game investors are doing the Take the L loser dance from Fortnite this morning. Shares of both Take-Two Interactive (TTWO) and Electronic Arts (EA) are down more than 10% in early trading due to disappointing guidance.
Take-Two posted earnings and sales that topped forecasts, thanks to the success of its new Red Dead Redemption 2 game. But its outlook was well below forecasts.
Investors are worried that gamers may be losing interest in traditional PC and console titles and are flocking instead to mobile multi-player "battle royale" games like the immensely popular Fortnite and PlayerUnknown's Battlegrounds.
The bad news from Take-Two and EA is probably not a great sign for the other big US video game company either. Shares of Activision Blizzard (ATVI), which reports its latest results on February 12, fell 6% in early trading.