Why Chipotle Mexican Grill, Barnes & Noble, and Moneygram International Tumbled Today

Despite having a three-day weekend ahead of them, investors didn't appear to have much holiday spirit, as the stock market didn't stray too far from the flatline Thursday. A mix of positive and negative earnings reports largely kept broader markets mixed, but that didn't prevent some stocks from posting sharp losses as trading ended for the short week. Chipotle Mexican Grill (NYSE: CMG  ) , Barnes & Noble (NYSE: BKS  ) , and Moneygram International (NASDAQ: MGI  ) were all among the worst performers on the day.

Chipotle Mexican Grill fell 6% after the fast-casual Mexican-food restaurant chain didn't live up to the high expectations of its investors. Although revenue jumped 24% on a 13.4% gain in same-store sales, earnings per share fell far short of what shareholders had wanted to see from the burrito giant. The big culprit: surging food costs, which climbed by more than a third. Although Chipotle accepted the hit to its operating margins during the first quarter, the company said that it would pass through those higher costs in the form of menu-price increases this quarter. Despite Chipotle Mexican Grill issuing higher same-store sales guidance for the remainder of the year, investors appear skeptical whether the company will be able to hold onto customers in light of higher prices.

Barnes & Noble dropped 12% after founder Leonard Riggio sold off a huge chunk of his holdings in the bookseller's shares. Riggio sold 3.7 million shares, raising about $70 million in the process. Even though that's a huge number, it represents less than a quarter of Riggio's position in Barnes & Noble, and he still owns about 20% of Barnes & Noble's outstanding shares. The ongoing deterioration of Barnes & Noble's business has been troubling to long-term shareholders, who are understandably jittery when major insider sales occur, and it's increasingly difficult to maintain confidence in Barnes & Noble even after Riggio's positive comments following his sale.

Moneygram International plunged 18% as retail giant Wal-Mart (NYSE: WMT  ) decided to offer a competing money-transfer business. With its Walmart-2-Walmart service, the retailer will offer transfers at price points of $4.50 and $9, depending on the size of the transaction, which is far less than what some competing services charge to provide similarly sized transfers. Moneygram will still retain its hold on Wal-Mart's international money-transfer business, as Walmart-2-Walmart will, at least initially, be available only for domestic transfers. Still, the move shows the vulnerability of having a business model with little or no barrier to entry, especially as electronic payment systems have gotten so much attention lately.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the eight-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2920233, ~/Articles/ArticleHandler.aspx, 11/23/2014 7:22:37 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement