Shares in Chipotle Mexican Grill (CMG) rose by around 7% on Tuesday following an announcement by the board of the fast-food burrito chain of a 50-for-1 split they plan to make to their common stock in the next few months.
Chipotle Mexican Grill Shares Boom After Split Announced
This move would see shareholders get 49 extra shares for every share held on 18 June. Their plan still needs approval from their shareholders, which will be sought at their next annual meeting which is due to be held on 6 June.
The post-split CMG stock will be traded from 26 June onwards if approved. The California-based company says it will be one of the largest stock splits ever carried out on the NYSE. This news helped fuel the share price rise to a record high of $2,797.56, which continues the strong performance, with CMG shares gaining 70% in value in the last year.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
The company’s quarterly sales and profit figures released in February were better than the market estimated. It managed to retain clients in a challenging market despite increasing prices due to the higher cost of raw materials. This came as the American fast-food industry experienced a 1.6% fall in customer traffic in the quarter.
Chief Financial and Administrative Officer Jack Hartung said in a recent interview with Reuters that the coming rise in minimum wages for fast food workers is going to cause them to look at ways to protect their profit margin, saying:
That’s going to require some kind of pricing, we just haven’t decided what kind.
