Shareholders File Class Action Lawsuit Against Chipotle, Claiming Misrepresentation of Business Conditions

A shareholder representing all persons and entities that purchased or acquired Chipotle Mexican Grill, Inc.'s common stock between February 8, 2024, and October 29, 2024, has filed a class action lawsuit against the company. The suit also includes those who purchased call options or sold put options during this period.

The lawsuit, managed by Robbins LLP, alleges that Chipotle misled investors about the impact of customer dissatisfaction on its business. The complaint claims that Chipotle failed to disclose that inconsistent portion sizes were causing customer dissatisfaction and increased costs.

On July 24, 2024, in its Q2 earnings call, Chipotle acknowledged the issue of portion inconsistency. The company stated its commitment to invest in ensuring generous portion sizes, which would inevitably lead to an increase in the cost of sales. However, it is alleged that the impact of these costs was not fully disclosed to investors.

By the Q3 earnings call on October 29, 2024, Chipotle reported an increase in the cost of sales compared to the previous year. The lawsuit alleges that this resulted from the decision to give more generous portions to address customer dissatisfaction.

Shareholders are invited to participate in the class action lawsuit against Chipotle. Those wishing to serve as lead plaintiff must submit their application to the court by January 10, 2025. Even without active participation, shareholders may still be eligible for recovery as absent class members.

Robbins LLP, a law firm specializing in shareholder rights litigation, handles the case on a contingency fee basis, meaning shareholders bear no fees or expenses. Since 2002, the firm has reportedly obtained over $1 billion for shareholders in various cases.