Chipotle (CMG) Stock Down on New Marketing Strategy as Executive Arrested

Shares of Chipotle (CMG) are down in pre-market trading as the company takes on a new marketing strategy as the next chapter in executive Mark Crumpacker’s drug saga unfolds.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- Shares of Chipotle Mexican Grill  (CMG) - Get Report  are down 0.35% to $395 in pre-market trade following chief creative and development officer Mark Crumpacker's surrender to the New York City Police Department yesterday on drug charges.

Crumpacker was arraigned at Manhattan Supreme Court and released for $4,500 cash bail yesterday for his alleged involvement in a drug ring.

Chipotle is continuing a new creative strategy in his absence with a new short film aimed at demonstrating the quality and freshness of the company's ingredients.

The short film, following the style of other marketing videos released by the company, has been in the works for 18 months, prior to recent food safety concerns or Crumpacker's legal troubles.

Called "A Love Story," the film is to be released today and features two juice stand owners who use traditional ingredients and methods to compete with one another for customers. By the video's close, the rivals unite as one company and offer fresh products to their customers.

Director of brand marketing at Chipotle, Mark Shambura, acknowledged that the company has some "trust to regain" following disease outbreaks at various locations of the Denver-based burrito maker's restaurants over the past year that have caused its stock price and sales to plummet.

But Shambura said that the company is seeking "to remind consumers about our commitment to using quality ingredients and classic cooking," the Wall Street Journal reports.

Separately, TheStreet Ratings rated this stock as a "hold" with a ratings score of C.

The company's strongest point has been its very decent return on equity which TheStreet Ratings feels should persist. TheStreet Ratings also finds weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and poor profit margins.

You can view the full analysis from the report here: CMG

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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