Embattled activist investor Bill Ackman still thinks Chipotle (CMG) CEO Steve Ells is an "outstanding visionary," even though the restaurant chain's share price is in free-fall following a big earnings miss.

"I think he's an outstanding visionary CEO who's has done a great job building the concept, the brand," Ackman said in an interview with the TheStreet.

Ackman's comments come after the fast-casual chain reported third-quarter earnings last week that missed Wall Street estimates by nearly $1. Chipotle posted earnings per share of $0.69, way off compared to the analyst consensus of $1.64. It claims that the low earnings per share reflect a 64 cents a share impact from being systematically hacked in May and about $0.13 from Hurricanes Harvey and Irma.

However, the company is also still trying to repair its image after it perhaps reached rock bottom in July after a customer at a Dallas-area restaurant posted a video of rodents inside the location. Shortly before that, also in July, 135 customers got sick after eating at a Sterling, Va., Chipotle, which tested positive for norovirus, likely spread by a Chipotle employee. The company is also still trying to repair its image after its E. coli outbreak at restaurants in 14 states in 2015.

Chipotle founder and CEO Steve Ells.
Chipotle founder and CEO Steve Ells.

It's recent share price of $270.20 a share also is well below Ackman's investment cost basis of about $404 or $405 a share. Pershing Square acquired an initial 9.9% stake last year.

The activist, who runs Pershing Square Capital Management, settled with Chipotle in December in a move that added four new directors to the company's board, including Ali Namvar, a member of Ackman's investing team. The restaurant chain also ended its costly co-CEO arrangement after co-CEO Monty Moran left, another success for Ackman. Nevertheless, the investment has been mostly negative for Ackman since then.

Ackman added that Chipotle in May brought in a chief restaurant officer, Scott Boatwright, a former Arby's executive, who he described as "excellent." He also suggested that Pershing Square's investment in Chipotle is only at a very early stage so far, noting that the fund has allocated capital to the investment for roughly a year, a "tiny fraction of time" for one of the fund's investments.

In its earnings release, Chipotle also announced that it opened 38 new restaurants in the three-month period ending on Sept. 30 and closed or relocated three.

Check out our full interview with Bill Ackman:

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