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Published November 22, 2024
Chipotle’s feeling the heat after media reports criticized the Mexican food chain’s skimpy portion sizes. When hungry customers’ allegations caused the chain’s bottom line to plummet, investors responded by tossing out their shares. Some of those shareholders have now filed a class action lawsuit against the company.
In mid-2024, Fox Business and other media outlets reported that Chipotle’s portion sizes were inconsistent or meager. The chain denied the allegations while also implementing efforts to ensure their meals had more heft.
Investors were stunned when the Company released its earnings report in October 2024. After implementing consistent portion sizes, Chipotle’s costs skyrocketed, causing revenues to go sour. When investors discovered the truth – that Chipotle couldn’t be profitable while also filling up customers’ plates – they dumped their shares, causing the stock price to plummet.
Shareholders are now joining the class action lawsuit.