Hit by E. coli Outbreak, Chipotle Mexican Grill’s Shares Drop 8%
Chipotle Mexican Grill Inc on Friday said in a statement that its sales have been largely impacted due to E. coli outbreak that sickened dozens of people across the United States. Stock of the company dropped 8% in after-hour trading on Friday.
According to the company, its shares dropped nearly 8% to $518 in extended trading after the popular burrito chain warned that its sales might drop eight to 11% for the fourth quarter from a year earlier.
This is a huge and the very first such decline in the company’s history. Investigators said that the outbreak of the infectious disease could even widen.
Chipotle said further widening of the E. coli outbreak and potential additional announcements from federal and state health authorities will have huge impact on its sales.
The US Centers for Disease Control and Prevention (CDC) reported related E. coli 26 illness in three new US states. Forty-seven out of 52 people who got infected with the disease said they ate at Chipotle before the symptoms showed up.
The additional places where cases of infection were reported include Illinois, Maryland and Pennsylvania. Some states already included in the list released by government investors included California, Minnesota, New York, Ohio, Oregon and Washington where cases of infection from E. coli showed up.
Chipotle said it has been tightening its food safety procedures. So far the sources of this widening E. coli outbreak have been unknown. Investigators suspect a fresh produce item that was shipped from one location to multiple restaurants.