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Chipotle just quantified the impact of its E.coli scares—and it’s not good

Reuters/Robert Galbraith
Tough time to be a Chipotle lover.
Alison Griswold
By Alison Griswold

Reporter

This article is more than 2 years old.

Chipotle warned in an SEC filing on Wednesday (Jan. 6) that its restaurant sales likely fell 14.6% in the fourth quarter. That’s several percentage points more than the 8% to 11% drop tied to a recent spate of E. coli scares which the company projected at the start of December.

The company also disclosed in its new SEC filing that it was subpoenaed by US District Court in California for a criminal investigation over a norovirus outbreak that occurred at a Chipotle restaurant in Simi Valley in August.

Chipotle says its fourth-quarter sales outlook worsened after a widely publicized norovirus outbreak sickened more than 140 Boston College students in the second week of December. That week, Chipotle says comparable restaurant sales dropped 34%. Later that month, the US Centers for Disease Control and Prevention also said it was investigating five new cases of E. coli linked to Chipotle’s restaurants. Shortly after this announcement, Chipotle says, “comparable restaurant sales trended down to -37%.” They declined 30% for the full month of December.

A 14.6% drop would be the first quarterly decline in comparable restaurants sales Chipotle has ever reported as a public company. The stock was down about 2% in early trading on Wednesday. Chipotle has lost nearly 30% of its value since health officials first began investigating E. coli cases tied to its restaurants at the end of October.

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