The shares of Chipotle Mexican Grill are trading lower as the company continues to face problems related to the E.coli outbreak that sickened dozens of customers.
The stock price of Chipotle Mexican Grill was down nearly 2% to $541.18 per share at the time of this writing around 11:53 AM in New York on Tuesday. Over the past three months, the company lost 26% of stock value.
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Chipotle E.coli problems
Last month, eleven restaurants of Chipotle Mexican Grill in Oregon and Washington states were linked to at least 37 confirmed E.coli cases. The incident prompted the company to close 43 restaurants in both states immediately and took steps to help state and federal food safety officials investigate the matter. The company also hired food safety consulting firms to improve its already high standards for food safety.
Yesterday, Chipotle Mexican Grill closed a restaurant in Boston after more than two dozen students complained of suffering “gastrointestinal symptoms.”
In an e-mail sent to Bloomberg, the company’s spokesman, Chris Arnold, said, “Our restaurant at Cleveland Circle in Boston is temporarily closed while we work with local health officials to investigate a number of illnesses among Boston College students. There are no confirmed cases of E. coli connected to Chipotle in Massachusetts.”
He added that local health officials “seem to be leaning” toward the fact that a norovirus was the cause of the gastrointestinal symptoms and not E.coli. Arnold said, “It seems consistent with the pattern here.”
Chipotle same-store sales decline
On Friday, the company revealed that its same-store sales declined 16% in November since the E.coli outbreak. Its fourth-quarter sales are expected to drop as much as 11%.
CNBC’s Jim Cramer commented, “I think Chipotle will ultimately solve this problem, but when they do, you will still have to wait a couple of quarter to see a real turn…” For him, investing in the stock is risky because of its declining same-store sales, and the stock is just too expensive. He said, “It is not too appetizing right now.”
Chipotle is committed to becoming an industry leader in food safety
The incident in Boston renewed fears among consumers regarding the possibility that they could suffer from food poisoning if they would eat at a Chipotle Mexican Grill restaurant.
Earlier this month, the company issued a statement indicating its commitment to become an industry leader in food safety by taking aggressive actions to implement industry-leading food safety and food handling practices in all of its restaurants.