Chipotle Warns of Sales Slide as E. Coli Outbreak Expands

Chipotle Warns of Sales Slide as E. Coli Outbreak Expands
A Chipotle Mexican Grill in Robinson Township, Pa., on Jan. 28, 2014. Chipotle says it is tightening its food safety standards after its restaurants were linked to dozens of cases of E. coli. The Mexican food chain says it hired IEH Laboratories in Seattle to help improve its system after reports in late October 2015 that linked E. coli cases to its restaurants in Oregon and Washington. Since then, additional cases have been reported in California, Minnesota New York, and Ohio. AP Photo/Gene J. Puskar
The Associated Press
Updated:

NEW YORK—Chipotle said Friday that an outbreak of E. coli linked to its restaurants sent sales plummeting by as much as 22 percent in recent weeks and that it could no longer reasonably estimate sales for next year.

The Denver-based chain said in a regulatory filing that sales trends have been “extremely volatile” since it closed restaurants in Oregon and Washington in early November as a result of the outbreak.

For the final three months of the year, it said it expects sales to be down between 8 to 11 percent at established locations if trends continue. Earnings are also expected to fall to between $2.45 and $2.85 per share for the quarter. That’s down from last year’s $3.84 per share.

Chipotle’s stock slid more than 7 percent in after-market trading. Its shares have dropped 25 percent since mid-October.

Before rescinding its outlook Friday, the company had expected sales for 2016 to rise in the low-single digit percentages.