Chipotle shares have dropped down even further than expected after the E. coli outbreak recently associated with its food. The shares are currently down 3.5% at $543.31, their all time low being $515.00.
The Mexican Grill Erases 2016 Outlook for Comparable sales
Business has been extremely sensitive for the company since the outbreak, and it has declared in its securities filing that it is impossible to draw an accurate sales outlook. They even posed forth-quarter earnings at half of what analysts expected, at $2.45-$2.85 per share.
Chipotle is currently hiking up measures to increase food safety. This is both to handle the current situation. All of their fresh produce will be tested extensively before consumption, and the company will be enhancing employee training to optimize customer service and cleanliness.
Seven More Cases of E. coli Infections Have Been Linked to Chipotle
The CDC has linked more cases of E. coli to Chipotle, in Illinois, Ohio, Maryland and Pennsylvania. There should be an ingredient in common that all these people have, which would be the source of the problem, but the company hasn’t yet identified it. Since no causes for these infections have been identified, analysts are expecting shares for the company to get lower and lower. Barclays even lowered their share price target by 18% to $540.00.
Chipotle has many things to explain before the storm clears. Once the source of the E. coli outbreak is found, the company can start to make amends. It’s already hired firms to ensure food safety, and it has expressed intentions to change suppliers. All produce served at Chipotle will go through extra safety checks to make sure that this instance is not repeated. However, it’s safe to assume that the next year will be a dark one for Chipotle in terms of stocks, unless something miraculous happens that restores customer faith in the restaurant chain.
