The E. Coli outbreak at Chipotle is crashing sales and the company’s shares are following along.
Shares at Chipotle are down 7% in after-hours trading after the company announced 4th quarter sales are expected to fall by 8%.
The company noted in an SEC filing that sales have fluctuated a great deal along with developments in the E. coli outbreak — falling when stores closed, but rebounding when they reopen.
“Future sales trends may be significantly influenced by further developments, including potential additional announcements from federal and state health authorities,” Chipotle (CMG) said in the filing.
The CDC has reported more than 50 infections since the start of the E. Coli outbreak. Those affected live in
California, Minnesota, Ohio, New York, Oregon, Illinois, Pennsylvania, Maryland, and Washington.
Because of the outbreak the company is lowering its 2016 sales projection.
In addition, Chipotle said it expects to spend between $6 million and $8 million to replace food, send food samples for analysis, test restaurants and consult with advisers.
The company has not put a price on expected legal costs at this time.
“As a restaurant company, nothing is more important to us than serving our guests food that is delicious and safe to eat,” Chipotle said. “Since this incident began, we have significantly increased our efforts to ensure that our teams are adhering to all of our food safety protocols.”
The company is also spending money to create new procedures to avoid further E. Coli outbreaks.