CHIPOTLE Mexican Grill Inc (CMG.N) said a federal criminal probe linked to a food-safety incident at a California restaurant had widened into a national investigation, sending its shares down 8.6 per cent in extended trading on Tuesday.
The burrito chain also said sales at established restaurants plunged about 36 per cent in January, adding to a 14.6 per cent drop in the fourth quarter, its first ever decline in its 10-year existence as a public company.
Chipotle received a new subpoena at the end of January, seeking information related to company-wide food safety matters dating back to January 1, 2013 and superseding an earlier subpoena that was limited to just one restaurant in Simi Valley.
The company said it intended to fully co-operate in the investigation by the US Attorney’s office for the Central District of California.
More than 50 people across 14 US States were sickened in two E.coli outbreaks last year after eating at Chipotle’s outlets. Norovirus outbreaks were also reported in Massachusetts and California.
The outbreaks have driven away customers, wiped more than a quarter off the company’s stock price and resulted in the criminal probe and a shareholder lawsuit.
“The fourth quarter of 2015 was the most challenging period in Chipotle’s history,” Steve Ells, the company’s co-chief executive, said in a statement.
The US Centers for Disease Control and Prevention, however, said on Monday that the E.coli outbreaks linked to Chipotle appeared to be over.
The company’s net income plunged 44 per cent to $US67.9million ($F147m), or $2.17 per share, in the quarter ended December 31, but beat the average analyst estimate of $1.85 per share, according to Thomson Reuters I/B/E/S.
Revenue declined 6.8 per cent to $US997.5m ($F2billion), missing analysts’ expectations of $US1.01b ($F2b).
Chipotle’s shares, which surged to an all-time high of $US758.61 ($F1635) in August last year from an initial offering price of $US22 ($F47) in 2006, were trading at $US435 ($F937) after the bell.
