Chipotle Posts First-Ever Sales Decline
February 02 2016 - 5:30PM
Dow Jones News
Chipotle Mexican Grill Inc. on Tuesday reported a decline in
quarterly revenue for the first time in its history as a public
company, as a string of illness outbreaks linked to its restaurants
contributed to a 44% drop in fourth-quarter profit.
Chipotle also said it was served with a subpoena on Jan. 28,
widening the scope of a federal probe into an outbreak of foodborne
disease disclosed in January. The new subpoena requires Chipotle to
produce documents related to company wide food safety dating back
to January 2013. An earlier subpoena served in December only
covered a Chipotle restaurant in Simi Valley, Calif.
The news comes a day after the U.S. Centers for Disease Control
and Prevention said that two E. coli outbreaks that sickened 60
customers appeared to be over. Federal investigators said they
couldn't identify a contaminated food or ingredient responsible for
the illnesses, which occurred late last year in 14 states.
Sales at Chipotle restaurants and the company's stock price have
been sliding since the first E. coli cases appeared in late
October. The company, long known for the freshness and quality of
its ingredients, also has been hobbled by salmonella cases in
Minnesota in August that sickened 64, and outbreaks of norovirus
linked to Chipotles in California and Boston that affected
hundreds.
Steve Ells, the company's co-chief executive, described the
fourth quarter as "the most challenging period in Chipotle's
history."
Chipotle said revenue fell 6.8% to $997.5 million, narrowly
missing the $1 billion analysts polled by Thomson Reuters had
forecast. It is the company's first decline in quarterly sales
since going public in 2006—it had seen double-digit overall sales
growth in every quarter from its IPO until the latest quarter,
according to FactSet data.
Chipotle reported a profit of $67.9 million, or $2.17 a share,
down from $121.2 million, or $3.84 a share, a year earlier.
Earlier this month, Chipotle said it was expecting $1.70 to
$1.90 a share in earnings, well below the $2.45 to $2.85 a share it
had forecast in early December.
Same-restaurant sales, a key metric that excludes newly opened
or closed restaurants, fell 14.6%.
Shares, down 0.5% after hours to $473.40, have declined 24% in
the past three months.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
February 02, 2016 17:15 ET (22:15 GMT)
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