Its stock rallied following the CDC announcement. Shares could face more selling pressure in the near-term, though, thanks to fresh publicity woes.
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However, management should help stem the blow by continuing to publicly accept responsibility for all the recent outbreaks and offer full cooperation with authorities.
Chipotle is expected to review the new food safety procedures it’s adopted with employees.
The burrito chain also said sales at established restaurants plunged about 36 percent in January, following a 14.6 percent drop in the fourth quarter, the first decline in Chipotle’s 10-year existence as a public company.
Still, the quarter wasn’t a total disaster. Executives promised to overhaul the company’s food-safety standards and at an investor conference last month, Mark Crumpacker, chief creative and development officer, said people would get “a detailed story about what happened”.
And it still managed solid full-year performance, including gains of nearly 10% and 7% in revenue and net income to $4.5 billion and $476 million, respectively.
The outbreaks have driven away customers, wiped more than a quarter off the company’s stock price and resulted in a shareholder lawsuit. The current P/B amount of Chipotle Mexican Grill, Inc. best indicates the value approach in differentiating good from the bad. That bodes well for a fairly swift turnaround at Chipotle because the younger demographic accounts for the greatest share of foot traffic, and its spending power is on the rise.
It also calls for a few other changes, including washing and cutting tomatoes and romaine lettuce and shredding cheese in central kitchens instead of individual restaurants.
Jefferies has a Hold rating but lowered its price target to $390 from $420.
The spokesperson said Australia had no USA port of entry detections of bacterial contamination (E.coli), in about 491 million kilograms of beef exported in 2014 and 547 million kilograms of beef exported up until December 2015. What kinds of food are most likely to make you sick?
Although the CDC closed its investigation, the source of the illness that spread to 14 states is still unknown.
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For seven months, Chipotle faced foodborne illness investigations at restaurants all over the country, including ones in California, Minnesota, Oregon and Washington.
