Chipotle drops 5% as second E. coli outbreak eyed
Chipotle's stock took a beating again Tuesday in the wake of news that the restaurant chain has been linked to a second outbreak of E. coli, just weeks after dozens of its diners reported becoming sickened by a rare strain of the bacteria.
CMG shares ended down almost $27.40, or 5.3% drop to about $494.61 Tuesday following a $19 drop on Monday.
The Centers for Disease Control said Monday that it was looking into an outbreak of a different DNA fingerprint of Shiga toxin-producing E. coli that had sickened five people in North Dakota, Kansas and Oklahoma between Nov. 18 and Nov. 26th. In each case, the person had eaten at a Chipotle in the week before they got ill.
The restaurant chain's reputation had already suffered in recent weeks after 46 of 53 people sickened during an earlier E. Coli outbreak reported to have eaten at a Chipotle restaurant in the days before. Earlier this month the company was also rocked when at least 120 Boston College students and others got sick after eating at Chipotle though those incidents were likely connected to norovirus and not E. coli, according to the company.
In a statement, Chipotle spokesman Chris Arnold said "We have indicated before that we expected that we may see additional cases stemming from this, and CDC is now reporting some additional cases. Since this issue began, we have completed a comprehensive reassessment of our food safety programs with an eye to finding best practices for each of the ingredients we use. We are now in the process of implementing those programs, including high resolution testing of ingredients, end of shelf-life testing of ingredients, continuous improvement in the supply system based on testing data, and enhanced food safety training for all of our restaurant teams. With all of these programs in place, we are confident that we can achieve a level of food safety risk that is near zero.''
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Investors, however, did not seem reassured. The Mexican-food chain had been one of the most coveted stocks over the last three years, but after questions around food safety arose, shares plummeted 29% in the second week of December from their higher point over the past year. The stock closed Monday down 3.5% to $522.01.
Researchers aren't certain if this latest spate of illnesses was related to the previous, more far-reaching outbreak that stretched across nine states but was largely concentrated in Oregon and Washington. Among those earlier incidents, the most recent case linked to Chipotle involved an individual who became sick on Nov. 10.
Another person, in Pennsylvania, also reportedly became ill during that earlier outbreak on Nov. 14, 2015, But that individual had not eaten at a Chipotle.
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