Chipotle Mexican Grill received a subpoena expanding the scope of a federal criminal probe into a norovirus outbreak in California, renewing concerns that its food-safety crisis isn’t over.
The subpoena was served Thursday by the U.S. attorney’s office, the Denver-based company said in a statement Tuesday. It requires Chipotle to produce documents dating back to Jan. 1, 2013, deepening an investigation that the company announced in January. The burrito chain, which said it doesn’t yet know much about the investigation, also gave a dim view of 2016 in its latest earnings report, saying it would be a “very difficult year.”
Chipotle also said earnings will be around the break-even point in the first quarter. Analysts had previously estimated $1.95 a share, according to data compiled by Bloomberg. The forecast sent the shares down as much as 8.6 percent to $435 in late trading.
The bleak outlook stoked fears that the company won’t bounce back as quickly as hoped from a series of foodborne- illness outbreaks. Chipotle’s troubles have mounted since the U.S. Centers for Disease Control and Prevention said in November that it was investigating an E. coli incident linked to the chain. That brought attention to previous cases of Chipotle customers getting sick, including customers at the California restaurant under review by federal investigators. The crisis wiped $10 billion in market value from Chipotle and raised questions about its food-handling protocols.
“The company is going to have to incur greater marketing costs to win back customers,” said Asit Sharma, an analyst at the Motley Fool. “And this might be counterproductive while a broader-scale investigation takes place.”
