Chipotle recently closed 43 restaurants indefinitely in Washington state and Oregon amid an E.coli outbreak that was discovered. Sadly this is just adding to the company’s troubles. Experts say that Chipotle Mexican Grill could face and up hill battle in the coming months as the company deals with an E. coli outbreak.
The outbreak, could create distrust and frustration for many of their fans. Many consumers don’t understand the over abundance of caution that Chipotle is taking. They are simply trying to make sure that their fans are not exposed, even if the bacteria was not found in all stores. Basically they closed stores to be “better safe than sorry.”
Although Chipotle just days ago reported third-quarter earnings per share of $4.59, missing analysts’ expectations by 3 cents there could be trouble on the horizon. It should be noted that Chipotle’s same-store sales rose a better-than-expected 2.6 percent, but they were still sharply lower than 19.8 percent a year earlier. No one knows just how much of an impact the closing of these stores for now will affect earning overall and if there will be a trickle-down effect to other stores in the chain.
Shares of Chipotle were down 2½ percent in midday trading.
Did the closing of these stores as a precaution change the way you looked at investing in them? Was it a good move for them to do a blanket closing of stores?