Chipotle Bounces Back After End-Of-Week Sell-Off
NEW YORK (AP) — Denver-based Chipotle rebounded from a heavy sell-off in shares to end last week after it was discovered that the E. coli outbreak connected to restaurant chain had spread from the Pacific Northwest to a number of other states.
In all, 45 people in six states have been affected, with 43 of those saying they ate at Chipotle the week before they became sick.
However, analysts who follow the restaurant chain say the damage to the company may be limited.
The equity research team at William Blair found that of the 800 people they surveyed earlier this month, nearly half were unaware of the E. coli outbreak linked to the restaurant. And the older the survey taker, the higher the rate of awareness, which is good news because Chipotle customers tend to skew under 45 years old.
Analyst Sharon Zackfia wrote that an outbreak of salmonella at 22 Chipotle restaurants in Minnesota "resulted in a double-digit drop in sales in the affected region for a few weeks before sales largely recovered."
The E. coli outbreak, however, has received much more attention, however, and the company closed 43 restaurants in Oregon and Washington in late October after health officials discovered most of the people sickened in the outbreak had eaten at its restaurants. Those restaurants have since reopened, but new cases were announced Friday in California, New York, Ohio, and Minnesota.
Shares of Chipotle Mexican Grill Inc. rose 4.5 percent to $560.48 in early trading Monday.
Shares fell 12 percent Friday and they were down sharply before the opening bell.
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