Chipotle Mexican Grill, Inc. (NASDAQ: CMG)
Chipotle Mexican Grill, Inc., a company that develops and operates Mexican restaurants yesterday had reports of a new outbreak of a different strain of E.coli. This news hit late afternoon on Monday and the stock quickly dropped to 52 week lows of $508.10, a 6% drop in price on heavy volume. This has been a rough couple of months for Chipotle as this news follows an earlier outbreak of E.coli that spread over nine states back on October 31. Following that first outbreak there was a norovirus contagion scare at a Boston location only a few weeks ago that left more than 140 students sick. The new outbreak reports 5 people sick across 3 states that have all claimed to have eaten at Chipotle a week before they got sick. The outbreaks and reported sickness cases have crushed Chipotle’s stock price over the past few months. Only 2 months ago on October 13th CMG stock traded at $757, with today’s lows of $508.10, that is a 33% drop in price. The company’s reputation is at stake and the upcoming year could be very painful for CMG shareholders especially if any new outbreaks were to be announced.
Chipotle Mexican Grill, Inc. Spokesman’s Comments
“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,” Chris Arnold, a Chipotle spokesman, said today in an e-mailed statement. “We are now in the process of implementing those programs.” Bloomberg
Chipotle Mexican Grill, Inc. (Chipotle), incorporated on January 30, 1998, develops and operates Chipotle Mexican Grill restaurants. The Chipotle Mexican Grill restaurants serve a focused menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. As of December 31, 2014, the Company operated 1,755 Chipotle restaurants throughout the United States, as well as seven in Canada, six in England, three in France, and one in Germany. The Company’s restaurants also include nine ShopHouse Southeast Asian Kitchen restaurants, serving Asian-inspired cuisine. As of December 31, 2014, the Company also owned and operated two Pizzeria Locale restaurants, a fast casual pizza concept, resulting in a total of 1,783 restaurants. The Company sells gift cards which do not have an expiration date.
The Company categorizes its restaurants as either end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other. Of its restaurants in operation as of December 31, 2014, it had 1,081 end-cap locations, 283 in-line locations, 315 free-standing units, and 104 other. The average restaurant size is about 2,550 square feet and seats approximately 58 people. The Company’s restaurants also feature outdoor patio space. The Company’s restaurants accept orders by fax, online or through an iPhone or Android ordering application.
The Company also provides a variety of extras, such as guacamole, salsas and tortilla chips seasoned with fresh lime juice and kosher salt. In addition to sodas, fruit drinks and organic milk, the Company’s restaurants also offer a selection of beer and margaritas. The Company uses ingredients, which include chicken, and steak that is marinated and grilled in its restaurants, carnitas (seasoned and braised pork), barbacoa (spicy shredded beef) and vegetarian pinto and black beans. The Company adds its rice, which is tossed with lime juice and freshly chopped cilantro, as well as freshly shredded cheese, sour cream, lettuce, peppers and onions, depending on each customer’s request. It also uses various herbs, spices and seasonings to prepare its meats and vegetables. The Company’s restaurants serve only meats that were raised without the use of non-therapeutic antibiotics or added hormones, which are branded as Responsibly Raised. Reuters