Chipotle Slides Further as CDC Links Salmonella to Jalapeños; Analyst Sees August Sales Hit
CMG sits 20% above its 52-week low of $28.035.
Summary
Chipotle shares fell another 3% Thursday, extending the week's sharp decline after the CDC officially linked a multistate Salmonella outbreak to jalapeños served at the chain. The outbreak has sickened 345 people across 27 states, with 36 hospitalized. While regulators say neither Chipotle nor QDOBA currently poses an ongoing risk, and the supplier has been switched, the reputational damage is the real threat. William Blair analyst Sharon Zackfia estimates same-store sales could see a mid- to high-single-digit decline in August before rebounding in September, drawing parallels to the 2015 E. coli crisis that caused a 13-percentage-point comp deterioration. This follows the initial outbreak reports on August 4 and the company's 8-K disclosure on August 5. The stock had already dropped nearly 10% on Tuesday when the possible connection first surfaced.
At the time of this announcement, CMG was trading at $33.72 on NYSE in the Trade & Services sector, with a market capitalization of approximately $42.7B. The 52-week trading range was $28.04 to $44.27. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Dow Jones Newswires.