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Feds Enlarge Investigation of Chipotle's Tainted Food Crisis

Chipotle Mexican Grill revealed on Tuesday that federal prosecutors had expanded their inquiry into the company's multi-state outbreaks of food-borne illnesses, further threatening sales that declined steeply by the end of last year.

In a statement that accompanied its earnings report, the company said that the investigation, which had been focused on an outbreak of norovirus in just one Simi Valley, Calif., restaurant, had been broadened to a company-wide inquiry. It said it received another subpoena last week, seeking documents and information that covered all of the company’s food safety matters dating to the beginning of 2013.

That expanded timetable predates the company’s troubled summer and fall, when not just norovirus but E. coli episodes wreaked havoc with sales and traffic.

Sales in stores open at least a year, or same-store sales, sank 14.6 percent in the quarter that ended Dec. 31. Profits plunged 44 percent to $67.9m, or $2.17 a share, compared with $121.2m, or $3.91, in the same quarter last year, the company said.

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In a statement that accompanied its earnings report, the company said that the investigation, which had been focused on an outbreak of norovirus in just one Simi Valley, Calif., restaurant, had been broadened to a company-wide inquiry. It said it received another subpoena last week, seeking documents and information that covered all of the company’s food safety matters dating to the beginning of 2013.

That expanded timetable predates the company’s troubled summer and fall, when not just norovirus but E. coli episodes wreaked havoc with sales and traffic.

Sales in stores open at least a year, or same-store sales, sank 14.6 percent in the quarter that ended Dec. 31. Profits plunged 44 percent to $67.9m, or $2.17 a share, compared with $121.2m, or $3.91, in the same quarter last year, the company said.

Read Full Article