Chipotle Mexican Grill Expects E. Coli Incident To Have Adverse Impact On Q4

(RTTNews) - Chipotle Mexican Grill, Inc. (CMG) disclosed in a regulatory filing Friday that the recent E. coli incident associated with its restaurants has had an adverse impact on financial and operating results thus far during the fourth quarter of 2015. Sales trends during the quarter so far have been extremely volatile, the company added.

For its fourth quarter, the company estimates earnings per share in the range of $2.45 to $2.85, while analysts polled by Thomson Reuters expect the company to earn $4.00 per share.

In addition, the company forecast its fourth quarter comparable restaurant sales to be in a range of negative 8% to negative 11%. For the full month of November, comparable restaurant sales were negative 16%.

When the company announced the closure of 43 restaurants on November 3, company-wide comparable restaurant sales dropped for the ensuing few days to approximately negative 20%. On November 20, 2015, the U.S. Centers for Disease Control and Prevention announced four additional cases linked to the same E. coli incident. The company noted that following this announcement and related negative publicity, daily comparable restaurant sales trended down to approximately negative 22%.

Meanwhile, the company expects no impact to anticipated new restaurant openings during the fourth quarter. Restaurant level operating margins for the quarter is estimated at 22% to 24%.

In light of recent sales trends and additional uncertainty related to the E. coli incident, The company said it cannot reasonably estimate 2016 comparable restaurant sales at this time.

Chipotle Mexican Grill also announced that its board has authorized additional repurchases of common stock, with a total aggregate purchase price of $300 million, exclusive of commissions.

CMG closed Friday's regular trading session down 0.73% at $561.20 and further declined 7 percent to $518.70 in the extended hours trading.