“We don’t have a good example of something like this (the frequency and duration of food issues experienced by Chipotle) … and (don’t know) how long it takes to rebuild,”
That’s what I told Matt Krantz of USA Today when he asked when folks would start to trust Chipotle again, and when investors might expect to see profits go up.
I don’t know much about profits, but I did tell him about stigma and how hard it is to shake it. Jack-in-the-Box, over two decades later is still identified with the E. coli outbreak that started them all.
The burrito chain late Tuesday told investors it could lose up to $1 a share “or worse” in the first quarter as the company continues to suffer from a spate of food-safety outbreaks. That’s a big disappointment for investors who expected the company to report an adjusted profit per share of 4 cents a share, according to S&P Global Market Intelligence. Chipotle reported an adjusted profit of $2.17 a share in the fourth quarter of 2015.
A variety of factors are hurting Chipotle’s bottom line. Chipotle faces higher costs during the quarter to increase marketing and promotions – not to mention costs associated with improving its processes to try to prevent future outbreaks. “We also anticipate higher food costs due to additional food safety protocols put into place,” the company said in a statement.