UPDATE: 1:25 p.m. EST -- The Centers for Disease Control and Prevention declared on Monday that E. coli outbreaks in Chipotle Mexican Grill restaurants since October “appear to be over.”
Investors are betting the worst is over for Chipotle Mexican Grill. Stock in the Denver-based fast-casual Tex-Mex chain jumped 5 percent Monday morning after a report said government health authorities were poised to declare an end to an E. coli outbreak that sickened more than 50 customers in nine states since October.
A report Sunday in the Wall Street Journal said the Centers for Disease Control and Prevention (CDC) would as soon as Monday declare an end to the monthslong investigation, which means the CDC doesn’t foresee any further danger to public health. But the CDC is also expected to say it was unable to identify the source of the bacterial infestation, according to anonymous sources cited by the Journal.
Chipotle will release its fourth-quarter and full-year earnings results after markets close Tuesday. The company is expected to offer more details about what it has learned about the outbreak and what measures it will implement to avoid further food-safety issues.
The company has already announced new measures, including centralizing the washing and cutting of tomatoes and lettuce at central kitchens before distributing the ingredients to outlets. The company said it will close all stores on Feb. 8 for a national employee meeting to discuss new food-safety measures.
Analysts polled by Thomson Reuters expect Chipotle Mexican Grill to see profits slashed in half in the last three months of 2015 compared with the previous year, to about $61 million from about $122 million. Revenue for the quarter is expected to shrink to $1 billion from $1.1 billion.
Chipotle shares have fallen 35 percent since the first E. coli infection was discovered on Oct. 19. The company’s share price is down about 2 percent since the start of the year, as of late Monday morning. On Friday, shares were down about 6 percent for the year.