Chipotle Mexican Grill on Wednesday morning said it has been served with a grand jury subpoena from a federal court in California as part of a criminal investigation related to a norovirus outbreak at a restaurant in Simi Valley, Calif.
Meanwhile, the beleaguered burrito chain said that its same-store sales plunged 30 percent in December amid continuing news of an E. coli outbreak in several states as well as a norovirus outbreak at a restaurant in Brighton, Mass., in early December.
For the full quarter, the Denver-based chain said that its same-store sales fell 14.6 percent and that the outbreaks cost the chain $14 million to $16 million in non-recurring expenses.
The California norovirus outbreak sickened 80 customers and 18 employees in August, and was the start of a brutal four months for the fast-casual chain. The chain struggled through outbreaks of salmonella and E. coli in several states as well as the two norovirus incidents.
The U.S. Attorney’s Office for the Central District of California is investigating the outbreak along with the U.S. Food and Drug Administration’s Office of Criminal Investigations.
The subpoena requires Chipotle to produce a “broad range of documents” related to the Simi Valley location. “We intend to fully cooperate in the investigation,” Chipotle said in a federal securities filing.
The foodborne illness outbreaks have hit the company’s stock price hard in recent months. The stock entered today down 41 percent from its 52-week high and fell further in morning trading, establishing a new, 52-week low at one point.
The company took out full-page ads in newspapers around the country apologizing for the incidents and also introduced new cooking techniques and operational changes designed to prevent such problems in the future.
Chipotle said Wednesday that its board has authorized a $300 million share repurchase program. Companies often buy back shares to shore up their stock price, particularly during difficult periods when that price needs a boost.
Update: Jan. 6, 2016 This story has been updated with new information about the investigation.
Contact Jonathan Maze at [email protected]
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