Chipotle slashes guidance on E. coli news; stock drops

Chipotle stock down after slashing guidance on E. coli news
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Chipotle Mexican Grill stock plummeted in premarket trade on Monday after the burrito chain issued a warning on Friday for the fourth quarter and said its sales have been hammered due to an E. coli outbreak.

Earlier on Friday, the CDC reported the E. coli outbreak linked to the restaurant has expanded into nine U.S. states.

Chipotle said it now expects sales at established restaurants to fall 8 to 11 percent this quarter. The company's shares were down more than 11 percent in premarket trade Monday.

During regular trading, the stock ticked slightly lower after the CDC said seven more ill people have been reported in the multistate outbreak of E. coli infections linked to Chipotle locations.

This means three more states (Illinois, Maryland and Pennsylvania) have now reported illnesses as part of the outbreak, bringing the total to nine states. The investigation has not determined what food is linked to the E. coli outbreak.

According to the CDC, most people infected with E. coli develop symptoms of the illness about three to four days after contact with the germ.

E. coli is among a vast array of bacteria that live in the human gut and generally cause no problems. But some strains can cause serious symptoms and even be life-threatening, and are spread by oral contact with fecal matter.

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"While these case are newly reported, they are not new. Exposure continues to be in the mid-October to early November time frame. They are just now making their way through the reporting process. I'd also note that the one case in Pennsylvania has no Chipotle exposure," wrote Chipotle spokesman Chris Arnold in an email.

Chipotle and other restaurants have put greater focus on fresh, unprocessed food. While that may be good for nutrition, experts say it raises the risk of foodborne illness because cooking kills pathogens that cause illness.

An estimated 48 million Americans get sick each year from foodborne diseases. Of these, 128,000 are hospitalized and 3,000 die each year, according to the CDC. Only about 40 percent of reported foodborne disease outbreaks from 2002 to 2011 were solved, according to the watchdog group Center for Science in the Public Interest.

— Reuters contributed to this report.

Correction: Chipotle cut its guidance for the fourth quarter. The time frame was misstated in an earlier version of this article.