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Don't expect Chipotle Mexican Grill to regain its former golden burrito status any time soon. Recovery could take as long as a decade, and its carefully cultivated "halo" may never return, experts told CNBC.
For months, Chipotle's stock and sales have been in a tailspin after a string of foodborne illnesses compounded fears of slowing growth at the former Wall Street darling last year.
On Wednesday, the chain warned investors that fallout from E. coli and norovirus foodborne incidents hammered its sales last quarter and said a grand jury has subpoenaed it in an investigation of a separate norovirus outbreak. Chipotle's stock closed down nearly 5 percent Wednesday. (Click here to track its stock.)
As the Mexican food chain attempts to turn around disappointing trends, can it ever fully recover? And if so, how long will it take?
'Halo' might be gone for good
"I'm not sure, quite frankly, they'll ever have the halo they did prior to the outbreak," said Bob Derrington, senior restaurant analyst at Telsey Advisory Group, in a phone interview.
In a incredibly competitive fast-food industry, Chipotle has tried to distinguish itself as selling "food with integrity" with high-quality ingredients and more cooking in-house. But following the outbreaks, it has shifted some of these cooking steps out of restaurants to heighten food safety, a move that is more in line with traditional fast food.
Despite wondering whether Chipotle's halo is lost forever, Derrington thinks the chain's average unit sales will recover eventually, though the timeline may stretch out to years.
Gene Grabowski, a partner at K Global and head of its crisis communications group, also said the chain could recover, but it's going to take time.
"It could take a decade before they're fully back," Grabowski said.
What Chipotle could expect ahead
Chipotle stock has plummeted 31 percent since it was first linked to a E. coli outbreak in the Pacific Northwest.
To forecast Chipotle's future, Credit Suisse analysts looked to the past and analyzed the aftermath of other prominent food crises at chains, including a E. coli outbreak at Jack in the Box in 1993, one at Taco Bell in 2006, two food safety events at Yum's China unit and one at McDonald's China.
The findings give hope to struggling Chipotle. Most brands made a "full recovery" despite sales that generally remained lower for four quarters after the incidents first came to light, analysts wrote in a note Tuesday.
Still, there is a key difference in Chipotle's situation from other food safety crises. Chipotle executives and health officials have yet to pinpoint the ingredient that caused its E. coli outbreaks. This adds another layer of uncertainty for the chain, and Credit Suisse said it makes the recovery process more different.
"In all of the five historical cases just mentioned, the cause of the food safety issue was determined relatively quickly. As such, if CMG were able to identify the source of the E coli outbreak, that could help sales recover more quickly than we have modeled," Credit Suisse wrote.
So just how bad are sales right now at the restaurant, which generated double-digit comparable sales as recently as last year?
In the fourth quarter, Chipotle said it anticipates comparable restaurant sales nosedived 14.6 percent, the chain said in a filing Wednesday. This metric dropped as much as 37 percent during the quarter.
In the filing, Chipotle said its board authorized a $300 million stock repurchase, its second for that amount since in early December.
It also announced that a federal grand jury in California has subpoenaed the chain, requiring it to produce documents related to an August outbreak of norovirus in Simi Valley, California.
"It is not possible at this time to determine whether we will incur, or to reasonably estimate the amount of, any fines, penalties or further liabilities in connection with the investigation pursuant to which the subpoena was issued," the filing said.
"As a matter of policy, we don't comment on pending legal actions, but will offer our full cooperation," said Chipotle spokesman Chris Arnold.