Chipotle Mexican Grill on Tuesday said the $1 billion in value the chain lost over five days was caused by a single employee coming to work sick.
The sniffly staffer spread the norovirus around a suburban Washington DC, store, sickening more than 130 customers.
The headlines about the outbreak sent Chopotle’s shares on a five-day slide — cutting more than $1 billion off the Denver company’s market cap.
“We conducted a thorough investigation and it revealed that our leadership didn’t follow our protocols,” said Chipotle founder and Chief Executive Steve Ells during a second-quarter earnings conference call on Tuesday.
“We believe someone was working while sick,” Ells said.
Roundly criticized last week for not immediately apologizing for the incident and focusing instead on reassuring customers that Chipotle restaurants were safe to eat at, Ells on the call delivered a measured mea culpa, emphasizing that the lapse was “a failure in one restaurant.”
Last week’s devastating norovirus news was supercharged when a video of rodents scurrying around a Dallas Chipotle went viral.
The five-day slide put a damper on an otherwise strong quarter.
Chipotle beat Wall Street’s earnings expectations in the period but delivered lower-than-expected sales — despite a big investment in new marketing efforts, including national television adds.
Earnings rose to $2.32 a share; analysts were forecasting $2.18.
Revenue rose 17.1 percent, to $1.17 billion, powered by an 8.1 percent rise in same-store sales.
The burrito chain’s shares ended the five-day slide on Tuesday, rising 2.5 percent, to $348.62. Shares rose another 1.6 percent in after-hours trading.
Chipotle brass said it’s too soon to know the full impact of last week’s double whammy, but its still moving ahead with plans to raise prices across the 2,300 restaurant chain and has started to do so in 500 of its restaurants.
“We have met with little resistance to the increases,” said Chief Financial Officer John Hartung, who expects to jack up menu prices by the fall.
Hartung said that in the wake of the norovirus outbreak, same-store sales at the 30 to 40 stores in the vicinity of the Sterling, Va., restaurant were off.
Management is hoping to pivot with news of a new menu item it’s testing — a Queso dip — and its first ever pick-up window that will open at a Ohio restaurant this fall.