Chipotle shares drop sharply on news US health investigation expanding

Received subpoenas related to food-borne illnesses

By Danielle Wiener-Bronner, CNN Business
Scott Olson/Getty Images

(CNN) - Chipotle hasn't put its past health problems behind it.

The company revealed in an SEC filing on Thursday that it received a new subpoena from US federal prosecutors on April 18 requesting information related to illnesses traced back to restaurants in Simi Valley, California; Sterling, Virginia; Boston and Los Angeles. Information regarding those restaurants was covered in previous subpoenas, the company said, but added that the recent request also called for information about an additional restaurant in Powell, Ohio. Customers got sick after eating at a Chipotle restaurant in Powell in July 2018.

Shares of the company dropped about 5% Thursday.

"It is not possible at this time to determine whether we will incur, or to reasonably estimate the amount of, any fines or penalties in connection with the investigation pursuant to which the subpoenas were issued," Chipotle said in the filing.

"Food safety is our number one priority at Chipotle," the company said in a statement provided to CNN Business. "We have been cooperating and meeting with the government over the last several years and have been providing them with information regarding our food safety standards, which we believe leads the food service industry."

Chipotle added that "the subpoena that we received is part of the government's on-going investigation and we are continuing to cooperate fully."

In late 2015 and early 2016, an E. Coli outbreak at Chipotle stores sickened customers. They remained wary of the chain for years after, dragging down profits and spooking investors. The cause of the outbreak is still unknown. And the company also struggled to contain several norovirus incidents in its restaurants over the past few years.

But recently, Chipotle has been able to pull itself out of the slump. Under the helm of CEO Brian Niccol, who took over last year, sales are growing. The company shared on Wednesday that in the first quarter, revenue grew 13.9% to $1.3 billion and sales at restaurants open at least a year jumped 9.9%.

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