Chipotle's 'Food Poisoning' Earnings Are as Depressing as Expected

No big surprises here, just lots of bad news.

After years of setting a new standard for fast casual dining, Chipotle Mexican Grill has fallen on hard times. The billion dollar burrito chain's nearly year-long struggle with multiple E. coli and Norovirus outbreaks in 2014 and 2015 have led to the lowest stock prices the chain has seen in several years. Today, Chipotle released its much anticipated quarterly earnings, and as expected, the results are grim. Now that Chipotle's health scare is over — at least according to the CDC — the real work begins.

Chipotle posted the first drop in sales in its decade as a publicly traded company, falling 14.6 percent, as expected. And though the company opened 79 new restaurants in the last quarter of 2015, Chipotle, according to nearly every other metric had a rough go of it. Net income decreased 44 percent from the previous quarter to $67.9 million; revenue decreased 6.8 percent to $997.5 million.

Also as expected, the full year's results were not as robust as they have been in previous years. Still, Chipotle posted a profit in 2015. Net income rose 6.8 percent to $475.6 million while revenue rose 9.6 percent to $4.5 billion. Likely due to the increased media attention on the health scares in the latter half of 2015, same store sales over the year rose slightly by .2 percent over the whole year. Chipotle opened a total of 229 new locations in the past 12 months, compared to 192 in 2014.

As a point of comparison, in 2014, Chipotle posted an increase in net income of 36 percent and a revenue increase of 27.8 percent. Same store sales in 2014 were up by 16.8 percent. Chipotle's stock closed down today, though is trading up after hours. The price remains below 500.

Perhaps the biggest news from Chipotle's most recent earnings release is that the company is facing some harsh music from the feds. Earlier this month the burrito giant was served a federal subpoena for allegedly attempting to hide the extent of its first Norovirus outbreak in California. The feds are now widening the scope of their investigation: "On January 28, 2016, Chipotle was served with a subpoena broadening the scope of the previously-announced criminal investigation by the U.S. Attorney's office for the Central District of California. The new subpoena requires us to produce documents and information related to company-wide food safety matters dating back to January 1, 2013, and supersedes the subpoena served in December 2015 that was limited to a single Chipotle restaurant in Simi Valley, California. We intend to fully cooperate in the investigation." This investigation is separate from the criminal and class action lawsuits Chipotle faces in Washington, Boston, and New York.

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