Chipotle shares sink after it slashes guidance, discloses grand jury subpoena tied to CA norovirus incident

Chipotle Mexican Grill Inc. shares are down 3% in premarket trading after it said it expects a 14.6% decline in same-store sales for the fourth quarter. The company forecast a low-single digit same-store sales increase for 2015 during the third-quarter earnings announcement in October. The company forecasts earnings per share between $1.70 and $1.90 for the fourth quarter in an 8-K filing published Wednesday. The FactSet consensus is for EPS of $2.54. One-time expenses for the quarter will be in the $14 million to $16 million range, including expenses tied to food replacement in select restaurants, lab analysis, and retaining experts, all tied to E. coli and norovirus illness outbreaks in recent months. The company has authorized a stock buyback program totaling $300 million in addition to the $300 million authorized on Dec. 4. A total of $116 million remained available from that previous buyback program as of Dec. 31, 2015. Chipotle also said it received a federal grand jury subpoena requiring it to produce a range of documents tied to a norovirus incident in Simi Valley, CA in Aug. 2015. The company said it’s not yet possible to determine whether it will incur any fines or other liabilities tied to the subpoena. Chipotle stock is down 37% for the past three months while the S&P is up 1.9% for the same period.

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