Chipotle Mexican Grill Inc. (NYSE: CMG) is still struggling with it food-safety issue, saying that its sales would continue fall in February and expect to report a loss for the first quarter.
The company said Tuesday that sales were down 26 percent in February, the third straight month decline. The company also expected a loss of $1 share “or worse” in the first quarter. This will mark the first quarterly loss for Chipotle since it went public in 2006.
The chain had previously expected the earning to be break-even for the first quarter and it reported an adjusted profit of $2.17 a share in the fourth quarter. The company said that the disappointing result is due to higher spending on marketing and food safety.
“Consumers still have a level of distrust or reluctance to embrace the brand,” Motley Fool analyst’s Asit Sharma said. “Chipotle is finding that it is indeed able to now move the needle on sales, but the marketing and promotion expense required to pull customers back in is higher than expected.”
The company reported another food-safely issue last week, saying four employees got sick in the restaurant in Billerica.
Chipotle shares fell 1.46 percent to $495.55 at 11:45 A.M. The company has been suffered from its food safety issue since last year. The stock had already dropped 25 percent in the past 12 months.
Chipotle named an executive director of food safety on Tuesday. The company is also revamping its food-safety protocols. The company hopes that these changes could help it recover from the food-safely crisis.