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Chipotle Vows To Become Industry Leader In Food Safety As E. Coli Outbreak Expands To Three More States, Stock Tumbles

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Despite the E. coli outbreak, Chipotle says it still served about one million customers each day without any new incidents. But with the emergence of more cases linked to the original outbreak, the fast food chain has to lower its financial forecast for 2016.

After the E. Coli outbreak acknowledgement last Nov. 4, Chipotle sales dropped around 20 percent as revealed in a financial update filed with the U.S. Securities and Exchange Commission.

While the company doesn't expect the outbreak to hurt locations opening in the fourth quarter of this year, it's still projecting about 8 to 11 percent decrease in sales.

"We are also rescinding our previously-announced 2016 outlook for comparable restaurant sales increases," Chipotle stated. "In light of recent sales trends and additional uncertainty related to the E. coli incident, we cannot reasonably estimate 2016 comparable restaurant sales at this time."

After the filing was reported on Friday and after trading had come to a close, Chipotle's stock fell about 8 percent. The dip might be attributed to the Centers for Disease Control and Prevention report of seven more cases linked to the outbreak and three new affected states.

The three states include Illinois, Maryland, and Pennsylvania. Each state reported one incident linked to a Chipotle location.

Only one person, whose illness started on Nov. 10, reported eating at Chipotle Mexican Grill within the week their symptoms began.

"The investigation is still ongoing to identify common meal items or ingredients causing illness," the CDC says. "Investigators are also using whole genome sequencing, an advanced laboratory technique, to get more information about the DNA fingerprint of the [Shiga toxin-producing E. coli O26] bacteria causing illness."

Chipotle has started to implement new "enhanced food safety program," wherein DNA tests are done on fresh produce before it's shipped to stores. It will also check products on its shelves, seek ways to improve the quality of its supply chain and improve employee training.

Chipotle food safety practices already fell well within industry norms, says Mansour Samadpour, chief executive officer of IEH Laboratories and Consulting Group, the organization that formulated the new food safety program.

"I am happy to report that our proposed program was adopted in its entirety, without any modification," says Samadpour. "While it is never possible to completely eliminate all risk, this program eliminates or mitigates risk to a level near zero, and will establish Chipotle as the industry leader in this area."

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