Chipotel Mexican Grill Sales Continue to Suffer After the E. Coli Outbreak

Chipotle Mexican Grill says that its sale plunged by 26 percent for February. It is also expecting a loss on the first quarter as it is recovering from a series of food scares, which is going to be their first quarterly loss after it went public in 2006.

The company had expected "break even" on its per-share result after spending for promotions, marketing and tightened food safety to get their customer back. Its 36 percent decline for January was followed by drop in sales at established locations last month, CBS News reported.

Sales at the stores that are open for at least 13 months play an important role in gauging the company's financial health because it neutralizes the volatility of newly opened and closed location.

The Chipotle Mexican Grill in currently bouncing back after the incident of E. coli outbreak and other issued that sent their sales down last October. The company said that they have taken steps since then to ensure that their food is safe. They are now working on promoting their burritos and bowls which made their restaurant well-known to get their customer back.

According to Examiner Gazette, Chipotle is now offering free food to get more traffics and sales after the two E. coli outbreaks that are associated with its restaurants and affected 50 people in 14 states. They are also considering offering more free burritos to recover on their slow sales after the food-safety outbreaks. The recovery "continued into March" with same-store sales that only fell by 21.5 percent for the week that ended March 7.

However, a Boston restaurant was temporarily closed following an incident report that its workers got sick. It worsened their second week of March and plunged by 27 percent.

"They're giving away so many free burritos that they're losing money," said Howard Penney, who covers Chipotle for Hedgeye Risk Management.