UPDATE 3-Chipotle sales worse than expected in Feb, Q1 loss seen
(Adds analyst comment, details on margin)
By Lisa Baertlein and Yashaswini Swamynathan
March 15 (Reuters) - Chipotle Mexican Grill Inc's turnaround timeline appeared to lengthen on Tuesday after the burrito seller reported a steeper-than-expected slide in February sales at established restaurants and warned that it will post its first quarterly loss as a public company.
The news sent shares down 3 percent to $488 in extended trading.
Chipotle's February sales at restaurants open at least 13 months dropped 26.1 percent in February, more than the 23 percent fall expected by analysts polled by Consensus Metrix.
Those sales have been battered by a series of food safety lapses last year. They improved during February and the first week of March but decelerated again after Chipotle closed a Boston-area restaurant because of a norovirus scare. No customers were sickened, but the news fanned concerns about Chipotle nationally.
Its forecast for a first-quarter loss of $1 or more per share was fresh evidence of the difficulties the chain faces as it works to repair its reputation in the wake of Chipotle-linked E. coli, salmonella and norovirus outbreaks during 2015.
The formerly high-flying company's recovery "is going to be more drawn out than we expected," said Morningstar analyst RJ Hottovy. "They're finding it more costly to manage this situation than they anticipated."
Costs related to its food safety stumbles are hitting virtually every expense line at Chipotle, undercutting its well-known ability to hold down costs while cranking out higher sales. Continuación...