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Will Chipotle's Rebound Continue?

Will Chipotle's Rebound Continue?

After losing more than 30 percent over the past three months, shares of Chipotle Mexican Grill, Inc. (NYSE: CMG) gained nearly 10 percent this week as investors cheered the company's efforts to overcome recent health scares.

The company suffered two foodborne-disease outbreaks with E. coli and norovirus last year, both of which made customers wary and caused some to question whether the firm could shake off the damage to its reputation.

Related Link: Chipotle's Rally Continues

Nearing An End

According to Chipotle executives, the past year's issues are nearly behind them. At an investors conference on Wednesday, the company said no customers have reported illnesses linked to E. coli since November and that the Center for Disease Control and Prevention may soon call an end to the outbreak.

New Year, New Image

To cope with damage to the firm's reputation, the company is planning an extensive marketing campaign due to begin next month. Most are expecting the campaign to center on the brand's promises to make the chain the safest place to eat.

Chipotle has already begun training staff on new food-safety measures, and the company says the majority of overhauls have already been implemented.

Is It Really Over?

While investors cheered Chipotle's upbeat tone on Wednesday, the CDC was less optimistic. CDC Response Team Leader Matthew Wise said that although it was true it has been more than a month since any reports of illness have come in, calling an end to the outbreak could still be a ways away.

The center has been unable to determine the source of the outbreak, making it more difficult to close the case. At the moment, the CDC says it believes the E. coli outbreak was linked to produce, but that meat hasn't been ruled out. Initially, Chipotle said it wouldn't roll out its new marketing campaign until the CDC ended the outbreak; however, it appears the firm is planning to go ahead with its damage control in February whether or not the CDC is ready.

Image Credit: By ReubenGBrewer (Own work) [CC BY-SA 3.0], via Wikimedia Commons


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