Chipotle Says California Probe Widens Into National Investigation

Chipotle Mexican Grill Inc said a federal criminal probe linked to a food-safety incident at a California restaurant had widened into a national investigation, sending its shares down 8.6 percent in extended trading on Tuesday.

The burrito chain also said sales at established restaurants plunged about 36 percent in January, adding to a 14.6 percent drop in the fourth quarter, its first ever decline in its 10-year existence as a public company.

Chipotle received a new subpoena at the end of January, seeking information related to company-wide food safety matters dating back to Jan. 1, 2013 and superseding an earlier subpoena that was limited to just one restaurant in Simi Valley.

The company said it intended to fully cooperate in the investigation by the U.S. Attorney's office for the Central District of California.

More than 50 people across 14 U.S. states were sickened in two E.coli outbreaks last year after eating at Chipotle's outlets. Norovirus outbreaks were also reported in Massachusetts and California.

The outbreaks have driven away customers, wiped more than a quarter off the company's stock price and resulted in the criminal probe and a shareholder lawsuit.

"The fourth quarter of 2015 was the most challenging period in Chipotle's history," Steve Ells, the company's co-chief executive, said in a statement.

The U.S. Centers for Disease Control and Prevention, however, said on Monday that the E.coli outbreaks linked to Chipotle appeared to be over.

The company's net income plunged 44 percent to $67.9 million, or $2.17 per share, in the quarter ended Dec. 31, but beat the average analyst estimate of $1.85 per share, according to Thomson Reuters I/B/E/S.

Revenue declined 6.8 percent to $997.5 million, missing analysts' expectations of $1.01 billion.

Chipotle's shares, which surged to an all-time high of $758.61 in August last year from an initial offering price of $22 in 2006, were trading at $435 after the bell.

(Reporting by Subrat Patnaik and Siddharth Cavale in Bengaluru; Editing by Kirti Pandey)