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Chipotle considers more free burritos as sales continue slide

Workers prepare food at a Chipotle store on March 10 in Billerica, Mass., before reopening. The store was closed for a day amid concerns that some employees had contracted the norovirus.

Associated Press

Workers prepare food at a Chipotle store on March 10 in Billerica, Mass., before reopening. The store was closed for a day amid concerns that some employees had contracted the norovirus.

Chipotle said Wednesday that it is considering ramping up offers for free burritos as its sales are slow to recover after a rash of food-safety outbreaks.

Speaking at an investor conference, executives said they may increase the number of free burritos or "buy one, get one free" promotions they offer, as they forecast the company's first-ever quarterly loss. Chipotle said late Tuesday it expects to report a first-quarter loss, as poor sales are compounded by higher costs for food-safety procedures and marketing. Sales declines at established restaurants last month averaged 26.1 percent.

At least two analysts significantly cut their earnings expectations after the report. Nomura analyst Mark Kalinowski cut his forecast for this year and next by nearly half, as did Oppenheimer analyst Brian Bittner.

"We continue to sit on the sidelines until visibility into sales/profit recovery improves," Bittner wrote.

The Wall Street Journal also reported late Tuesday that Chipotle is considering rolling back some of the extra food-safety procedures that it promoted earlier this year, including high-resolution DNA-based testing of some ingredients. It wasn't clear whether the changes will scale back or cut the procedure altogether, the newspaper said, citing anonymous sources.

"Any changes we may make to our initial plans will be to strengthen what we are doing," said Chris Arnold, a Chipotle spokesman.

Chipotle considers more free burritos as sales continue slide 03/16/16 [Last modified: Wednesday, March 16, 2016 7:38pm]
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