Food

Chipotle hits a 52-week low after a summer of jalapeño salmonella

A salmonella outbreak linked to jalapeños sickened 488 people and is now over. Chipotle’s stock fell to a 52-week low a week before earnings anyway.

Published

3 hours ago

October 22, 2026

Massih Shahbazi

Green jalapeño peppers in a metal bowl, in black and white, beside the headline The jalapeño hangover

Chipotle’s stock fell to a 52-week low this week, a week before it reports earnings. The outbreak that helped put it there is officially over. Its effect on the business might not be.

Chipotle shares fell 5.3% on Wednesday, Oct. 21, to close at $28.09, TokenPost reported. During the session the stock touched a 52-week low of about $28.03, according to Investing.com, which put the decline over the past year at about 30%. The company reports third-quarter results on Oct. 28.

I went back through the summer’s outbreak reports and the analyst notes. The burrito business is in a strange place: growing, popular, and suddenly priced like investors don’t trust it.

The outbreak

The Centers for Disease Control and Prevention’s final update on a Salmonella Javiana outbreak, dated Oct. 2, counted 488 illnesses in 34 states, with 65 hospitalizations and no deaths, according to the CDC. Illnesses began between June 16 and Aug. 26.

Investigators identified 36 illness clusters at 31 Chipotle Mexican Grill locations in seven states and five QDOBA locations in two states, the CDC said. Of the people interviewed, 91% reported eating at a Mexican-style restaurant. The likely source was jalapeño peppers grown in Sinaloa, Mexico, and distributed by Coast Citrus Distributors, which recalled them. The CDC has declared the outbreak over.

Chipotle removed jalapeños from its Minnesota restaurants and from locations in other states that got them from the same supplier, and switched to a different supplier, Food Safety News reported in August. In Minnesota alone, the state health department identified 110 outbreak patients, and 75 of the 84 it interviewed reported eating at Chipotle during the illness window, Food Safety News reported. Minnesota health officials said then that they weren’t concerned about further Chipotle-linked illnesses because the company cooperated fully and quickly removed the suspect item.

The memory problem

The company acted quickly, and the outbreak is over. But Chipotle carries history. The chain went through high-profile food safety scares in 2015, including an E. coli outbreak that Fortune covered as it spread across states, and any new outbreak with its name on it revives that memory for customers and investors alike.

Analysts are treating food safety as a real drag. A BofA analyst raised a comparable-sales estimate from flat to 1% for the quarter, citing heavier promotional activity that partly offsets food-safety pressure, according to Benzinga. TD Cowen downgraded the stock to Hold, citing concerns about October sales, and cut its price target to $32, Investing.com reported. Not everyone is bearish: UBS reiterated a Buy rating with a $45 price target despite the salmonella probe, and Raymond James kept an Outperform rating with a $42.50 target, according to the same report. Options trading implied a possible 6.7% move in either direction after earnings, Investing.com noted.

Where the business stands

The last reported quarter looked healthy. In the second quarter, Chipotle’s revenue rose 9.3% to $3.3 billion and comparable restaurant sales rose 2.2%, the company reported. Digital sales reached 38.3% of food and beverage revenue. Chipotle opened 100 company-owned restaurants in the quarter and expects 350 to 370 openings this year.

But margins were already under pressure. Restaurant-level operating margin fell to 25.2% from 27.4%, and food, beverage and packaging costs rose to 29.7% of revenue, from 28.9%, the company said. Earnings per share were flat at 32 cents.

Analysts polled by MarketBeat expect third-quarter earnings of about 29 cents a share on revenue of $3.28 billion, MarketBeat reported.

From the line at the counter

For customers, the practical news is reassuring: health officials say the outbreak is over, and the implicated peppers were pulled. For the 488 people who got sick, and the 65 who went to the hospital, it was a miserable summer.

For investors, the question next week is whether the outbreak kept people away in the third quarter and whether promotions brought them back. Heavier discounts can bring in traffic, but they cost margin, and margin was already slipping.

My read: the stock is pricing in a bad quarter before it has seen one. That could make next Wednesday a relief, or a confirmation.

What we don’t know

Chipotle hasn’t quantified the outbreak’s effect on sales. The company plans to give an update on fourth-quarter business to date on its Oct. 28 call, TokenPost reported, which may be the first real answer to whether customers have moved on. Results are due after the market closes, with the call at 4:30 p.m. Eastern.

The jalapeños are gone. The question is whether the doubt went with them.