Last month, in the wake of an E. coli outbreak linked to Chipotle restaurants around the country, the popular fast food chain warned that its business would suffer. But it didn’t expect to bleed this much.

On Tuesday, the company announced that its previous gloomy estimate wasn’t gloomy enough. Chipotle had expected comparable restaurant sales (those at restaurants open for at least 13 months) to fall by as much as 11 percent for the quarter ending Dec. 31. They are now expected to tumble by almost 15 percent. In December alone the metric fell by 30 percent.

After years of steady growth and with a seemingly flawless business, the past few months have been a trying time for Chipotle, and the months ahead may also be a struggle. Reuters

The company also revealed that it had been served with a grand jury subpoena in December. The subpoena is tied to a norovirus outbreak in August at a restaurant in Simi Valley, Calif., and is connected to an investigation by both the Food and Drug Administration and the U.S. Attorney’s Office in California. Chipotle said it’s cooperating with the investigation, which requires the company to divulge information and documents about the restaurant linked to the incident.

The past few months have been a trying time for Chipotle. After years of sustained growth and with a seemingly flawless business, America’s darling fast food company has fallen on hard times.

The crisis began last fall when Chipotle closed 43 restaurants in Washington state and Oregon after health authorities linked an E. coli outbreak to six restaurants in the region. Illnesses contracted at Chipotles were then reported in seven more states, including Illinois, Pennsylvania and Maryland.

Then in December, at least 80 students at Boston College fell ill after eating at a Chipotle, leading the company to close another restaurant. Boston health officials said the cause was norovirus, a common virus, and cited the restaurant for two health violations: improper handling of poultry and the presence of a sick employee. Also, the CDC announced it was investigating another E. coli outbreak that could be linked to the chain.

Falling comparable sales mean fewer people are visiting the Mexican-inspired chain for lunch and dinner, a stark reality given how flowery Chipotle’s past earnings have been.

The drop suggests that what people had observed anecdotally – restaurants where patrons used to line up were suddenly empty – is likely happening nationwide. And it bodes poorly for the months and quarters to come. Taco Bell, the last major fast food company to face an E. coli outbreak, suffered mightily in the aftermath of a 2006 scare, enduring five straight quarters of negative sales growth.

The seemingly endless string of sour news is taking its toll. Wednesday morning, shares of Chipotle were down more than 1 percent, after tumbling by nearly 40 percent over the past three months. And the company seems reluctant to talk optimistically about a short-term rebound. Chipotle warned that future sales could be “significantly influenced by further developments.”

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