Chipotle's disastrous 2015 explained in one chart
Customers dumped the fast-food chain after E. coli and norovirus outbreaks in the fourth quarter.
And on Tuesday evening, the company's quarterly results showed that same-store sales, or sales at stores open at least a year, fell 14.6%, the first time in a decade that sales were negative in a quarter.
But the hardest reality for the company is that fewer customers see it as a healthy food option.
Analysts at Bank of America Merrill Lynch surveyed more than 1,000 customers to understand how they were responding to the health scares, publishing the results in a note Wednesday.
BAML's Joseph Buckley and Gregory Francfort wrote: "Our recent survey also shows a clear negative shift in the perceived healthiness of the brand from survey results last June. Respondents who viewed Chipotle as a healthy food option fell to 32% (from 44%), as an unhealthy option rose to 16% (from 11%), and as neither particularly healthy nor unhealthy rose to 52% (from 45%)."
This, of course, is a major problem, because Chipotle's brand perception as the cool and healthy fast-food option was its big selling point over rivals like McDonald's. Though this was really only ever the result of some marketing genius.As a food-industry researcher told Business Insider's Ashley Lutz last year, it was always sort of amazing that the chain convinced people that 1,300-calorie burritos were healthy.
Now the company is set to launch its most expensive marketing campaign ever to "aggressively" welcome customers back.
Bank of America analysts think sales should improve with time if there are no more issues and raised their rating on the stock to "Neutral" from "Underperform."
Chipotle shares fell by as much as 7% in premarket trading on Wednesday, and they are down more than 25% since news of the E. coli outbreak was first revealed in October.