Chipotle Mexican Grill, Inc. (NYSE:CMG) stock has clunked along since its earnings report last week. The stock continues to tread near four-year lows following a Norovirus outbreak in July and video footage of mice falling from the ceiling at a Dallas location.

Reaction to the earnings report was mixed. Shares initially gained after hours and were up in the morning, but the stock closed down 2%. While some reacted positively to the update, there was one warning sign that was widely overlooked.

The exterior of a Chipotle location surrounded by desert plants

Image source: Chipotle.

Chipotle's comparable sales increased 8.1%. That may seem like a strong result, but it comes after the key metric plunged 23.6% in the quarter a year ago due to the E. coli scare. In an earlier article, I said that the best way to assess Chipotle's comeback was to follow the company's two-year comparable sales, not just the one-year. Since the two-year metric factors in the losses from a year ago, it gives a fuller picture of the recovery.

Unfortunately, the most recent quarter came up short in this regard. As the chart below shows by taking one-year comps from early 2016 and two-year comps thereafter, Chipotle's two-year comparable sales growth actually decelerated slightly in the latest quarter.  

Chipotle comparable sales

Source: Chipotle quarterly reports

Prior to that, as the chart shows, comparable sales since the E. coli outbreak had been steadily improving.  You would expect that pattern to continue, but last quarter's report shows that isn't the case. If that trend doesn't change, there's little reason to expect a full recovery from Chipotle.

More bad news

Average unit volumes, which take into account all of Chipotle's restaurants, not just the ones that have been open for more than 13 months, have also been slow to recover. 

Before the E. coli outbreak, Chipotle's average restaurant was generating more than $2.5 million in sales, making it one of the top-performing fast-food chains. However, average unit volumes have plummeted since.

Chipotle Average Unit Volumes

Source: Chipotle quarterly reports

As you can see, while average unit volumes have bottomed out, Chipotle's recovery has barely begun. The average restaurant's sales increased by just $26,000 last quarter, and that includes price hikes at some locations. At that rate, it would take the company more than five years to regain lost sales.

CMO Mark Crumpacker said on the recent earnings call that Chipotle's stores had only regained a sixth of the sales that they lost from the E. coli crisis, while newer stores had regained about one third. Considering that the fastest part of the recovery should take place in the year following the crisis, that statement bodes poorly for Chipotle's regaining all of its lost sales.

Where the burrito rolls from here

As the two-year comparable sales chart above shows, Chipotle's recovery was already stalling, but the recent Norovirus outbreak makes a comeback that much more difficult. CFO Jack Hartung said on the call that comps had fallen 5.5% in the week following the outbreak, which comes on top of a 22% plunge in the quarter the year before. It's unclear if that trend will persist, but it led analysts to cut their full-year EPS estimates from $8.22 to $7.78.

With the rollout of queso across several markets this week, Chipotle has a much-needed to opportunity to change the narrative, but with a slowing recovery, concerns about food safety returning, and competition making the brand less unique than it was a decade ago, it's getting harder to believe Chipotle will make a full recovery.

So far, the company has tried a loyalty program, food giveaways, national advertising, adding chorizo to the menu, a management shake-up, and an enhanced digital platform. Even with all of those efforts, the recovery has not gained much traction.

Queso will be a positive catalyst, but it won't be a cure-all. In other words, Chipotle bulls should be ready for a long slog.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.