Chipotle Earnings Slip Amid Disappointing Guidance
Chipotle Mexican Grill (CMG) recently faced challenges as its earnings report for the third quarter of FY 2025 revealed a mixed performance. The company reported earnings per share (EPS) of $0.29, aligning with analysts’ estimates, but its revenue of $3 billion fell short of expectations by $20 million.
Revenue Growth and Challenges
Chipotle’s revenue saw a year-over-year increase of 7.5%, largely attributed to the opening of 86 new restaurants, including two international locations. However, same-store sales growth was minimal, rising only 0.3%. This stagnation was influenced by a 1.1% rise in average check size, which was counteracted by a 0.8% drop in customer traffic.
Impact of Macroeconomic Pressures
The decline in customer visits marks the third consecutive quarter of reduced foot traffic. CEO Scott Boatwright stated that these trends reflect “consistent macroeconomic pressures.” Initially, the restaurant chain had been resilient due to its customer base’s higher average income, which had offered some protection against overall reduced consumer spending.
Future Outlook and Guidance
Looking ahead, Chipotle revised its full-year 2025 projections. The company now anticipates a low-single-digit decline in same-store sales, in contrast to its previous forecast of low to mid-single-digit growth projected in February. Chipotle plans to open between 350 and 370 new locations in 2026, including potential international expansions in Korea, the Middle East, and Latin America.
Analyst Perspectives on Chipotle Stock
On Wall Street, analysts maintain a Strong Buy consensus on CMG stock. The rating is based on 19 Buy recommendations, five Holds, and no Sells recorded over the past three months. The average price target for CMG shares is $53.45, suggesting a potential upside of 34.4%.
- EPS: $0.29
- Revenue: $3 billion
- Same-store sales growth: 0.3%
- New locations (2026): 350 to 370
- Average price target: $53.45
- Analyst consensus: Strong Buy with 19 Buys
In summary, while Chipotle continues to grow its revenue through expansion, it faces headwinds with customer traffic that may hinder its revenue forecasts moving forward.
