Shares of Chipotle Mexican Grill (CMG) sank in after-hours trading after the restaurant chain reported earnings for its third quarter of Fiscal Year 2025. Earnings per share came in at $0.29, which met analysts’ consensus estimate. Sales increased by 7.5% year-over-year, with revenue hitting $3 billion. This missed analysts’ expectations by $20 million.
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Chipotle’s revenue growth was driven by the addition of 86 new restaurants, which included two international locations. However, same-store sales rose by just 0.3%, as a 1.1% increase in average check size was offset by a 0.8% decline in customer traffic. This marks the third straight quarter of falling visits, which the company attributes to “consistent macroeconomic pressures.”
Indeed, CEO Scott Boatwright noted that the slowdown was finally hitting the restaurant chain after it had outperformed the broader sector in 2024. This is because Chipotle’s customer base has a higher average income, which initially helped insulate it from lower consumer spending last year.
Outlook
Looking ahead, Chipotle lowered its full-year 2025 same-store sales forecast, now expecting a low-single-digit decline rather than the low to mid-single-digit growth it projected in February. Additionally, the company plans to open 350 to 370 new locations in 2026, including up to 15 international stores through partnerships in Korea, the Middle East, and Latin America.
Is CMG Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on CMG stock based on 19 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average CMG price target of $53.45 per share implies 34.4% upside potential.
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