Latest news with #ChipotleMexicanGrill
Business Insider
19 hours ago
- Business
- Business Insider
Chipotle Mexican Grill (CMG) Hot Streak Cooled by Slashed Forecast
Chipotle Mexican Grill (CMG) investors received a harsh reality check last week after digesting CMG's gruesome Q2 earnings report, which included eyebrow-raising top-line misses. Given that the company reported figures outside of market hours, the news led to the stock opening more than 10% lower than its previous close and now trades ~11.5% lower since its earnings call. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. To provide readers with some background context, Chipotle was experiencing a 14% 'revenue surge' around this time in 2023, driven by new locations and 'comparable restaurant sales.' This momentum carried over into 2025, when revenue grew by another 14.6%. In February this year, the firm said it expected sales growth 'in the low to mid-single-digit range.' Fast forward to the present day, Chipotle's Q2 featured a 4% decline in comparable restaurant sales, while revenue fell short of expectations with a meager 3% year-over-year increase and a 2.9% decrease in adjusted EPS. To throw 'salsa' on the wound, Chipotle then lowered its comparable sales growth forecast to 'approximately flat.' The lackluster Q2 performance and lowered guidance signal that Chipotle's days of robust growth are behind it, leaving me cautiously Neutral on its stock. A Perfect Storm of Headwinds Hits Chipotle A mix of macroeconomic and company-specific factors has driven Chipotle's recent guidance cut. Broadly, the economic environment continues to pressure consumer discretionary sectors—especially restaurants. In May 2025, food-away-from-home prices rose 3.8% year-over-year, squeezing already thin restaurant margins. While Chipotle and its peers implemented modest menu price hikes (2% in late 2024), these increases often result in reduced customer traffic. Chipotle is particularly exposed to this dynamic. It's often viewed as a pricier option compared to competitors like Wendy's (WEN) and McDonald's (MCD), making it more vulnerable as consumers face tighter budgets. Even loyal customers are gravitating toward lower-priced menu items, creating a 'negative mix shift' that dampens sales growth. Adding to the pressure is rising competition from CAVA Group (CAVA) — a rapidly expanding fast-casual chain that offers health-conscious Mediterranean bowls and is increasingly seen as a Chipotle alternative. Importantly, Chipotle's challenges aren't purely external. Internally, the company acknowledges a 'value perception gap' with its competitors. Despite launching more affordable options—like a sub-$10 burrito bowl—consumers still tend to view Chipotle as a premium or occasional splurge, especially among lower-income diners. Chipotle's COO, Scott Boatwright, has argued that the brand doesn't get enough credit for its value, although the company admits that this perception is something it needs to address. Chipotle's Comeback Requires Marketing and Menu Innovation Clear indications of plateauing revenue growth and peaking restaurant sales have spurred Chipotle's management into action. Boatwright is seeking to right the Chipotle ship through added marketing spend, emphasizing the restaurant's proposition. Moreover, its loyalty program, which includes 20 million active members, offers rewards to drive visits. For its inactive members, the company is deploying ' AI solutions' to deliver targeted offers to reengage lapsed customers. As always in the restaurant business, menu innovation is key, and Chipotle doesn't want to sit on its hands. The Chipotle Honey Chicken, which launched in March 2025, is the brand's best-performing limited-time offer (LTO) in its history. Internally, Chipotle is combating margin pressure by making strategic investments in back-of-house technology and implementing operational enhancements. The latter includes a dual-sided plancha for faster cooking and a new three-pan rice cooker to increase capacity. Essentially, any measure that enhances preparation efficiency, thereby freeing up labor, is a key consideration, as labor is a cost mountain when owning a restaurant. Notably, the majority of its new locations will feature a 'Chipotlane,' which enables convenient digital order pickup. Is CMG Stock a Buy, Sell, or Hold? On Wall Street, CMG sports a consensus Moderate Buy rating based on 20 Buy, seven Hold, and zero Sell ratings in the past three months. CMG's average stock price target of $59.50 implies almost 30% upside over the next 12 months. Following its Q2 earnings, BTIG analyst Peter Saleh maintained a Buy rating on CMG, but lowered its price target from $60 to $57. He noted that despite Chipotle's reduced guidance, 'comps and traffic returned to positive in June and July, and restaurant margins should do the same in the second half.' Chipotle Stagnates via Premium Valuation and Slowing Growth The abrupt pause in Chipotle's multi-year growth streak has reshaped its investment narrative. The central question now is whether this is a short-term setback or the beginning of a broader decline in its market leadership. What's clear is that sustaining its premium valuation—trading at a Price-to-Earnings ratio more than double that of its peers—will be increasingly difficult if growth continues to slow. Still, rather than signaling the end of the road, the Q2 results appear to mark a pivotal test for management. Navigating it successfully will require strong execution, strategic flexibility, and perhaps a bit of luck. Given the confluence of troubling factors, I'm decidedly Neutral with a bearish bias.
Time Out Dubai
19 hours ago
- Entertainment
- Time Out Dubai
Chipotle is giving away free guac – here's how to get it
If you love loading your burritos, bowls or tacos with lashings of that creamy good stuff, you're in for a treat. Chipotle is marking National Avocado Day by giving away free guacamole along with regular orders. The one-day-only offer is available exclusively through the Chipotle app on Thursday July 31. All you need to do is place a pick-up or delivery order of Dhs60 or more, make sure it includes a regular side of guac and enter the promo code AVO2025 at checkout. That's it and your zingy guac is on the house. What's more, if you follow the brand on Instagram and answer their avo trivia on their Insta stories, you could be one of the 20 lucky winners to enjoy free guac for a whole year. Chipotle Mexican Grill is all about classically-cooked food with wholesome ingredients sans the artificial colours, flavours or preservatives. Whether you prefer a classic chicken burrito, the flavorful beef barbacoa or the Sofritas (marinated Tofu) for a vegan option, every dish is completely customisable, you can choose your rice, proteins, salsas and a variety of toppings to fill your bowls & burritos with. We'll take ours with that free guac, please. Having first opened doors in Colorado back in 1999, the restaurant expanded later across the United States and into Canada, Germany, France, the UK and now the Middle East. Ready to enjoy the tastiest accompaniment in a burrito bowl for free? Order your choice of meal through the Chipotle App now. Use PROMO code: AVO2025 Download Chipotle App on iOS or Android
Yahoo
2 days ago
- Business
- Yahoo
Is Chipotle Stock a Buy After Its Second-Quarter Earnings?
Key Points Revenue and earnings growth has slowed dramatically amid rising competition and a sluggish economy. As growth slows, investors may question the premium valuation Chipotle has commanded historically. Chipotle's prospects for long-term expansion continue to appear promising. 10 stocks we like better than Chipotle Mexican Grill › Chipotle Mexican Grill (NYSE: CMG) failed to unwrap a strong earnings report when it released its earnings for the second quarter of 2025. The burrito giant experienced a dramatic slowdown in growth, a concerning sign as it has historically commanded a premium valuation. This situation leaves investors in a difficult position. Former CEO Brian Niccol left the company last year to join Starbucks. Although its previous COO, Scott Boatwright, has run the company since then, the verdict is likely still out on his tenure. Chipotle continues to grow as it adds locations, so long-term shareholders have no apparent reason to sell their shares. The question is whether investors should add shares, or is it best for them to stay on the sidelines? Chipotle's Q2 results In the second quarter of 2025, Chipotle generated $3.1 billion, representing a 3% year-over-year increase. That included a 4% decrease in comparable restaurant sales. Hence, revenue grew only because Chipotle added 309 restaurants over the last year, taking the count to 3,839 as of June 30. Unfortunately, these results stand in contrast to Q2 2024, when revenue grew by 18%. The company attributed the decline to negative consumer sentiment and rising competition. In Q2 2025, net income was $436 million, decreasing by about 4% annually. Increases in operating costs, particularly labor, occupancy, and other expenses, weighed on profit growth. Moreover, while investors expected the slowdown, its revenue numbers fell short of estimates. That may partially explain why the stock fell 13% after the release. It has also fallen by one-third since reaching its all-time high in June of last year. Why investors should be concerned Admittedly, even the best growth stocks experience significant retrenchments when on a long-term growth trajectory. Investors often treat such occasions as a buying opportunity, and they have a strong argument for such thinking. The stock is up by more than 5,000% since its 2006 IPO. Additionally, its massive footprint may be just the beginning of its growth. Chipotle believes it can grow to 7,000 restaurants in North America alone. Also, it has begun to establish a presence in three European countries and the Middle East, dramatically increasing its growth potential. Despite its long-term growth, Chipotle's valuation may have made the stock particularly vulnerable. Its 40 P/E ratio is not unusual,, as it has long sold at a premium. Still, with profit growth nearly at a standstill, investors could start to question why they would pay a premium for this stock. If the P/E ratio fell to the 20 range, that in itself would take the stock price down by approximately half. Furthermore, since Chipotle is not a dividend stock, investors may question whether it pays to own this stock under such conditions. Should investors buy Chipotle stock after its Q2 earnings? Given the current state of Chipotle stock, investors should probably refrain from adding shares at this time. Indeed, Chipotle is one of the most successful restaurant stocks in history. That alone likely makes it a hold for long-term investors. Unfortunately for shareholders, investors have little incentive to purchase the stock just now. Competition and a sluggish economy have so significantly impacted sales that it now relies entirely on the rapid expansion of its footprint for revenue growth. Moreover, investors do not collect a dividend, meaning they rely on the stock beating the S&P 500 index to win with holding Chipotle. Thanks to tepid revenue and profit growth, investors no longer have an incentive to pay over 40 times earnings, making near-term pain for the stock more likely. Chipotle remains on track for a massive expansion assuming its restaurants continue to succeed abroad. Nonetheless, the slowdown in growth bodes poorly for its stock in the short term. Until its valuation aligns more closely with its growth rate, it is probably not worthwhile for investors to buy more shares. Should you invest $1,000 in Chipotle Mexican Grill right now? Before you buy stock in Chipotle Mexican Grill, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chipotle Mexican Grill wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill and Starbucks. The Motley Fool recommends the following options: short September 2025 $60 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. Is Chipotle Stock a Buy After Its Second-Quarter Earnings? was originally published by The Motley Fool
Yahoo
2 days ago
- Business
- Yahoo
Down 32%, Is Chipotle a Once-in-a-Generation Investment Opportunity?
Key Points Chipotle missed analysts' expectations for revenue in Q2 as same-store sales fell. The company is still robustly profitable, and its long-term plans to significantly grow its store count are still on track. Chipotle shares haven't traded at such a low price-to-earnings valuation in years. 10 stocks we like better than Chipotle Mexican Grill › Chipotle Mexican Grill (NYSE: CMG) reported its financial results for the second quarter on Wednesday afternoon, and the market was disappointed, to say the least. The company's adjusted earnings per share matched Wall Street's estimates, but its revenue of $3.1 billion was below expectations. From where they closed on Wednesday, shares fell by more than 14% in the following session, and were still down by more than 12% as of late afternoon Friday. This restaurant stock has still been a rewarding holding for its long-term investors, as it has climbed 102% in just the past five years. But some pessimism has taken hold, and it currently trades 32% off its peak. Does this setup make Chipotle a once-in-a-generation investment opportunity? Not satisfying investors' appetites In the past few years, especially since the onset of the COVID-19 pandemic, Chipotle has put up some impressive financial performances. That's why its recent weakness warrants a deeper dive. All retail and restaurant chains focus intensely on growing same-store sales (aka comps), as that indicates their ability to drive revenue gains from existing locations. Chipotle posted same-store sales growth of 7.9% in 2023 and 7.4% in 2024. But in the first quarter of this year, its comps declined by 0.4% year over year, and in Q2, they fell by 4%. Management has downgraded its guidance to say that it now believes Chipotle's same-store sales for the year will be flat. Foot traffic, as measured by number of transactions, fell by 4.9% in the second quarter. This followed a 2.3% drop in Q1. This is certainly what's causing investors to lose confidence. The current macroeconomic environment isn't helping the situation. "I think much of what we're experiencing right now is due to macro, and the consumer, the low-income consumer, is looking for value," CEO Scott Boatwright said on the earnings call. Weak consumer sentiment is a drag on the business. "I think that's probably the biggest headwind we face," he said. Don't forget the positive attributes It would be easy for investors to get caught up in the recent struggles of this company. However, while they definitely deserve some attention, it's important to focus on Chipotle's favorable traits. And its long-term prospects remain bright. This is a profitable enterprise that's a gold-standard operator in the restaurant industry. Chipotle's restaurant-level operating margin -- a metric that strips away corporate overhead costs to highlight how the front-line stores are doing -- came in at a superb 27.4% in Q2. The business has also emphasized operational efficiencies. Most recently, that has meant leveraging innovative tools, processes, and technologies to boost productivity at its restaurants. Even amid the recent sluggishness, Chipotle has continued to expand at a rapid clip. So far this year, it has opened 113 net new stores. It plans to end 2025 having added 330 new locations to its footprint. Given its restaurant-level profitability and its average annual unit sales volume of over $3.1 million, it makes sense that management has kept its foot on the gas pedal. There are now 3,839 Chipotle stores in total. However, the company aims to be much larger in the future. Management reiterated its target of having 7,000 locations in the U.S. and Canada one day. Revenue and earnings will be substantially greater at that level of scale. Trading at a five-year low Chipotle was once a high-flying stock. In the five years leading up to its all-time high in June 2024, shares rose by an awe-inspiring 368%. As a result of this performance, its valuation was too steep, in my view. That situation has changed. Investors can scoop up shares today at a price-to-earnings ratio of about 40. This is the cheapest valuation multiple that the stock has traded for since July 2020. I wouldn't go so far as to say Chipotle is a once-in-a-generation opportunity, but investors should still consider buying shares. Should you invest $1,000 in Chipotle Mexican Grill right now? Before you buy stock in Chipotle Mexican Grill, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chipotle Mexican Grill wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends the following options: short September 2025 $60 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. Down 32%, Is Chipotle a Once-in-a-Generation Investment Opportunity? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Chipotle Mexican Grill (CMG) Slashes 13% on Disappointing Q2, Outlook
We recently published . Chipotle Mexican Grill, Inc. (NYSE:CMG) is one of the worst-performing stocks on Thursday. Chipotle Mexican Grill fell by 13.34 percent on Thursday to close at $45.74 apiece as investors digested a mixed earnings performance and weak outlook for the rest of the year. In its earnings release, Chipotle Mexican Grill, Inc. (NYSE:CMG) said net income for the second quarter of the year dropped by 4.3 percent to $436 million from $455.7 million in the same period last year. Total revenues, on the other hand, grew by 3 percent to $3.06 billion from $2.97 billion year-on-year, driven by new restaurant openings. Comparable store sales, however, decreased by 4 percent due to lower transactions. Looking ahead, the company expects same-store sales to remain flat year-on-year, but it is working on initiatives to boost performance, including improving execution, introducing new menu innovations, amplifying the rewards program, and expanding globally.3 Pixabay/Public domain Additionally, Chipotle Mexican Grill, Inc. (NYSE:CMG) also expects between 25 and 27 percent of tax rate before discrete items for the full year. While we acknowledge the potential of CMG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
