Chipotle Mexican Grill (NYSE: $CMG) shares dropped 3.4% to $47.07 following the release of its first-quarter 2025 financial results that showed mixed performance against market expectations. While the fast-casual Mexican food chain beat earnings estimates, it fell short on the critical revenue front as same-store sales stagnated.
The company reported revenue of $2.88 billion for Q1, representing a 6.4% year-over-year growth but missing analyst expectations of $2.94 billion by 2.1%. This result marks a concerning trend, as Chipotle has now topped consensus revenue estimates only once in the past four quarters.
On a more positive note, Chipotle delivered adjusted earnings per share of $0.29, exceeding the consensus estimate of $0.28 by 4.4%. This continues the company’s streak of surpassing EPS projections for four consecutive quarters. The company also posted adjusted EBITDA of $604.1 million, beating estimates by 5.5% with a solid 21% margin.
Scott Boatwright, Chipotle’s Chief Executive Officer, addressed the challenging quarter: “While our first quarter results were impacted by several headwinds including weather and a slowdown in consumer spending, our teams continue to make significant progress improving the execution in our restaurants, innovating our back of house, and building Chipotle into a global iconic brand.”
Particularly concerning for investors was the flat same-store sales growth compared to the 7% increase reported in the same quarter last year. This performance represents a significant deceleration from Chipotle’s impressive historical average of 6.2% same-store sales growth over the past two years. The company’s free cash flow margin also declined to 14.3% from 16.2% in the year-ago period.
Despite these challenges, Chipotle has maintained its operating margin at 16.7%, unchanged from the same quarter last year, demonstrating disciplined cost management amid inflationary pressures.
The company continues its aggressive expansion strategy, growing its restaurant footprint at a rapid 7.9% annual rate over the past two years, among the fastest in the restaurant sector. This expansion approach has previously served Chipotle well, giving it multiple revenue growth avenues through both new location openings and increased sales at existing restaurants.
Looking ahead, analysts expect Chipotle’s revenue to grow 12.6% over the next 12 months, which represents a slight slowdown compared to its impressive 14.8% annualized growth rate over the past six years. The company’s next-quarter consensus projections stand at $0.36 EPS on $3.24 billion in revenue, with full fiscal year 2025 expectations of $1.26 EPS on $12.52 billion in revenue.
Technical Analysis
From a technical analysis perspective, CMG shares have been predominantly bearish, approaching a key horizontal support level around $43. If this support holds, the stock could potentially rebound toward its previous high of $69 marked in June 2024. However, if the $43 support breaks, the next potential support level sits at $35. The stock’s moving averages (50-day at $50.71, 100-day at $55.40, and 200-day at $55.93) all signal bearish momentum.
Year-to-date, Chipotle shares have underperformed the broader market, losing approximately 21.9% compared to the S&P 500’s 10.1% decline.
Is Chipotle A Buy?
The question for investors now is whether this quarter’s mixed results represent a temporary setback or signal deeper issues. With its established brand loyalty, continued expansion plans, and history of strong execution, Chipotle still maintains several fundamental strengths. However, the flattening same-store sales and revenue miss suggest challenges in driving growth at existing locations that investors should closely monitor in upcoming quarters.
Click Here For Updates on CMG – It’s FREE to Sign Up for Text Message Notifications!
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.
