Chipotle Mexican Grill (NYSE: CMG) reported its financial results for the first quarter on Wednesday, posting adjusted earnings per share of $0.29, which exceeded Wall Street estimates. However, its revenue of $2.9 billion came up short of expectations.
This top restaurant stock has been a huge winner over the past five years (as of April 24), rising by 184%. But investors are losing their appetite for it in 2025. Shares have tanked by 18% so far this year, and they’re down 28% from the all-time high they set in June 2024.
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Has that decline set Chipotle up as a stock you should buy now on the dip and hold for the next 20 years?
U.S. consumers aren’t in the best shape these days. The University of Michigan Consumer Sentiment Index’s reading this month was the second lowest on record (data goes back to 1952). The only other time it was worse was in June 2022, right after the Federal Reserve started aggressively raising benchmark interest rates to combat soaring inflation.
The U.S. might not officially be in a recession right now. But the overall mood of consumers is far from rosy as they attempt to cut back on their discretionary spending in preparation for more difficult times ahead. That’s taking a toll on Chipotle, a business that previously had enjoyed fairly durable demand.
The fast-casual Tex-Mex pioneer reported a surprising same-store sales decline of 0.4% in the first quarter. That was its first year-over-year drop since the second quarter of 2020 — the onset of the COVID-19 pandemic. And it was a drastic reversal from the 7% gain it registered in Q1 2024.
“In February, we began to see that the elevated level of uncertainty felt by consumers are starting to impact their spending habits,” CEO Scott Boatwright said on this week’s earnings call. The company’s outlook calls for same-store sales to increase in the low single-digit range for the full year.
To its credit, though, Chipotle has long implemented a strategy that focuses on its value proposition for customers. Management still believes this is the company’s key strength, highlighting the below-$10 average cost of its chicken burritos and burrito bowls, its most popular entrees.
“This is about 20% to 30% below comparable fast-casual meals and can reach as high as 50% below comparable meals in some markets,” Boatwright said about those menu items. This could at least provide a buffer that will allow Chipotle to fare better than rivals in a recessionary scenario.
DJ Kamal Mustafa
I’m DJ Kamal Mustafa, the founder and Editor-in-Chief of EMEA Tribune, a digital news platform that focuses on critical stories from Europe, the Middle East, Africa, and Pakistan. With a deep passion for investigative journalism, I’ve built a reputation for delivering exclusive, thought-provoking reports that highlight the region’s most pressing issues.
I’ve been a journalist for over 10 years, and I’m currently associated with EMEA Tribune, ARY News, Daily Times, Samaa TV, Minute Mirror, and many other media outlets. Throughout my career, I’ve remained committed to uncovering the truth and providing valuable insights that inform and engage the public.
