Chipotle’s Stock Drops 10% On Lowered Same-Store Sales Forecast

The stock of Chipotle Mexican Grill (CMG) is down 10% after the restaurant chain lowered its forecast for same-store sales growth this year as consumers cutback discretionary spending.

For this year’s second quarter, the company known for its burritos and other Mexican cuisine reported earnings per share (EPS) of $0.33 U.S., which was in line with Wall Street forecasts.

However, revenue in the period totaled $3.06 billion U.S., which was below the $3.11 billion U.S. expected among analysts. Sales were up 3% from a year earlier.

Looking ahead, Chipotle’s management team said they anticipate flat same-store sales growth this year. That’s worse than previous projections that called for a low-single digit percentage increase.

This is the second consecutive quarter that Chipotle has trimmed its same-store sales outlook, sending its stock price lower as a result.

Chipotle Mexican Grill’s same-store sales shrank 4% during Q2, worse than last quarter’s decline of 0.4%.

Wall Street had been looking for a same-store sales decrease for the second quarter of 2.9%.

The average bill at the company’s restaurants increased 1%, partially offsetting consumer traffic declines of 4.9% during the quarter.

Since December of last year, Chipotle has struggled with weakening sales.

Management has said that consumer worries about the economy have led them to skip restaurant visits and tighten their purse strings.

Despite lowering its same-store sales guidance, Chipotle reiterated that it plans to open between 315 and 345 new restaurants in 2025.

Prior to today (July 24), CMG stock was down 12% on the year and trading at $52.78 U.S. a share.