Chipotle Q2 Earnings Top, Revenues Lag Estimates, Stock Down

Chipotle Mexican Grill, Inc. CMG reported second-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line increased year over year, while the bottom line fell from the prior-year quarter’s figure.

Following the results, the company's shares fell 10.6% in the after-hours trading session yesterday. Negative investor sentiments were witnessed as management highlighted weakening consumer confidence and lowered its full-year 2025 comparable sales outlook. The revenue miss, coupled with margin compression and cautious commentary on macro headwinds, further weighed on investor confidence.

CMG’s Q2 Earnings & Revenue Discussion

For the quarter under review, CMG reported adjusted earnings per share (EPS) of 33 cents, beating the Zacks Consensus Estimate of 32 cents. The bottom line fell 2.9% from 34 cents reported in the year-ago quarter.

Quarterly revenues of $3.06 billion missed the consensus mark of $3.1 billion by 1.2%. However, the top line rose 3% on a year-over-year basis. This upside was driven by new restaurant openings.

Chipotle Mexican Grill, Inc. Price, Consensus and EPS Surprise

Chipotle Mexican Grill, Inc. price-consensus-eps-surprise-chart | Chipotle Mexican Grill, Inc. Quote

Comparable restaurant sales in the second quarter fell 4% against 11.1% growth reported in the prior-year quarter. During the quarter, comps were hurt by lower transactions of 4.9%. However, this was partially mitigated by a 0.9% rise in average checks.

During the second quarter, digital sales contributed 35.5% to total food and beverage revenues.

Chipotle’s Restaurant Openings

Strength in new restaurant openings aided the company’s performance in the second quarter. In the reported quarter, Chipotle opened 61 company-owned restaurants, with 47 featuring a Chipotlane. The company reported strong performance of Chipotlanes, contributing to higher sales, better margins and stronger returns at new locations.

CMG’s Costs, Operating Highlights & Net Income

In the second quarter of 2025, food, beverage and packaging costs, as a percentage of revenues, came in at 28.9%, compared with 29.4% reported in the prior-year quarter. The improvement was driven by menu price increases implemented in 2024 and enhanced cost-of-sales efficiencies. This was partly offset by inflation across ingredient costs, primarily steak and chicken. We expected the metric to be 29.9%.

In the quarter under discussion, the restaurant-level operating margin reached 27.4%, down from 28.9% reported in the prior-year period. We predicted the metric to be 26.7%.

Adjusted net income in the reported quarter amounted to $450.4 million, compared with $463 million reported in the prior-year quarter. Our estimate for the metric was $387.6 million.

Balance Sheet of Chipotle

As of June 30, 2025, the company reported cash and cash equivalents of $844.5 million compared with $748.5 million as of Dec. 31, 2024.

As of June 30, 2025, inventory totaled $40.4 million compared with $48.9 million as of Dec. 31, 2024.

CMG’s 2025 Outlook

For 2025, management anticipates comparable sales to remain roughly flat, down from the earlier projection of low-single-digit growth. It expects to open between 315 and 345 new company-operated restaurants in 2025, with more than 80% featuring a Chipotlane. It expects a tax rate in the range of 25-27% in 2025.

CMG’s Zacks Rank & Key Picks

Chipotle currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Retail-Wholesale sector are Cracker Barrel Old Country Store, Inc. CBRL, Portillo's Inc. PTLO and Yum! Brands, Inc. YUM.

Cracker Barrel currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cracker Barrel has gained 35.9% in the year-to-date period. The Zacks Consensus Estimate for Cracker Barrel’s fiscal 2026 sales and EPS indicates growth of 1.8% and 9.4%, respectively, from the year-ago period’s levels.

Portillo's presently carries a Zacks Rank #2 (Buy). The stock has gained 22.1% in the year-to-date period.

The Zacks Consensus Estimate for Portillo's 2026 sales and EPS implies growth of 14.4% and 27.8%, respectively, from the year-ago levels.

Yum! Brands presently carries a Zacks Rank #2. The stock has gained 10.2% in the year-to-date period.

The Zacks Consensus Estimate for Yum! Brands’ 2025 sales and EPS indicates an increase of 6.9% and 10%, respectively, from the year-ago levels.

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This article originally published on Zacks Investment Research (zacks.com).

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