A month has gone by since the last earnings report for Chipotle Mexican Grill (CMG). Shares have lost about 6.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Chipotle due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Chipotle Mexican Grill, Inc. before we dive into how investors and analysts have reacted as of late.
Chipotle Q2 Earnings Top, Revenues Lag Estimates
Chipotle 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.
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.
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.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Chipotle has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock has a grade of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Chipotle has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Chipotle Mexican Grill, Inc. (CMG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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