Chipotle (CMG) Traded Down Due to Challenges in Consumer Environment

Pershing Square Holdings, an investment holding company, released its first half 2025 investor letter. A copy of the same can be downloaded here. In the first half of 2025, the company’s NAV per share increased by 15.5% and 17.7% year-to-date through August 19, 2025. The company’s share price rose by 9.9% and 16.5% during these periods, while the S&P 500 increased by 6.2% and 9.9%, respectively. The first half of 2025 was characterized by complex macroeconomic and geopolitical dynamics, contributing to broad uncertainty. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Pershing Square Holdings highlighted stocks such as Chipotle Mexican Grill, Inc. (NYSE:CMG). Chipotle Mexican Grill, Inc. (NYSE:CMG) owns and operates Chipotle Mexican Grill restaurants. The one-month return of Chipotle Mexican Grill, Inc. (NYSE:CMG) was -1.35%, and its shares lost 24.37% of their value over the last 52 weeks. On September 05, 2025, Chipotle Mexican Grill, Inc. (NYSE:CMG) stock closed at $41.06 per share, with a market capitalization of $55.057 billion.

Pershing Square Holdings stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its second quarter 2025 investor letter:

"Chipotle Mexican Grill, Inc.'s (NYSE:CMG) performance fell short of its long-term potential in the first half of 2025 as an uncertain consumer environment and difficult comparisons impacted results. Management cut full year 2025 guidance for the second time on the second quarter call in July, from low-single-digit growth to approximately flat same-store sales. While some of this same-store sales weakness is clearly due to overall soft consumer spending in restaurants as evident in the performance of competitor brands, the onus is on management to adapt to the current environment and better communicate Chipotle’s phenomenal customer value proposition. We fully expect Chipotle to return to its historical growth trajectory once execution improves and macro headwinds moderate.

Same-store sales declined 4% in the second quarter, reflecting a challenging 11% prior-year comparison and softer traffic from lower-income customers. Management attributed the weakness to volatile consumer confidence and believes that some traffic was lost to quick service brands offering price-point-based promotions. Despite the sales pressure, restaurant level margin and operating income exceeded expectations due to supply chain efficiencies and improved in-restaurant execution.…”(Click here to read the full text)

Chipotle Mexican Grill, Inc. (NYSE:CMG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held Chipotle Mexican Grill, Inc. (NYSE:CMG) at the end of the second quarter, which was 78 in the previous quarter. Chipotle Mexican Grill, Inc.’s (NYSE:CMG) sales for the second quarter of 2025 grew 3% to reach $3.1 billion. While we acknowledge the potential of Chipotle Mexican Grill, Inc. (NYSE:CMG) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Chipotle Mexican Grill, Inc. (NYSE:CMG) and shared the list of stocks that Jim Cramer recently discussed. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.