It has been about a month since the last earnings report for Chipotle Mexican Grill (CMG). Shares have added about 4.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Chipotle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
Chipotle Q3 Earnings Beat, Revenues Lag Estimates
Chipotle reported third-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. Both top and bottom lines increased year over year.
CMG’s Q3 Earnings & Revenue Discussion
For the quarter under review, CMG reported adjusted earnings per share (EPS) of 29 cents, beating the Zacks Consensus Estimate of 28 cents. The bottom line rose 7.4% from 27 cents reported in the year-ago quarter.
Quarterly revenues of $3 billion missed the consensus mark of $3.02 billion by 0.5%. However, the top line rose 7.5% on a year-over-year basis. This upside was driven by new restaurant openings and an increase in comparable restaurant sales.
Comparable restaurant sales in the third quarter rose 0.3% compared with a 6% growth reported in the prior-year quarter. During the quarter, comps were aided by a 1.1% increase in average check, marginally overshadowed by lower transactions of 0.8%.
During the third quarter, digital sales contributed 36.7% to total food and beverage revenues.
Chipotle’s Restaurant Openings
Strength in new restaurant openings aided the company’s performance in the third quarter. In the reported quarter, Chipotle opened 84 company-owned restaurants, with 64 featuring a Chipotlane.
CMG’s Costs, Operating Highlights & Net Income
In the third quarter of 2025, food, beverage and packaging costs, as a percentage of revenues, came in at 30% compared with 30.6% reported in the prior-year quarter. This was due to menu price increases implemented in 2024 and enhanced cost-of-sales efficiencies. However, it was partially offset by inflation, particularly in beef and chicken, as well as the impact of newly imposed tariffs. We expected the metric to be 29.9%.
In the quarter under discussion, the restaurant-level operating margin reached 24.5%, down from 25.5% reported in the prior-year period. We predicted the metric to be 25.3%.
Adjusted net income in the reported quarter amounted to $389.9 million compared with $366.6 million reported in the prior-year quarter. Our estimate for the metric was $403 million.
Balance Sheet of Chipotle
As of Sept. 30, 2025, the company reported cash and cash equivalents of $698.7 million compared with $748.5 million as of Dec. 31, 2024.
Inventory totaled $46.4 million as of Sept. 30, 2025, compared with $48.9 million as of Dec. 31, 2024.
CMG’s 2025 Outlook
For 2025, management anticipates comparable sales to decline in the low-single digit range compared with the prior estimate of roughly flat.
CMG 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?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -12.44% due to these changes.
VGM Scores
Currently, Chipotle has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Chipotle has a Zacks Rank #4 (Sell). We expect a below average 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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