Chipotle Q1 Earnings Top, Revenues Lag Estimates, Comps Fall Y/Y

Chipotle Mexican Grill, Inc. CMG reported mixed first-quarter 2025 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top and bottom lines increased on a year-over-year basis.

Chipotle's first-quarter results were affected by various headwinds, including unfavorable weather conditions and reduced consumer spending. Nonetheless, the company has made notable strides in enhancing restaurant operations, advancing back-of-house innovations and expanding its brand presence both domestically and internationally. During the quarter, the company initiated the launch of Chipotle Honey Chicken and reported increased customer traffic and incremental transactions across locations.

CMG’s Q1 Earnings & Revenue Discussion

In the quarter under review, CMG reported adjusted earnings per share (EPS) of 29 cents, outpacing the Zacks Consensus Estimate of 28 cents. The bottom line increased 7.4% from 27 cents reported in the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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

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

Quarterly revenues of $2.88 billion missed the consensus mark of $2.91 billion by 1.5%. However, the top line rose 6.4% on a year-over-year basis. This upside was driven by new restaurant openings.

Comparable restaurant sales in the first quarter fell 0.4% against 5.4% growth reported in the previous quarter. During the quarter, comps were hurt by lower transactions of 2.3%. However, this was partially mitigated by a 1.9% rise in average checks.

During the first quarter, digital sales contributed 35.4% to total food and beverage revenues.

Chipotle’s Restaurant Openings

Strength in new restaurant openings aided the company’s performance in the first quarter. In the reported quarter, Chipotle opened 57 new restaurants in 48 locations, including a Chipotlane. It also opened two internationally licensed restaurants.

CMG’s Costs, Operating Highlights & Net Income

In the first quarter of 2025, food, beverage and packaging costs, as a percentage of revenues, came in at 29.2%, compared with 28.8% reported in the prior-year quarter. The rise in costs was driven by inflationary costs across avocados, dairy and chicken. Additionally, a shift in protein mix, from limited-time offerings, contributed to the cost uptick. This was partly offset by the positive impact of menu price hikes. We expected the metric to be 29.7%.

In the quarter under discussion, the restaurant-level operating margin reached 26.2%, down from 27.5% reported in the prior-year period. We predicted the metric to be 26.3%.

Adjusted net income in the reported quarter amounted to $396.8 million, up 7.5% year over year. Our estimate for the metric was $387.6 million.

Balance Sheet of Chipotle

As of March 31, 2025, the company reported cash and cash equivalents of $725.6 million compared with $748.5 million as of Dec. 31, 2024.

As of March 31, 2025, inventory totaled $41.4 million compared with $48.9 million as of Dec. 31, 2024. Goodwill (as a percentage of total assets) reached 0.24% at the end of the first quarter of 2025.

CMG’s 2025 Outlook

For 2025, the management anticipates comps growth in the low-single-digit range. 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 from the Zacks Retail-Wholesale sector are Sprouts Farmers Market, Inc. SFM, Portillo's Inc. PTLO and Cracker Barrel Old Country Store, Inc. CBRL.

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

Sprouts Farmers delivered a trailing four-quarter earnings surprise of 15.1%, on average. The stock has gained 36.8% in the past six months. The Zacks Consensus Estimate for Sprouts Farmers’ 2025 sales and EPS indicates a rise of 11.9% and 24.3%, respectively, from the year-ago period’s level.

Portillo's currently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 62.7%, on average. The stock has declined 15.9% in the past six months.

The Zacks Consensus Estimate for Portillo's 2026 sales and EPS indicates growth of 14.1% and 29.7%, respectively, from the year-ago period’s levels.

Cracker Barrel currently carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 22.5%, on average. The stock has declined 5.8% in the past six months.

The Zacks Consensus Estimate for Cracker Barrel’s 2026 sales and EPS indicates a rise of 2.2% and 13.8%, respectively, from the year-ago period’s level.

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

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