After warning during his fourth quarter conference in 2025 began to start in January, the fast and casual restaurant chain Chipotle Mexican Grill(NYSE: CMG) found that traffic was never recovered; Reported their first Sales from the same store Decreased since 2020, at the beginning of Covid-19 Pandemic. The actions largely begat these disappointing results, although from this writing there is still more than 18% a year.
We will deepen the most recent chipotle results to see when the company can return to the court and if the recent weakness of the shares is a purchase opportunity.
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After seeing that sales fall 2% in January, Chipotle Management guided mostly flat sales in the same store for the first quarter. At that time, he blamed the strong time, the Los Angeles wildfires and an unfavorable change of calendar (New Year’s Eve fell on a Wednesday, delaying the return of consumers to their usual routines) for its bad start of the year, but thought it would begin to recover in February.
However, any recovery he saw did not last long. The company said in February that it began to see that customers reduce the frequency of their visits due to concerns about the economy. He said that this high level of uncertainty that consumers feel has continued until April.
The restaurant operator does not look for a speedy recovery. It faces its toughest restoration sales of the year in the first quarter, as their accounts increased by 11.1% in the 2nd quarter last year. In the meantime, a late Easter is also expected to have a negative impact on the quarter.
However, Chipotle still provides for a growth of the same store this year, slightly lower than the forecast above. It now sees sales growth in the same store in the low digits for 2025, and traffic was positive in the second half. Previously, it had planned a comparable sales growth of casualties and averages. The company has a marketing plan improved ready for the summer and the rest of the year to help drive traffic.
The management said that his value proposition, the friendly staff and the clean dining rooms give him a strong competitive advantage during these periods. After having recently been to a few Chipotle restaurants with shocking dining rooms and overflowing the rubbish, I think the direction should take a look closer to the last.
Passing the results, Chipotle increased its income by 6% to $ 2.88 billion, with a tight benefit per action (EPS) jumping 7% to $ 0.29. The consensus analyst compiled by Lseg It was for a tight EPS of $ 0.28 with $ 2.95 billion income.
Comparable-restaurant sales dropped by 0.4%, which was less than 1.7% of analysts expected, according to Streetaccount. The transactions fell by 2.3%, while average control increased by 1.9%.
The restaurant -level operation margins slipped 130 basic points to 26.2%. This is an important metric, as it measures the profitability of each individual restaurant. Larger portions sizes, along with higher eating costs and labor, reached this number. Chipotle hopes that the rates have a continuous impact of about 50 basic points, excluding any impact of the deferred rates in Mexico and Canada.
Image Source: Getty’s pictures.
Even during a difficult period to decrease the traffic of the same store and the increase in costs, you can see the attractiveness of Chipotle. The company still has strong margins at the restaurant level and continues to grow in general, as its growing restaurant count. In fact, it has a long track to continue to add locations, which is one of the most important reasons for long -term actions.
Chipotle sees space to add new locations at an annual rate of 8% to 10% in the United States. In the meantime, the surface of international expansion is barely scratched. It plans to increase growth in Canada this year, although it seeks to develop opportunities in both the United Kingdom and Germany. It is also accelerating growth with its group Alshaya Group in the Middle East and has just signed an agreement with Alsea to open restaurants in Mexico, with the first planned for the beginning of next year.
As a rating, actions market to Forward Price to earnings (p/e) Multiple approximately 39 based on estimates of 2025, which is towards the low range of reach in recent years.
While Chipotle is trying to stop consumers’ traffic, now I see nothing to suggest that its long -term story has changed. I think investors can start accumulating actions at current levels, while you can buy more if the action is based on more pressure by the end of this year.
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Geoffrey Seiler It has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Chipotle Mexican Grill. The Motley Fool recommends the following options: Brief June 2025 $ 55 Calls to Chipotle Mexican Grill. The mold’s fool has a Outreach policy.
