Chipotle Reports Mixed Q4 Results, Stock Down 5% Year-to-Date

Chipotle's stock faces pressure post earnings despite revenue growth. Investors weigh whether now is the time to buy the dip. The earnings report has raised concerns about same-store sales and profitability.

Date: 08-02-2025

AI Rating: 6

Earnings Per Share (EPS)
Chipotle reported an adjusted EPS of $0.25, which surpassed the consensus estimate of $0.24. This indicates a positive outcome for the company in terms of earnings.

Revenue Growth
The company's revenue increased by 13% year over year to $2.85 billion, meeting analyst expectations. This development reflects steady demand and product acceptance in the market.

Profit Margins
The restaurant-level profit margin fell to 24.8% from 25.4% year-over-year. While still high, this decline may raise concerns about the efficiency and cost management at the individual restaurant level. The decrease in profit margins is attributed to higher costs related to increased portion sizes and labor.

Traffic and Sales Performance
Despite reporting gains in traffic, same-store sales were down about 2% for January, largely due to external factors including severe weather and a calendar shift. The company mentioned an estimated 400 basis-point impact on comparable restaurant sales.

Future Outlook
Management expects same-store sales growth in low- to mid-single-digit range for the full year and plans to increase prices by about 2%. This hints at cautious optimism, although the challenges in the near term could impact stock performance.

Over the long term, Chipotle has a solid plan for expansion, opening new locations and focusing on international markets. The report indicates that the company aims to offset potential impacts of tariffs on costs through efficiencies in its supply chain.

In summary, while Chipotle shows promising growth and innovation potential, current challenges in same-store sales and profitability might put pressure on the stock in the short term.

Stocks: CMG