Why Chipotle Stock Is Down 19% After ‘Perfect’ Earnings

A Chipotle restaurant in Austin. Shares of the burrito chain are down more than 30% this year. (Brandon Bell/Getty Images)

Key Points

• Chipotle’s third-quarter earnings of 29 cents per share and $3 billion in revenue matched Wall Street estimates.
• The company lowered its full-year same-store sales guidance to a low-single digit percentage decline, causing a 3.1% stock drop.
• Analysts suggest Chipotle needs to emphasize its value proposition and improve the customer experience to boost domestic sales.

Chipotle Mexican Grill’s third-quarter results were a near-perfect match with Wall Street’s projections. Yet the stock dropped because the burrito chain was less upbeat about same-store sales.

Chipotle posted third-quarter earnings of 29 cents a share from $3 billion in revenue, while same-store sales rose 0.3%. All those numbers were in line with FactSet consensus estimates.

But the company lowered its guidance for full-year same-store sales, a sign that executives foresee a slowdown in demand throughout the fourth quarter. Chipotle’s prior guidance called for “about flat” full-year same-store sales. Its updated projections indicate sales will decline by a percentage in the low single digits.

Created with Highcharts 9.0.1Chipotle Mexican GrillStock ticker: CMGSource: FactSetAs of Oct. 29, 4:03 p.m. ET

Created with Highcharts 9.0.1Aug. 2025Oct.38394041424344$45

Shares were off 19% at $32.26 in premarket trading following the release. The stock was down 34% this year, partly because fewer Americans are dining at fast-casual restaurants.

The chain has been hammered by the same problem that ails its rivals. Higher prices are pushing American consumers to dine out less often and focus on getting the best bang for their buck.

That environment warrants a more cautious stance regarding the sector, wrote Morgan Stanley analyst Brian Harbour. He trimmed his target for Chipotle’s stock price to $59 from $65 in mid-October.

Raymond James analyst Brian Vaccaro said that emphasizing value will be key for Chipotle. He argued that the company needs to do a better job of showing consumers that it offers good deals.

“We believe Chipotle has a very strong value proposition with its entry level chicken bowl/burrito still priced below $10 in most U.S. markets,” Vaccaro wrote in a mid-October note. “We also believe there is an opportunity to more directly message its value proposition as some customers may have been distracted by competitor value promotions and/or forgotten the strength of its value proposition (both price and quality of ingredients).”

Vaccaro rates the stock Outperform.

The company seems to recognize this. CEO Scott Boatwright said Wednesday that the company was focused on how its restaurants perform, marketing, speeding up innovation in its menu, and “creating more engaging digital experiences to ensure we emerge stronger and get back to driving positive transaction growth.”

Executives also said they would hold off on price increases despite rising beef and labor costs so as to not alienate budget-sensitive consumers.

Write to Sabrina Escobar at sabrina.escobar@barrons.com