Chipotle Mexican Grill (CMG) stock declined 14.5% in the weeks following its Q3 earnings report, reflecting investor concern despite strong underlying metrics. Wall Street maintains a positive outlook, with analysts reaffirming buy ratings and citing long-term growth potential.
- Chipotle (CMG) stock declined 14.5% following Q3 earnings release
- Q3 adjusted EPS of $6.10 fell short of $6.28 consensus estimate
- Same-store sales grew 5.3%, driven by a 7.1% increase in average check
- 26 new units opened in Q3, raising total footprint to 3,650 locations
- International segment grew 23% YoY and contributed 8.6% of total revenue
- Company repurchased $450 million in shares during the quarter
Chipotle Mexican Grill (CMG) saw its shares fall 14.5% in the period after releasing its third-quarter financial results, marking one of the steepest single-period drops for a major restaurant operator in 2025. The decline followed a report that, while showing solid same-store sales growth, failed to meet Wall Street’s elevated expectations for adjusted earnings per share, which came in at $6.10 versus a consensus estimate of $6.28. Despite the sell-off, equity analysts have largely maintained their positive stance on the stock. A majority of the 35 coverage analysts tracked by major financial platforms issued 'buy' or 'hold' recommendations, citing Chipotle’s robust brand strength, disciplined capital allocation, and continued expansion into high-potential markets. The company reported Q3 same-store sales growth of 5.3%, driven by a 7.1% increase in average check and a 1.5% decline in transaction volume—indicating pricing power amid inflationary pressures. The company's international segment continued to show momentum, contributing 8.6% of total revenue and growing at a 23% year-over-year pace. Additionally, Chipotle added 26 new units during the quarter, bringing its total system-wide footprint to 3,650 locations, with 291 of those outside the U.S. The company also repurchased $450 million in shares during the quarter, signaling confidence in its capital structure and long-term value. Investors across the consumer discretionary sector are closely monitoring the stock’s trajectory, as the selloff has sparked debate over whether the decline reflects a temporary reaction to missed guidance or a broader shift in sentiment toward high-velocity restaurant chains. The move has also impacted related ETFs with significant exposure to restaurant stocks, particularly those tracking consumer discretionary indices.