Latest news with #Chipotle Mexican Grill
Yahoo
3 hours ago
- Business
- Yahoo
Cava's shares crater after first annual sales growth target cut since IPO
By Juveria Tabassum (Reuters) -Shares of Cava dropped 21% in extended trading on Tuesday, after the Mediterranean restaurant chain lowered its annual same-store sales growth target for the first time since it listed on the New York Stock Exchange two years ago. An uncertain macroeconomic environment has forced consumers to opt for more affordable meals at home, dampening demand for dining out over the last several months, impacting the results of other restaurant chains, including burrito giant Chipotle Mexican Grill and salad-focused Sweetgreen. Cava had reported a double-digit rise in same-store sales for the last four quarters, helped by demand for its pita wraps and salad bowls. However, customer traffic remained almost flat in the second quarter, with its same-store sales rising 2.1%, below estimates of 6.47%, according to data compiled by LSEG. Cava now expects full-year same-restaurant sales growth between 4% and 6%, compared with its prior target of 6% to 8%. Consumers were less confident than they were a year ago as economic uncertainties weighed, which led to weaker traffic in June and early July, but visits have improved since, said Brett Schulman, Cava's co-founder and CEO. Cava is opening more stores to capitalize on the resilient demand for its menu items and has raised its target for annual new restaurant openings to a range of 68 to 70, from 64 to 68 expected earlier. It also maintained targets for annual profit margin and core profit. The company does not plan to increase prices and would try to absorb any inflationary costs from tariffs, Schulman added. "As we've seen the last few weeks, I don't know that these recent announcements (on tariffs) will be the same announcements in a couple of weeks. So we're staying nimble," he said. The company reported a profit of 16 cents per share for the quarter ended July 13, compared with estimates of 13 cents apiece. As of last close, Cava's shares have more than doubled to $84.50 since its blockbuster IPO in June 2023. Sign in to access your portfolio
Yahoo
26-07-2025
- Business
- Yahoo
Chipotle Shares Slide on Weak Same-Store Sales. Time to Buy the Dip or Run for the Hills?
Key Points Chipotle saw its same-store sales decline for the second straight quarter. As a result, the company lowered its forecast and now expects flat comparable-restaurant sales for the year. While the company is currently struggling, much of this looks macro-related, which could make the dip a good buying opportunity. 10 stocks we like better than Chipotle Mexican Grill › Chipotle Mexican Grill (NYSE: CMG) has long been one of the most popular fast-casual restaurant chains around, but this year, the company has been struggling to bring in the same type of customer traffic to its restaurants that it's used to. After not seeing a same-store sales decline since 2020, which was early during the COVID-19 pandemic when people were staying home and businesses were shuttered, the company just reported its second straight quarter of comparable-store-sales decreases when it announced its Q2 results on July 23. The weakness started back in January and continued into the spring. With the stock now down 24% in 2025 as of July 24, let's see if this dip is a buying opportunity or if investors should run for the hills. Traffic declines After seeing its comparable-restaurant sales fall 0.4% in Q1, the weakness continued, with Chipotle seeing a 4% decline in Q2. Transactions sank 4.9%, while its average check size rose 0.9%. The company called out May as being particularly weak, but it then began to see a rebound in June, with comparable sales and traffic turning positive. It credited the launch of its limited-time Adobo Ranch dip offering and "Summer of Extras" reward program for the improvement. It said that while July has been choppy, the positive comp and transaction trends have continued. It also called out the strong performance of its Chipotle Honey Chicken limited time offering, saying it accounted for one out of every four orders. Despite the recent rebound, the company lowered its full-year same-store outlook. It now expects comparable-store sales to be flat compared to an earlier outlook of low single-digit growth. However, the company does believe it can still generate mid-single-digit comparable-restaurant sales over the long term. Management does not believe it's making any missteps, with its recent struggles more a result of shifts in consumer sentiment. Overall, Chipotle grew its revenue by 3% to $3.06 billion in the quarter, while adjusted earnings per share (EPS) fell 3% to $0.33. Analysts were looking for adjusted EPS of $0.33 on revenue of $3.11 billion, as compiled by LSEG. Restaurant-level operating margins dipped 150 basis points to 27.4%. This is an important metric, as it measures how profitable each individual restaurant is. The drop appears largely due to higher wage costs and sales deleveraging, as the company said that supply chain and in-restaurant initiatives have more than offset the declines from increasing portion sizes that had been too small. Last year, a number of viral videos called out some locations for skimping on portion sizes, which the company decided to remedy. It said about 30% of its restaurants needed to be retrained on correct portion sizes. Chipotle's goal is to return restaurant-level margins back to the 29% to 30% range in the future, while driving average unit volumes (average yearly sales of an individual restaurant) above $4 million. Is it time to buy the dip? There is no doubt that Chipotle is going through a difficult stretch. The big question is whether this is self-inflicted, or whether this is largely due to a more difficult consumer environment, or perhaps a combination of the two. My guess is it's a little bit of both. There is good evidence that consumers have been a bit more cautious given all the tariff talk and some higher prices. However, I've been to a few Chipotle restaurants this year that have had trash receptacles overflowing and dirty tables, which made me not want to eat there. This is just anecdotal, but if it's more widespread, it could certainly turn some customers off. However, I think it might be easy to fix this issue. Meanwhile, the company still has a long growth runway. It's still really just starting to expand internationally, and it continues to believe it can increase its U.S. locations at an 8% to 10% annual rate. So while Chipotle has certainly become a large operation, it still has plenty of growth ahead. From a valuation standpoint, the stock now trades at a forward price-to-earnings (P/E) multiple of about 38 based on 2025 analyst estimates and 32 based on 2026 estimates. That's not in the bargain bin, but it's cheaper than where it's traded at over the past few years. At this point, while I think there is some room for improvements, I don't think the long-term Chipotle story has changed. I really like its international and continued expansion opportunity, and its core menu and limited time offerings continue to resonate with customers. Consumers still respond to its marketing, and I think it can get back to solid same-store sales growth in a more normal environment. As such, I'd think investors with a long-term outlook can confidently continue to accumulate shares at current levels. Should you invest $1,000 in Chipotle Mexican Grill right now? Before you buy stock in Chipotle Mexican Grill, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Chipotle Mexican Grill wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends the following options: short September 2025 $60 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy. Chipotle Shares Slide on Weak Same-Store Sales. Time to Buy the Dip or Run for the Hills? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-07-2025
- Business
- Yahoo
Chipotle Stock Drops as Company Eyes Flat 2025 Same-Store Sales
Shares of Chipotle Mexican Grill (CMG) dropped late Wednesday after the burrito-and-bowl chain scaled back its same-store sales outlook, again. Chipotle's stock was recently off some 10% in late trading, sliding after a regular session in which it rose a bit less than 1%. (Read Investopedia's full coverage of today's trading here.) The shares, down roughly 12% this year through today's close, were looking at a move below $50, which they haven't touched in more than a month. The company in a statement said it expects same-store sales to come in "about flat" this year. That's a downbeat update to the "low single digit" growth rate it reported when it turned in first-quarter results—which was itself a lower-than-first-projected figure, since at the start of the year management pointed toward low to mid-single-digit growth. Chipotle said second-quarter revenue rose 3% year-over-year to $3.1 billion, while comparable-restaurant sales fell 4%. Adjusted earnings per share came in at $0.33. The sales and EPS figures were in line with Visible Alpha's consensus estimates. "I am optimistic that our positive momentum will continue as we further support our world-class people with new tools to improve execution, introduce new menu innovations, amplify our rewards program, and introduce this great brand to more communities around the globe," CEO Scott Boatwright said in a statement. Read the original article on Investopedia
