Chipotle Shares Drop on Soft Q3 Results

Chipotle Mexican Grill (CMG) stock tumbled 16% after the fast-casual restaurant chain reported weaker-than-expected third-quarter results marked by sluggish sales and margin compression.

Comparable sales rose only 0.3%, signaling muted traffic amid softer consumer spending.
Restaurant-level operating margin fell 100 basis points to 24.5%, and the overall operating margin also declined 100 bps to 15.9%.
Management attributed the margin pressure to higher labor and protein costs, as well as the impact of new tariffs on imported ingredients.

Outlook for FY2025

Chipotle expects low single-digit declines in comparable sales for fiscal 2025.
However, the company plans to expand aggressively, targeting 315–345 new restaurant openings next year, followed by 350–370 new units in 2026, including some international expansion into new markets.

Industry Impact

The disappointing results weighed on the restaurant and fast-casual sector, highlighting how inflationary pressures and cost volatility are squeezing profitability even for premium dining chains.
Investors are watching how the company balances growth initiatives with margin recovery heading into 2025.