Chipotle (CMG) on Wednesday is expected to report another quarter of negative sales growth as the company navigates an uncertain consumer environment and new leadership deals with the most challenging backdrop for the chain in years.
Wall Street analysts expect the company to report that its same-store sales fell 2.9% in the second quarter, which would be the second straight quarter of declines. Traffic is expected to fall 4.4% during the quarter, an acceleration from the 2.3% drop seen in the first quarter, which marked Chipotle’s first quarterly foot traffic decline since 2022.
Revenue is expected to rise 8% to $3.1 billion, with earnings per share coming in at $0.33, according to data from Bloomberg.
In April, Chipotle CEO Scott Boatwright told Yahoo Finance in an interview, “We talked to consumers broadly about what is causing them to sit on the sideline in this economy, it’s really trying to save money, [and] uncertainty around what’s going on with the global economy.”
In April, Chipotle also cut its guidance, saying it expects sales to increase in the low-single-digit range versus previous guidance of low-to-mid-single digits. Ahead of Wednesday’s report, analysts expect same-store sales to grow 0.8% for the fiscal year.
“Based on our forecast, we will return to positive transactions in the second half of the year,” Boatwright said.
In the second quarter, the company lapped tough comparisons, William Blair analyst Sharon Zackfia said in a note to clients, setting up for a challenging print on Wednesday.
Last year, second quarter same-store sales were up 11.1%. Zackfia believes comparisons strengthened as the quarter went on.
In mid-June, the company launched Adobo Ranch, its first new dip since Queso Blanco. Zackfia’s work showed that this new item “seemed to yield both improved traffic and ticket given the associated upcharge.”
The company said its new dip would help boost sales, along with plans to increase its digital ad and marketing spend and other menu initiatives.
BMO analyst Andrew Strelzik recently upgraded the stock to Outperform and raised his price target to $65. In the note to clients, Strelzik said the company is “well positioned for accelerating [same-store sales] growth and improving margin trajectory beginning in the second half of 2025.”
Chipotle stock currently sits around $52 per share, down nearly 14% year to date, compared to a 7% gain for the S&P 500 (^GSPC).
Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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