Chipotle Mexican Grill (CMG) is currently facing significant challenges, with its shares down over 30% in the past year, contrasting sharply with the S&P 500’s 25% gain. In the latest reporting period, comparable restaurant sales fell 2.5% year-over-year, despite a 4.9% increase in overall sales, likely driven by the opening of 132 new locations.
The company’s restaurant operating margins dropped to 23.4%, down from 24.8% in the previous year. These declining margins and weak sales growth in established locations have led analysts to issue bearish earnings estimate revisions, resulting in a Zacks Rank of #5 (Strong Sell) for Chipotle.
