Chipotle Mexican Grill (CMG) recently reported its third-quarter financial outcomes, which fell short of market expectations, causing a notable downturn in its stock performance. This shortfall has prompted various financial analysts to re-evaluate their outlooks for the company. The core issue appears to be a surprising drop in customer traffic and weaker-than-anticipated same-store sales, signaling potential difficulties for the popular restaurant chain in the coming months.
Chipotle's Q3 Performance and Analyst Reactions
On October 30, 2025, Chipotle Mexican Grill's stock experienced a significant drop following the release of its third-quarter results. The company reported a mere 0.3% growth in same-store sales, considerably below the consensus estimate of 0.6%. This underperformance was further exacerbated by a surprising 0.8% decline in customer traffic, a figure that analyst Peter Saleh from BTIG noted as a \"confounding problem\" not attributable to affordability issues. Saleh, while reiterating a Buy rating, reduced his price target from $57 to $45, reflecting the immediate challenges.
KeyBanc Capital Markets analyst Eric Gonzalez maintained an Overweight rating but also adjusted his price target from $52 to $45. Gonzalez highlighted that same-store sales trends continued to weaken into October, potentially entering a low-single-digit negative range. Chipotle's management indicated that negative same-store sales growth might persist into the first quarter of 2026, alongside a margin outlook that did not meet expectations.
TD Cowen's Andrew Charles reaffirmed a Buy rating but lowered his price target from $45 to $40. Charles attributed the weaker-than-expected sales headwinds in September and October to \"weakening Gen Z financial health,\" leading to a guidance for the fourth quarter suggesting a low-to-mid single-digit decline in same-store sales. He suggested that the soft performance allowed management to temper expectations for 2026, placing shares \"in the penalty box\" until the fourth-quarter results are released in February.
Meanwhile, Jim Salera from Stephens maintained an Equal-weight rating with a price target of $48. He pointed out that while same-store sales missed forecasts, the reported adjusted earnings of 29 cents per share were also below the consensus. Furthermore, management revised its fiscal 2025 same-store sales guidance to a low-single-digit decline, a significant shift from earlier projections of flat growth. This marks the third consecutive quarter that Chipotle has lowered its comparable sales guidance, underscoring a persistent struggle to meet financial targets.
As a direct consequence of these announcements, Chipotle Mexican Grill shares plummeted by 18.23% to $32.51 by Thursday's publication time, reflecting investor apprehension regarding the company's immediate future and its ability to reverse the current negative trends.
This recent earnings report serves as a stark reminder of the volatile nature of the market, particularly for consumer-facing businesses. Chipotle's struggle with declining traffic and sales, despite its strong brand presence, highlights the importance of adapting to evolving consumer behaviors and economic pressures. It underscores the need for companies to not only innovate but also to effectively communicate their strategies to regain investor confidence during challenging periods. For consumers, it might signal potential shifts in pricing or offerings as the company seeks to revitalize its performance.