Fast-casual restaurant chain Chipotle Mexican Grill (NYSE: CMG) is seeing its stock price plummet this morning after reporting third-quarter 2025 earnings and a sales forecast that alarmed investors.
As of the time of this writing, CMG shares are down a staggering 19% to $32.21 in premarket trading. Here’s what you need to know about the company’s stock price crash.
What’s happened?
On Wednesday, Chipotle reported its Q3 2025 earnings after the bell. Some of what the company revealed has alarmed investors.
But first, here are the company’s most critical quarterly metrics:
- Total revenue: $3 billion (a 7.5% increase)
- Comparable restaurant sales: up 0.3%
- Operating margin: 15.9% (down 1% point)
- Adjusted diluted earnings per share: $0.29 (up 7.4%)
- Stores opened: 84
As noted by CNBC, Chipotle’s adjusted EPS of 29 cents matched investor expectations, and its $3 billion in revenue came close to the $3.03 billion expected by LSEG analysts.
However, while Chipotle’s main Q3 metrics largely met expectations, the company’s forecast led investors to dump the stock in the hours after it reported its latest earnings.
Full-year comparable sales expected to decline
Investors generally aren’t happy with only their expectations being met. They want unlimited growth into the future, too. A perceived lack of future growth can send investors fleeing—and that appears to be what is happening to Chipotle’s stock in premarket trading.
After reporting its relatively expected Q3 results, Chipotle issued its full fiscal 2025 forecast, revealing that it was cutting its sales outlook.
For the full fiscal year (the company is now in its Q4 2025), Chipotle says it expects “full year comparable restaurant sales declines in the low-single digit range.”
This is the third time in a row that the restaurant chain has cut its sales forecasts. Back in February, the company had initially said that it expected full-year sales to increase by low-to-mid single digits.
Why the gloomy outlook?
As for the factors affecting its lowered sales forecast, Chiptole CEO Scott Boatwright cited several reasons on the company’s investor call.
As consumer sentiment has declined “sharply” throughout the year, Chipotle stores have seen “a broad-based pullback in frequency” of customer visits, Boatwright said.
This is especially true for low- to middle-income customers, which Boatwright says include households earning less than $100,000, representing about 40% of Chiptole’s total customer base.
Boatwright says this segment of customers “is dining out less often due to concerns about the economy and inflation.”
However, another segment of Chipotle customers is also having a large negative impact on Chipotle’s revenue as they cut back on visits, too. This segment comprises younger people aged 25 to 35.
Boatwright says this cohort is facing particular economic challenges, leading them to pull back on discretionary spending. Those challenges include “unemployment, increased student loan repayment and slower real wage growth.”
“We believe that this trend is not unique to Chipotle,” Boatwright noted, “and is occurring across all restaurants as well as many discretionary categories.”
At the same time, Chipotle may rely more heavily on younger diners than other chains. “We tend to skew younger and slightly over-indexed to this group relative to the broader restaurant industry,” Boatwright said.
Forging ahead with new store openings
Despite projecting full-year 2025 sales declines, Chipotle says it will expand its physical store footprint significantly in 2026.
While the opening of new stores increases operational expenses, it could also help the company boost sales by expanding into new markets where no Chipotle stores exist or where the company is underrepresented.
In 2025, Chitpotle said it will open between 315 and 345 locations by the end of the fiscal year. In 2026, the company said it expects to open even more stores.
“We anticipate opening between 350 and 370 new restaurants,” Boatwright revealed. The CEO noted that these will include 10 to 15 new partner-operated restaurants outside of North America.
Countries where these restaurants are expected to open include South Korea, Singapore, and Mexico, as well as parts of the Middle East. Chiptole also expects to open one or two company-owned stores in Europe.
CMG share price plummets
But investors seem to care little about Chipotle’s continued expansion and are instead focused on the company’s lowered sales forecast.
As of the time of this writing, CMG shares have declined 19% in premarket trading to $32.21 per share. That’s a low that Chipotle’s stock price hasn’t seen since 2023.
As of yesterday’s share price close of $39.76, CMG stock had declined more than 33% since the beginning of the year.
At just above $32 per share in premarket trading this morning, Chipotle’s share price is now nearly half of what it was on the first trading day of 2025.