Chipotle Tumbles Following Revenue Miss

By Trey Thoelcke Published Jul 20, 8:31AM EDT

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Shares of Chipotle Mexican Grill (NYSE: CMG) have plunged more than 18% in premarket trading Friday, following Thursday’s second-quarter report that indicated a slowdown in customer traffic growth.

The fast-casual restaurant operator reported that net income rose to $81.7 million, or $2.56 per share, compared with $50.7 million, or $1.59 per share, in the same quarter a year earlier. And revenue rose 20.9% year-over-year to $690.9 million. While the bottom line beat consensus estimates, the top line fell short of expectations.

Slower U.S. consumer spending have hurt the company’s sales as the year proceeds. And the severe drought in the United States likely will increase food costs later this year and next.

This morning, UBS lowered its price target on Chipotle to $355 from $443 following Q2 results, citing expectations for weaker same-store sales growth and rising food costs.

Chipotle was the best-performing restaurant stock in the Standard & Poor’s 500 Index last year, a standard it may be unable to live up to this year. It closed Thursday at $403.86. Year to date, the stock is more than 18% higher — so far.

About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.