During the five-year period before they established their all-time record in June 2024, shares of Chipotle Mexican Grill (CMG +3.88%) put on a market-thumping performance. They soared 368% over that time period.
The Tex-Mex restaurant chain has been trying to win back investors. The departure of CEO Brian Niccol in August 2024, coupled with a slower top-line gain last year, hurt sentiment. Shares trade 51% below their peak (as of Aug. 18).
This growth stock recently gave investors some good news. Chipotle reported a same-store sales (SSS) increase of 2.2% in the second quarter (ended June 30). This marked an acceleration from the 0.5% gain from the first quarter. It's an encouraging reversal compared to the 1.7% decline posted for all of 2025.
Here's what this trend means for long-term Chipotle shareholders.
Image source: The Motley Fool.
Traffic trends appear to be stabilizing
For any restaurant or retailer, SSS is a key performance indicator. In Chipotle's case, it measures the change in revenue for locations that have been open for at least 13 months. At a high level, this single metric reveals how well existing stores are doing, stripping away the effect of new openings.
In 2025, Chipotle's SSS fell in three quarters. The exception came in the third quarter last year, when SSS rose by just 0.3%. Like many of its peers, the company was dealing with softer foot traffic as people wanted to find greater value at a time of elevated inflation.
With SSS accelerating, maybe Chipotle is back on track. In Q2, the 2.2% growth was driven by a 1% jump in transaction counts, indicating more visits to restaurants. Check sizes rose 1.2%.
Management even raised its guidance for the full year. The leadership team now expects SSS to grow in the low single digits in 2026, up from the previous forecast of SSS to be flat. What's particularly encouraging about this outlook is that it incorporates a 2% sales dip in the second half of July due to the cyclospora outbreak, even though this health scare affected zero Chipotle locations. A salmonella scare forced Chipotle to remove jalapeños nationwide in early August, causing a 10% price drop.
Chipotle was revered by the investor community because of its strong revenue and profit growth. It hit a rough patch last year, and the market has punished the stock. But the latest data suggests that traffic trends have stabilized and should steadily improve.
NYSE: CMG
Key Data Points
The bull and bear case
Since Chipotle's shares trade so far off their record, now is a good time for prospective investors to sharpen their pencils and take a closer look at the restaurant stock's prospects. The bull case is clear.
Chipotle has long operated with a strong industry position and value proposition, driven by its scale and brand. Its profitability is superb, with an operating margin of 14.3% over the last six months. The growth trajectory is also impressive -- management plans to open 350 net new stores per year going forward.
As the financial results over the past several quarters indicate, though, Chipotle is not immune to macroeconomic pressures. There are health risks to be mindful of as well that can affect consumer perception, even if they don't involve the business directly. Of course, the restaurant sector overall is arguably the most competitive industry.
Chipotle's stock is trading well below its peak. Investors can now own the company by paying a price-to-earnings ratio of 31.3. While this multiple is close to a five-year low, it's not cheap enough to drive interest from value investors.
According to consensus analyst estimates, Chipotle's earnings per share are projected to rise at a compound annual rate of 10.5% from 2025 to 2028. In the half-decade period before this forecast, diluted earnings per share (EPS) increased at an outstanding yearly clip of 35.4%, so there is a chance the business will surprise to the upside in the future.
Either way, investors might be hesitant to pay over 30 times profit for the stock.
