Chipotle set to report third quarter earnings, looks to reverse sales slide with stock down 30% this year

Chipotle (CMG) is set to report third quarter results after the market close on Wednesday as it looks to end a run of sales declines and stabilize the story for investors with the stock down over 30% so far this year.

The company is expected to report adjusted earnings per share of $0.29 on revenue of $3.02 billion in the quarter, according to data from Bloomberg. This would mark a roughly 7% rise in adjusted EPS and an 8.6% rise in revenue over the prior year.

Same-store sales are expected to see a slight uptick, rising 1% after logging a 4% decline in the second quarter. Higher menu prices, forecast to be up nearly 2%, are expected to offset lower foot traffic, down about 0.4%.

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Following its second quarter results, published in July, CEO Scott Boatwright told investors that "ongoing volatility in our trends in the consumer environment" prompted the company to cut its full-year same-store sales forecast. That marked its second forecast cut of the year.

In July, the company said it expects flat full-year same-store sales, down from the increase in the low-single-digit range it had expected in April. Ahead of Wednesday's report, analysts expect same-store sales to fall 0.7% for the fiscal year, indicating investors are braced for another guidance reduction from the company on Wednesday.

"We believe myriad factors have contributed to the comp [same-store sales] slowdown this year," William Blair analyst Sharon Zackfia wrote in a note to clients, "including a broadening of weakness among low-income consumers, recent increases in young adult unemployment, and lesser throughput gains following a year of notable improvement in 2024."Sign at the entrance to a Chipotle store in midtown Manhattan. (Erik McGregor/LightRocket via Getty Images)·Erik McGregor via Getty Images

In June, the chain also introduced its first new dip in five years, Adobo Ranch, but that might not have provided the boost to its value proposition that the company hoped for.

Zackfia added, "Our suspicion is Chipotle also has to regain some ground on the value front, for which items like $1 sauce add-ons might be working against the concept."StockStory aims to help individual investors beat the market.

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at [email protected].

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