Chipotle Mexican Grill CMG continues to see impressive traction in its digital sales, which represented a healthy 35.4% of total revenues in first-quarter 2025. The brand's mobile and online platforms continue to be a key driver of convenience and customer loyalty, even amid a broader consumer pullback. Yet beneath this digital strength lies a growing concern, has overall traffic hit a plateau?
Despite robust digital engagement, comparable restaurant sales declined 0.4% in the quarter. Management noted a clear slowdown in transactions, particularly starting in February, largely caused by macroeconomic uncertainty. Internal studies showed consumers cutting back on restaurant visits to save money, not due to dissatisfaction with the brand itself. Chipotle continues to rank high in perceived value and food quality.
Still, the softness in traffic, despite strong digital performance and a successful limited-time menu launch, signals a broader challenge. Digital growth alone may not be enough to offset waning in-store visits or capture incremental demand without sustained innovation and consumer incentives. Management acknowledged softness in its white-label ordering channel, even as marketplace apps remained steady.
To address the trend and reignite momentum, Chipotle is ramping up summer marketing, menu innovation and hospitality improvements. While the digital engine remains intact, the real test is whether these initiatives can translate to meaningful transaction growth in the second half.
For now, the digital channel is thriving, but the brand may need more than tech to keep traffic from topping out.
Competitors Lean Into Digital and Differentiation Amid Traffic Concerns
Chipotle’s rivals, Sweetgreen SG and CAVA Group CAVA, are also navigating the delicate balance between strong digital sales and slowing overall traffic. Both brands continue to expand aggressively and invest in digital channels, but each takes a distinct approach to attract and retain guests.
Sweetgreen, known for its tech-forward stores and emphasis on app-driven ordering, recently accelerated loyalty and digital rewards rollout to deepen engagement. However, like Chipotle, Sweetgreen has seen headwinds in traffic, particularly as office-related lunch routines remain inconsistent.
On the other hand, CAVA is leaning into menu innovation and high-frequency urban customers, supported by a strong digital mix that comprises more than 35% of sales. CAVA's focus on Mediterranean flavors and bold seasonal offerings has helped sustain interest, even in a cautious consumer environment.
Both brands signal that while digital remains essential, sustained traffic growth may ultimately hinge on menu novelty, personalization and perceived value.
CMG’s Price Performance, Valuation and Estimates
Chipotle’s shares have gained 16.4% in the past month against the industry’s decline of 0.2%.
Price Performance
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From a valuation standpoint, CMG trades at a forward price-to-sales ratio of 6.03X, significantly up from the industry’s 4.06X.
P/S (F12M)
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The Zacks Consensus Estimate for CMG’s 2025 and 2026 earnings implies a year-over-year uptick of 8% and 17.7%, respectively. The estimate for 2025 has remained unchanged in the past 30 days.
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Chipotle currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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