What Happened?
Shares of mexican fast-food chain Chipotle (NYSE: CMG) fell 2.6% in the afternoon session after the Trump administration's announcement of new global tariffs, reignited trade policy uncertainty. The move came swiftly after the Supreme Court ruled the previous week that the president could not use the International Emergency Economic Powers Act (IEEPA) for such duties, a decision that had initially sent markets higher. However, the administration invoked a different authority, the Trade Act of 1974, to impose a 15% global tariff for up to 150 days. The rapid reimposition of trade barriers creates significant uncertainty for companies across multiple sectors that depend on international supply chains and global trade. Investors are now weighing the potential impact of these new duties on corporate earnings and broader economic activity.
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What Is The Market Telling Us
Chipotle’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 16.5% on the news that the company reported third-quarter results that were in line with expectations but cut its full-year sales forecast, citing "persistent macroeconomic pressures.". The fast-casual chain’s third-quarter revenue of $3.00 billion came in slightly below Wall Street estimates, while its adjusted earnings per share of $0.29 met expectations. Same-store sales, a key metric for restaurants, were roughly flat compared to the prior year, a significant slowdown from the 6% growth in the same quarter last year. The main concern for investors was the company's revised outlook for the full year. Chipotle now expects same-store sales to see "declines in the low-single digit range," a downgrade from its previous forecast of flat performance. This lowered guidance overshadowed the otherwise in-line results, signaling concerns about future growth.
Chipotle is down 2.4% since the beginning of the year, and at $36.58 per share, it is trading 37.2% below its 52-week high of $58.24 from June 2025. Investors who bought $1,000 worth of Chipotle’s shares 5 years ago would now be looking at an investment worth $1,291.
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