Better Growth Stock to Buy Now: Chipotle or Texas Roadhouse?

Core Insights - Chipotle Mexican Grill and Texas Roadhouse have experienced stock declines, with Chipotle down approximately 35% year-to-date and Texas Roadhouse down 5% [2] - Despite negative market sentiment, both companies are expanding and maintaining strong brand loyalty [2] Chipotle Mexican Grill - Chipotle's Q2 revenue increased by 3% year-over-year to around $3.1 billion, but comparable restaurant sales fell by 4% due to a 5% decline in transactions [5] - The company opened 61 new restaurants in Q2, with plans for 315 to 345 openings in 2025, primarily featuring Chipotlanes [6] - Chipotle's stock trades at a price-to-earnings multiple of 35, which is higher than many full-service peers, and management has increased buyback authorization by $500 million [7][8] Texas Roadhouse - Texas Roadhouse reported a 12.7% increase in Q2 revenue to about $1.5 billion, with comparable sales rising by 5.8% and earnings per share growing by 4% to $1.86 [9] - The company is experiencing positive traffic across its brands and expects a 5% increase in its total restaurant base for 2025 [10][11] - Texas Roadhouse offers a dividend yield of approximately 1.7%, which adds to its attractiveness [11] Comparative Analysis - Texas Roadhouse shows a more favorable growth profile with rising comparable sales driven by traffic, while Chipotle is guiding for flat comparable sales [13] - The price-to-earnings multiple for Texas Roadhouse is in the mid-20s, significantly lower than Chipotle's mid-30s, making it a more attractive investment at current prices [13] - Both companies are investing in growth, but Texas Roadhouse's disciplined unit growth and positive traffic trends provide a stronger investment case [15]