Core Viewpoint - Chipotle Mexican Grill is experiencing a decline in customer traffic and comparable-store sales, raising questions about whether this dip presents a buying opportunity or signals deeper issues for investors [1][2][10]. Sales Performance - The company reported a 0.4% decline in comparable-restaurant sales in Q1, followed by a 4% decline in Q2, with transactions down 4.9% despite a 0.9% increase in average check size [3][5]. - Chipotle's revenue grew by 3% to $3.06 billion in the quarter, while adjusted earnings per share (EPS) fell by 3% to $0.33, missing analyst expectations [6]. Operational Challenges - Restaurant-level operating margins decreased by 150 basis points to 27.4%, attributed to higher wage costs and sales deleveraging, with about 30% of restaurants needing retraining on portion sizes [7][8]. - The company has acknowledged a particularly weak performance in May but noted a rebound in June due to new product offerings and promotional programs [4][5]. Future Outlook - Chipotle has lowered its full-year same-store sales outlook to flat, down from previous expectations of low single-digit growth, but maintains a long-term goal of mid-single-digit growth [5]. - The company aims to return restaurant-level margins to the 29% to 30% range and drive average unit volumes above $4 million [8]. Growth Potential - Chipotle is still in the early stages of international expansion and believes it can increase U.S. locations at an annual rate of 8% to 10% [12]. - Despite current challenges, the long-term growth story remains intact, with continued consumer interest in its core menu and limited-time offerings [14]. Valuation - The stock trades at a forward price-to-earnings (P/E) multiple of approximately 38 based on 2025 estimates and 32 based on 2026 estimates, indicating it is relatively cheaper than in previous years [13].