How Chipotle Plans To Bounce Back From Weak Sales And Hit $4M Per Store

The weakness in Chipotle Mexican Grill Inc's CMG sales is due to "macro softness rather than brand specific issues," according to TD Cowen.

The Chipotle Mexican Grill Analyst: Analyst Andrew Charles maintained a Buy rating and price target of $57.

The Chipotle Mexican Grill Thesis: Although the company is not immune to weakness in the industry, it has a "plan in place to return to positive traffic" in the back half of the year, Charles said in the note.

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Chipotle Mexican Grill's plan to accelerate trends in the latter half of the year includes the recently launched Adobo Ranch dip and higher advertising spending during Summer to "double the reach on social and streaming channels, where return on ad spend is higher than linear TV," he added.

The analyst stated that the company has also launched the Summer of Extras, aiming to boost the adoption of its loyalty program, which has 45 million members and 20 million 12-month active users.

The near-term sales softness is not due to execution and Chipotle Mexican Grill is "pursuing the right drivers" to encourage traffic in the near term and reach sales volumes of $4 million over the long term, he further wrote.

CMG Price Action: Shares of Chipotle Mexican Grill had risen by 1.28% to $52.04 at the time of publication on Wednesday.

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