By Evie Liu

News that Chipotle Mexican Grill plans to enter the Mexican market and is looking to expand into other Latin American markets hasn't been enough to lift the stock on an ugly day on Wall Street.

The stock dropped 5% on Monday as the S&P 500 lost 2.8% in the latest wave of selling linked to fears about tariffs and whether they will drive the U.S. economy into a recession.

Many fast-casual restaurants with high valuations, including Chipotle, have seen their stocks drop as investors worry if they can maintain the strong growth seen in recent years. Shares of Cava Group lost 8% on Monday, while Sweetgreen was down 10% and Wingstop slid nearly 6%.

Chipotle is expected to report its result for the first quarter on Wednesday, before the market opens.

Mexican consumers' affinity for fresh food and familiarity with the ingredients Chipotle uses make it an attractive growth market for the burrito chain, Nate Lawton, the company's chief business development officer, said in a statement. The company declined to comment further, saying it is in a quiet period ahead of its earnings report.

Although Chipotle offers Mexican-style food, it was founded in Denver. Its headquarters are in Newport Beach, Calif.

Chipotle has formed a partnership with restaurant operator Alsea for the expansion. In 2023, the chain reached its first international development agreement with Alshaya Group, a different operator, for restaurants in the Middle East. It also has restaurants in Canada, the U.K., France, and Germany.

Chipotle currently operates more than 3,700 restaurants and plans to open between 315 and 345 stores this year. Over the long term, the company plans to reach more than 7,000 locations in the U.S. and Canada.

The restaurant chain has been able to maintain growth in same-store sales even though inflation has left consumers with less money to spend. Continuous store openings have further fueled its growth. In the fourth quarter of 2024, it posted 13% growth in total revenue and a 19% increase in earnings per share.

Write to Evie Liu at evie.liu@barrons.com

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April 21, 2025 13:37 ET (17:37 GMT)

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