Chipotle's (CMG) first-quarter results are expected to reflect the negative impact of inflation and other economic challenges in the U.S., Jeff Pierce, Senior Manager of Derivatives Trading at Charles Schwab said on the Schwab Network recently.

A chef plating up a wide variety of dishes for a restaurant chain.

CMG is due to report its Q1 results today after the market closes.

CMG's Performance Is Expected to Meaningfully Weaken

The restaurant operator's Q1 earnings per share are expected to only increase by 1 cent versus the same period a year earlier, while its revenue is expected to climb by 9% year-over-year.

Conversely, in 2024, its EPS jumped 24% YOY, while its top line climbed 15%, Pierce reported.

Moreover, analysts on average expect the firm's same-store sales to advance 1.3% YOY in Q1, compared with a gain of over 7% in 2024.

Finally, the company's traffic is expected to fall YOY for the first time since 2022.

 CMG Thinks It's Well-Positioned to Handle Tariffs

Chipotle has started to obtain more avocadoes from places other than Mexico, and it does not anticipate raising prices due to tariffs, Pierce reported.

The company thinks that tariffs "are more of a short-term issue," and it believes that its strong balance sheet and high cash reserves will help it effectively cope with the duties, Pierce noted.

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Disclosure: None. This article is originally published at Insider Monkey.