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Reuters/Kevin Lamarque
Hotter than the golden arches.
DIVERGENT PATHS

The gap between Chipotle’s success and McDonald’s woes is wider than ever

Eight years after McDonald’s let Chipotle go, the contrast between the two restaurant chains still serves as a reminder of America’s changing tastes for fast food. As Chipotle grows, McDonald’s slumps… old news by now, we suppose. But the companies’ earnings reports this week reveal a sudden widening of the gap.

Chipotle’s same-store sales were up by a whopping 19.8% this past quarter versus last year’s, while comparable sales at McDonald’s US outlets dipped by 3.3%, the weakest in a stretch of multiple quarters of declining same-store sales.

A record quarter for profit growth at Chipotle coincides with severe shrinking at McDonald’s, where net income is down 30%.

It’s the same story with earnings per share.

Whether these two will keep growing apart is hard to say, given that Chipotle doesn’t expect to reel in sales at such a dramatic pace in 2015, and McDonald’s is hoping for nothing less than a dramatic turnaround of its own sales. One supposes, however, that it will take more than a couple quarters for McDonald’s to recover from the very bad year it’s been having.

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