Restaurant check: Sweetgreen, CAVA, and Wingstop follow Chipotle lower

The restaurant sector was jolted on Thursday as investors sized up Chipotle's (NYSE:CMG) soft Q2 earnings report.

The fast-casual chain reported same-store sales fell 4%, driven mainly by a 4.9% drop in transactions. Revenue still edged up 3% year-over-year to $3.1 billion, aided primarily by new restaurant openings. Restaurant-level margin slipped to 27.4%, down 150 basis points from the prior year. Despite sequential improvement in June and July due to stronger marketing, ongoing volatility led Chipotle (NYSE:CMG) to lower its full-year guidance to an outlook for flat comparable sales.

During the earnings conference call, Chipotle (CMG) Chief Executive Scott Boatwright pointed to ongoing volatility and the consumer environment as headwinds.

Sweetgreen (NYSE:SG) fell 11.8% in Thursday afternoon trading to more than erase a strong gain on Wednesday when traders were snapping up names with a high level of short interest outstanding on them.

Elsewhere within the restaurant sector, Portillo's (PTLO) fell 7.4%, First Watch Restaurant Group (FWRG) slid 6.1%, CAVA Group (NYSE:CAVA) peeled off 5.6%, and Wingstop (NASDAQ:WING) declined 5.5% as investors sized up the Chipotle (CMG) update.