A customer carries a Chipotle bag in San Francisco, California, U.S., on Friday, January 31, 2025.
David Paul Morris | Bloomberg | fake images
Chipotle Mexican Grill on Wednesday it reported quarterly revenue that missed expectations and cut its same-store sales forecast for the third straight quarter.
The company’s shares plunged 13% in extended trading.
Chipotle expects its full-year same-store sales to decline by a low-single-digit percentage in fiscal 2025. That’s a big change from February, when the burrito chain projected same-store sales would grow by a low- to mid-single-digit percentage.
CEO Scott Boatwright said the company is experiencing “ongoing macroeconomic pressures.” Traffic fell 0.8%, the third consecutive quarter of declines.
After the chain outperformed the broader restaurant industry in 2024, the slow consumer environment finally affected its restaurants this year. Chipotle’s customer base skews higher income, so it was safe from the pullback in spending by low-income consumers that fast-food chains were reporting last year.
But now Chipotle is seeing consumers across all income groups visit less frequently. Consumers earning less than $100,000, who make up about 40% of the company’s customer base, have reduced their spending even further, Boatwright said. He added that the group dine out less frequently because of concerns about the economy and inflation.
Customers ages 25 to 35 face a special challenge, he said on the company’s earnings call.
“We tend to skew younger and slightly overindexed in this group compared to the restaurant industry as a whole,” Boatwright said.
He cited headwinds such as unemployment, rising student loan payments and slower growth in real wages explains inflation, that are harming that particular group of consumers.
“We’re not losing that customer. They’re just coming in less frequently,” Boatwright said.
Here’s what the company reported compared to what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: 29 cents adjusted, in line with expectations
- Revenue: $3 billion vs. $3.03 billion expected
Shares of the restaurant chain fell about 5% in extended trading.
Chipotle reported third-quarter net income of $382.1 million, or 29 cents per share, down from $387.4 million, or 28 cents per share, a year earlier.
Excluding slight adjustments for stock-based compensation grants and other items, the burrito chain still earned 29 cents per share.
Net sales rose 7.5% to $3 billion, driven by new restaurants. The company opened 84 company-operated stores and two international licensed stores.
Chipotle’s comparable sales rose 0.3%, reversing last quarter’s decline. But sales growth at restaurants open at least a year was driven by a 1.1% increase in average inquiries as traffic declined.
“While we saw encouraging results as we accelerated our marketing spend and launched carne asada and red chimichurri, our underlying trends remain in question throughout the quarter and into October,” said Chief Financial Officer Adam Rymer.
Boatwright defended the chain’s overall value proposition and said it would not resort to discounts to win back customers. However, he acknowledged that consumers are lumping the chain in with other fast-casual competitors, whose average prices are closer to $15 per entree than Chipotle’s roughly $10 price tag.
To reignite traffic growth, Chipotle is focusing on in-restaurant execution, marketing, digital experience and menu innovation, according to Boatwright.
Looking ahead to 2026, Chipotle plans to open between 350 and 370 new locations. That goal includes 10 to 15 partner-operated international restaurants as the company aims to expand globally.
Last month, Chipotle announced a joint venture with SPC Group, a Korea-based restaurant operator. It has also signed development agreements with operators in the Middle East and Latin America.
