Chipotle tumbles on weak sales outlook as younger consumers pull back on burritos and bowls
Chipotle plunged more than 19% in premarket trading on Thursday after the company cut its annual sales forecast for the third time this year, warning that spending weakness could persist through 2026.
The burrito chain now expects same-store sales to fall by a low single-digit percentage in 2025, down from its July guidance for flat sales and its February projection for “low to mid-single digit” growth.
Third-quarter revenue rose 7.5% to $3 billion, helped by new restaurant openings, but still shy of the $3.03 billion estimate. Adjusted earnings per share came in at $0.29, broadly in line with Wall Street’s expectations.
Same-store sales rose 0.3% year over year, reversing last quarter’s decline but still missing the 1.36% analysts expected. And it was further bad news on the traffic front, as footfall to Chipotle’s restaurants fell 0.8%, marking the third straight quarterly drop.
Young people these days
CEO Scott Boatwright said low- and middle-income diners — who make up about 40% of sales — along with younger adults (aged 25-35) are eating out less amid economic uncertainty, inflation, and higher unemployment.
Tariffs and surging beef costs have also pressured profitability, with Chipotle’s restaurant-level margin falling to 24.5% from 25.5% last year. CFO Adam Rymer said the company will take a “slow and measured approach” to pricing next year rather than “fully offset” cost increases, despite ongoing pressures on margin.
Looking ahead, the company expects to open 350 to 370 new restaurants next year, including 10 to 15 international locations via partnerships. Chipotle is also “doubling down on restaurant execution,” Boatwright said in yesterday’s statement, while boosting marketing spend and creating more sides, dips, and three to four limited-time proteins, as customers who buy such items visit and spend more later.
With today’s drop, Chipotle’s shares are down over 47% year to date.
Third-quarter revenue rose 7.5% to $3 billion, helped by new restaurant openings, but still shy of the $3.03 billion estimate. Adjusted earnings per share came in at $0.29, broadly in line with Wall Street’s expectations.
Same-store sales rose 0.3% year over year, reversing last quarter’s decline but still missing the 1.36% analysts expected. And it was further bad news on the traffic front, as footfall to Chipotle’s restaurants fell 0.8%, marking the third straight quarterly drop.
Young people these days
CEO Scott Boatwright said low- and middle-income diners — who make up about 40% of sales — along with younger adults (aged 25-35) are eating out less amid economic uncertainty, inflation, and higher unemployment.
Tariffs and surging beef costs have also pressured profitability, with Chipotle’s restaurant-level margin falling to 24.5% from 25.5% last year. CFO Adam Rymer said the company will take a “slow and measured approach” to pricing next year rather than “fully offset” cost increases, despite ongoing pressures on margin.
Looking ahead, the company expects to open 350 to 370 new restaurants next year, including 10 to 15 international locations via partnerships. Chipotle is also “doubling down on restaurant execution,” Boatwright said in yesterday’s statement, while boosting marketing spend and creating more sides, dips, and three to four limited-time proteins, as customers who buy such items visit and spend more later.
With today’s drop, Chipotle’s shares are down over 47% year to date.
