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Chipotle Mexican Grill lowered its sales forecasts for the third time this year as rising costs continue to push consumers to skip meals out, sending shares plummeting 13.8 per cent in after-hours trading.
“Persistent macroeconomic pressures” had cut into the burrito and bowls chain’s sales in the last quarter, chief executive Scott Boatwright said on Wednesday.
“[Consumers] feel the pinch and we feel the pullback as well,” Boatwright told analysts, adding that the chain had lost diners to grocery stores, not other restaurants.
Chipotle said it forecast comparable restaurant sales “declines in the low- single-digit range” over 2025, after initially estimating in February that its sales growth in this year would grow “in the low to mid-single-digit range.”
Fast-food executives had previously warned that rising cost pressures on low-income consumers weighed on their sales, but the pressure on fast- casual chain Chipotle indicates that middle- and higher-income consumers may also be paring back spending.
Chipotle saw a “massive pullback” from households with incomes under $100,000 who were now eating out less often, Boatwright said.
Chipotle’s reduced forecast comes amid what William Blair analyst Sharon Zackfia called a “broad restaurant slowdown” since September.
Foot traffic to fast-casual restaurants grew just 0.7 per cent in the third quarter, compared with a 1 per cent jump during the same period last year, according to mobile phone location intelligence firm Placer.ai.
Consumers reined in their spending on dining out amid lingering economic uncertainty and a four-week government shutdown that has left more than 1mn federal workers without pay.
Chipotle said its comparable restaurant sales returned to growth in the quarter ending in September, rising 0.3 per cent. The Newport Beach, California-based chain’s comparable sales had fallen in the two prior quarters.
Chipotle saw more visits than its peers in the third quarter, with traffic growing 1.8 per cent, according to Placer.ai.
Shares of Brinker International Inc, which owns bar and grill chain Chili’s, also fell 7.5 per cent Wednesday. The restaurant operator maintained its full-year guidance despite reporting higher than expected earnings in the quarter ending September 24, signalling that it too expects slower sales ahead.
