Second Consecutive Forecast Cut as Consumer Visits Drop
Chipotle Mexican Grill has lowered its outlook for same-store sales in 2025, expecting flat growth instead of the modest increase it previously anticipated. The revision comes after the fast-casual chain reported a second straight quarter of declining customer traffic, prompting investors to send the stock down 9% in after-hours trading.
While Chipotle’s net sales grew 3% to $3.06 billion, buoyed by new restaurant openings, same-store sales dropped 4% — steeper than both the previous quarter’s 0.4% decline and analysts’ forecasts of a 2.9% fall. The company also noted a 4.9% drop in foot traffic, only slightly cushioned by a 1% increase in the average check.
June Recovery Offers Glimpse of Optimism
CEO Scott Boatwright said traffic trends have started to improve since June, driven by new summer promotions and the successful rollout of its Adobo Ranch dip. “Exiting the quarter, we returned to positive comp and transaction trends, which have continued into July,” Boatwright noted during the company’s earnings call.
Despite weak performance earlier in the year due to macroeconomic pressure, holiday disruptions, and poor weather, Chipotle is standing by its long-term strategy. Executives maintain that the brand is capable of achieving mid-single-digit same-store sales growth and average restaurant volumes of $4 million annually.
Quarterly Earnings in Line, but Caution Persists
For the second quarter, adjusted earnings per share came in at 33 cents, matching expectations. Revenue slightly missed forecasts, coming in at $3.06 billion compared to the $3.11 billion consensus estimate. Net income declined to $436.1 million, or 32 cents per share, from $455.7 million, or 33 cents per share, a year ago.
The results reflect a broader slowdown in the fast-casual segment, which had seen strong performance last year. While some rivals continue to face similar headwinds, Chipotle’s strong brand and marketing campaigns have allowed it to rebound quicker, according to analysts tracking the sector.
Expansion Plans Remain on Track
Despite trimming its sales forecast, Chipotle reaffirmed plans to open between 315 and 345 new restaurants in 2025. Leadership emphasized its commitment to innovation, operational execution, and delivering positive experiences for both customers and employees as key drivers of long-term growth.
“There’s no smoking gun here that says we’ve had a misstep,” Boatwright said. “That gives us confidence to stay on strategy and innovate where we can to meet the consumer.”
