Chipotle is seeing a ‘slowdown’ in consumer spending as 2025 gets off to a rough start
Chipotle Mexican Grill on Wednesday reported weaker-than-expected quarterly revenue after its same-store sales declined for the first time since 2020.
Executives cited both a slowdown in consumer spending and adverse weather as two of the factors that dampened demand for its burritos and bowls.
The company also lowered the top end of its outlook for full-year same-store sales growth.
Chipotle shares fell more than 2% in extended trading. The stock closed up 3.5% earlier on Wednesday.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: 29 cents adjusted vs. 28 cents expected
- Revenue: $2.88 billion vs. $2.95 billion expected
Net sales rose 6.4% to $2.88 billion.
The chain’s same-store sales fell 0.4% during the quarter, short of the 1.7% growth projected by StreetAccount estimates. Restaurant transactions fell 2.3% and were only partially offset by a 1.9% increase in average check.
Customers started pulling back their spending in February because of economic uncertainty, CEO Scott Boatwright told analysts on the company’s conference call.
“We could see this in our visitation study, where saving money because of concerns around the economy was the overwhelming reason consumers were reducing the frequency of restaurant visits,” he said, adding that the traffic slowdown has continued into April.
The spring months typically kick off what Chipotle calls “burrito season” — the busiest time of the year for the chain, from Easter through May. But the holiday landed several weeks later this year, delaying the usual seasonal increase in demand, although the limited-time launch of its chipotle honey chicken helped sales in March.
Chipotle’s sales usually slow during the summer months as college students return home and many customers travel internationally.
The company does not expect traffic to its restaurants to grow until the second half of the year.
“I am confident that we have a strong plan to return to positive transaction comps by the second half of the year, and during these uncertain times, we will continue to invest in the things that make Chipotle a special brand — our people, culinary, value proposition, innovation and growth,” Boatwright said in a statement.
For the full year, Chipotle is now projecting same-store sales will grow by low single digits. Previously, it was forecasting same-store sales growth in the low- to mid-single-digit range.
“Looking forward, our marketing team has an enhanced plan for this summer and the remainder of the year to make Chipotle more visible, more relevant and more loved,” Boatwright said.
Chipotle is also projecting higher inflation in the second quarter, fueled by the White House’s tariffs on aluminum and a broad 10% import duty. Roughly half the company’s avocado supply comes from outside of Mexico, for example.
Chipotle Chief Financial Officer Adam Rymer estimated that tariffs will add 50 basis points, or 0.5%, to its cost of sales on an ongoing basis. In the second quarter, the tariffs are expected to hit its cost of sales by 20 basis points, or 0.2%, due to the company’s inventory before the duties were implemented.
“These estimates do not include any impact from the tariffs that were postponed, or the 25% tariffs on Mexico and Canada since our imports fall under the [U.S.-Mexico-Canada Agreement] exemption,” Rymer said.
The company reiterated its plans to open between 315 and 345 new restaurants by the end of 2025.
Chipotle reported first-quarter net income of $386.6 million, or 28 cents per share, up from $359.3 million, or 26 cents per share, a year earlier.
Excluding stock-based compensation grants tied to its recent CEO transition, the company earned 29 cents per share.