Chipotle adjusts sales forecast due to declining customer traffic

Chipotle adjusts projections as customer visits fall for the second quarter.

Chipotle lowers sales forecast amid declining customer traffic

Chipotle Mexican Grill announced a lower forecast for same-store sales growth after experiencing a decline in customer traffic for two consecutive quarters. The chain anticipates flat sales growth for 2025, down from earlier expectations of low-single-digit growth. Although shares have fallen 13% this year, CEO Scott Boatwright indicated a potential turnaround starting in June, attributed to summer promotions and a new Adobo Ranch dip. Despite a greater drop in same-store sales of 4%, which surpassed previous estimates, the company's net sales rose 3% to $3.06 billion, signaling growth from new restaurant openings. Chipotle remains optimistic about long-term growth, believing it can return to mid-single-digit sales increases.

The recent adjustments by Chipotle highlight the challenges facing the restaurant industry as economic uncertainties shift consumer spending habits. Despite a strong brand presence and efforts to attract diners through promotions, the company's inability to maintain steady growth underscores the pressures of a competitive market. Chipotle's focus on innovation and improving customer experiences may offer a pathway to recovery. However, the decline in traffic raises questions about whether these strategies will suffice in an environment where consumers are becoming increasingly cautious with their discretionary spending.

Highlights

As Chipotle navigates these challenges, its ability to innovate will be key to regaining customer loyalty.