- Chipotle missed Wall Street’s third-quarter revenue expectations, reporting $3 billion against an expected $3.03 billion.
- For the third consecutive quarter, the company has cut its same-store sales forecast, now expecting a full-year decline.
- Customer traffic fell by 0.8%, marking the third straight quarterly drop in diner visits.
- Despite the downturn, Chipotle is planning an aggressive expansion, aiming to open 350 to 370 new locations in 2026.
Chipotle Mexican Grill is sounding the alarm for investors after a challenging third quarter, forcing the company to slash its same-store sales forecast for the third time in a row. The burrito giant, which has seen its stock tumble 33% this year, is now grappling with a persistent decline in customer traffic, signaling that even its typically resilient higher-income customers are feeling the pinch of economic pressures.
Financial Performance Under Scrutiny
In its latest earnings report, Chipotle announced third-quarter revenue of $3 billion, falling short of the $3.03 billion anticipated by Wall Street analysts. While the company met earnings expectations with an adjusted 29 cents per share, the revenue miss highlights a growing problem: fewer people are walking through its doors.
The company now projects that its full-year same-store sales for 2025 will shrink by a low-single-digit percentage. This is a stark reversal from the optimistic projections at the start of the year, when Chipotle anticipated low- to mid-single-digit growth.
The Persistent Drop in Diners
The core issue plaguing the chain is a steady decline in customer visits. Traffic fell by 0.8% in the third quarter, the third consecutive period of decline. Although same-store sales saw a minor increase of 0.3%, this growth was driven entirely by a 1.1% increase in the average check size, meaning customers are paying more, but fewer are showing up.
CEO Scott Boatwright directly addressed the issue, citing “consistent macroeconomic pressures” as a key factor. After outperforming the rest of the restaurant industry in 2024, Chipotle is no longer immune to the sluggish consumer environment that has impacted fast-food chains for over a year.
Chipotle’s Strategy for a Comeback
Despite the troubling trends, Chipotle’s leadership is not standing still. Boatwright outlined a multi-pronged strategy aimed at reviving traffic and strengthening the brand. The company plans to focus on four key areas:
- In-restaurant execution: Improving speed, service, and order accuracy.
- Marketing: Launching new campaigns to attract and retain customers.
- Digital experience: Enhancing its popular app and online ordering platforms.
- Menu innovation: Introducing new items to create excitement.
Aggressive Global Expansion on the Horizon
Looking ahead, Chipotle is betting big on expansion. The company announced ambitious plans to open between 350 and 370 new restaurants in 2026. This growth includes a significant international push, with 10 to 15 new locations planned through partnerships in the Middle East, Latin America, and Asia. This follows recent joint venture announcements with Korea-based SPC Group, signaling a clear intent to build a global footprint. During the third quarter alone, Chipotle opened 84 new company-operated locations.