Chipotle Mexican Grill (CMG) shares fell sharply on Thursday morning after the company reported its second consecutive quarter of declining sales and lowered its full-year outlook.
The fast-casual chain released its second-quarter results late Wednesday, reflecting continued pressure from a challenging consumer environment and internal leadership transition.
Same-store sales fell 4% in Q2, a steeper drop than the 2.9% decline analysts had anticipated, according to Bloomberg data. Traffic also declined more than expected, down 4.9% versus a projected 4.4% drop. That marks an acceleration from the 2.3% decline in the first quarter—the company’s first dip in foot traffic since 2022.
Ahead of the market open, Chipotle shares tumbled more than 12%.
The company also trimmed its full-year outlook. It now expects flat same-store sales growth for the year, a downgrade from its previous forecast of growth in the low-single-digit range. Analysts had projected a 0.8% increase before the latest earnings release.
CEO Scott Boatwright attributed the cut to “ongoing volatility in our trends in the consumer environment.”
Adjusted earnings came in at $0.33 per share, matching analyst expectations. Revenue, however, fell short at $3.06 billion, below the $3.11 billion consensus.
“We did see some share loss in the April-May time frame as the low-income consumer pulled back, but we’re back to share gains yet again in June-July,” Boatwright said on the earnings call.
He added, “trending along with the macro and consumer sentiment at this point, and so I don’t have overarching fears.”
However, Boatwright acknowledged that Chipotle’s value messaging isn’t resonating as strongly as it did a year ago. “We’ve got to figure out a way we can communicate value for the consumer and showcase the value we are to QSR and fast casual,” he said. “There’s more work to do there, and that’s what we’ll lean into in the back half of the year.”
Boatwright also said the company anticipates a return to positive transaction growth in the second half of 2025.
Tariffs are expected to increase Chipotle’s cost of sales by 0.5% on an ongoing basis, with an additional 0.4% impact projected for the third quarter.
In product news, Chipotle introduced Adobo Ranch in mid-June, its first new dip since Queso Blanco. William Blair analyst Sharon Zackfia noted ahead of the report that the item “seemed to yield both improved traffic and ticket given the associated upcharge.”
Despite the recent softness, Chipotle remains focused on regaining momentum as it navigates shifting consumer trends and macroeconomic headwinds.
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