Overview
- Chipotle reported third-quarter comparable sales up 0.3% with restaurant-level margin down to 24.5% and now forecasts low-single-digit comparable-sales declines for 2025.
- CEO Scott Boatwright said guests ages 25 to 35 and households under $100,000 in income are visiting less and choosing groceries, noting this group accounts for roughly 40% of sales.
- Shares slumped following the disclosure as investors braced for broader fast-casual weakness, with Sweetgreen and Cava also sliding ahead of their reports.
- Supporting data include a 9.2% unemployment rate for 20- to 24-year-olds in August, surveys showing younger consumers plan to cut restaurant spending, and Fed commentary on a bifurcated consumer.
- Chipotle is rolling out targeted promotions and student rewards such as Chipotle U, adding digital games for deals, and retraining staff on accuracy and cleanliness as some analysts trim forecasts and price targets.