Hard to swallow. That seems to be the three-word summary of the latest update from Chipotle Mexican Grill Inc (NYSE:CMG), which has been forced to contend with wavering consumer demand and rising economic pressure on diners.
Shares in the burrito chain, a former darling of the fast food sector, fell 10% in after-hours trading after it posted a second consecutive quarter of falling sales and downgraded its outlook for the year.
Same-store sales dropped 4% in the three months to June, worse than expected, with customer visits also declining by nearly 5%. The group now anticipates flat sales growth for 2025, having previously forecast an increase.
Revenue missed forecasts at $3.06 billion, while earnings matched expectations at $0.33 per share.
Chief executive Scott Boatwright said uncertainty among customers, especially those on lower incomes, was taking its toll, and acknowledged the chain needed to do more to communicate value.
Chipotle also flagged increased costs from tariffs, warning of further margin pressure ahead.