Chipotle Restaurant in San Francisco on January 31, 2025.
David Paul Morris | Bloomberg | Getty Images
Chipotle Mexican Grill The forecast for same-store sales growth this year has been lowered after a second straight quarter of traffic decline.
The burrito chain now expects flat sales growth in same-store sales compared to previous forecasts of low single-digit percentage increases. Chipotle trimmed its same-store sales prospects for the second consecutive quarter.
But the company said sales trends are changing. Starting in June, customers have been back at Chipotle restaurants due to its summer promotion and the launch of Adobo Ranch DIP, CEO Scott Boatwright said on CNBC’s CNBC. “Close the clock: Overtime.”
The company’s shares fell 10% in expansion trading.
According to an LSEG survey of analysts, the company reported its second quarter reports.
- Earnings per share: Adjusted for 33 cents based on expectations
- Revenue: $3.06 billion versus $31.1 billion expected
Chipotle’s net sales rose 3% to $3.06 billion due to its new restaurant. However, the company’s same-store sales shrank by 4%, down 0.4% from the previous quarter, and the street estimates fell 2.9% in the second quarter. The average inspection increased by about 1%, partially offsetting the 4.9% drop in traffic.
Last year, Chipotle surpassed the rest of the restaurant industry, shocking the trend of sluggish sales and declining traffic. But by the end of December, the company began to see softer sales, with executives going all the way to Christmas and New Year’s Eve. The weather in January, including wildfires in California, and a wider consumer decline in February, continued into the spring.
During the company’s first-quarter earnings call, Boatwright said diners’ concerns about the economy have caused them to skip visits to restaurants and save money.
According to Boatwright, May is another tough month for Chipotle, paralleling the decline in consumer sentiment during the same period. However, by June, same-store sales began to increase again.
“When we exited the quarter, we were back to positive compensation and trading trends that continued until July,” Boatwright told analysts on a company conference call.
Later, he reiterated the company’s belief that it could restore the growth of same-store sales in the middle digits in the long run and earn an average unit volume of $4 million in restaurants.
Chipotle reported second-quarter net income of $436.1 million, or 32 cents per share, down from $455.7 million or 33 cents a year ago.
The company does not include impairment fees, legal fees and other items, at 33 cents per share.
Chipotle reiterated its forecast that it will open between 315 and 345 new restaurants this year.
