TLDR
- Chipotle reported third quarter revenue of $3 billion, missing Wall Street estimates of $3.03 billion
- The company now expects full-year same-store sales to decline by a low single digit percentage in 2025
- Traffic dropped 0.8% for the third consecutive quarter as customers across all income levels visit less often
- Customers aged 25-35 are particularly challenged by unemployment, student loan payments and slower wage growth
- Operating margin fell to 15.9% from 16.9% due to higher beef and chicken costs
Chipotle shares dropped 13% in extended trading Wednesday after the burrito chain missed revenue expectations and lowered its full-year sales outlook for the third straight quarter.
Chipotle Mexican Grill, Inc., CMG
The company reported third quarter earnings of 29 cents per share, meeting analyst expectations. But revenue came in at $3 billion, below the $3.03 billion that Wall Street anticipated.
$CMG | Chipotle Mexican Grill | Q3 2025 Earnings Overview
• Revenue: $3.00B vs. $3.03B est — Slight miss as traffic slowed amid softer consumer spending.
• Adjusted EPS: $0.29 vs. $0.29 est — Inline with expectations.
• Operating Margin: 15.9% — Reflects modest pressure from… pic.twitter.com/vBFGOqYq3q— WOLF (@WOLF_Financial) October 29, 2025
Same-store sales increased just 0.3% in the quarter. That growth came entirely from a 1.1% increase in average check prices, while traffic fell 0.8%.
CEO Scott Boatwright said the company is facing “consistent macroeconomic pressures” that are affecting customer visits. This marks the third consecutive quarter of traffic declines for the chain.
Younger Customers Cutting Back
The company’s customer base between ages 25 and 35 is especially struggling right now. Boatwright explained that this group faces headwinds from higher unemployment, increased student loan repayments and slower real wage growth when accounting for inflation.
“We tend to skew younger and slightly over-indexed to this group relative to the broader restaurant industry,” Boatwright said on the earnings call. He stressed that Chipotle isn’t losing these customers permanently, they’re just coming in less frequently.
Customers earning under $100,000 per year, who make up roughly 40% of Chipotle’s customer base, have pulled back their spending even more. This group is dining out less often due to concerns about the economy and inflation.
After outperforming competitors in 2024, the sluggish consumer environment finally caught up with Chipotle this year. The chain’s higher-income customer base previously insulated it from the spending pullback that hit fast-food restaurants last year.
But now consumers across all income levels are visiting less frequently. It’s a shift that caught some by surprise given Chipotle’s historically resilient customer base.
Operating Costs Rise
Operating margin dropped to 15.9% from 16.9% in the prior year period. Higher beef and chicken costs pressured the bottom line despite price increases.
The company opened 84 company-operated locations and two licensed international stores during the quarter. Net sales rose 7.5% to $3 billion, driven primarily by those new restaurant openings.
CFO Adam Rymer acknowledged that underlying trends remained challenging throughout the quarter and into October. The company did accelerate marketing spending and rolled out carne asada and red chimichurri, which showed “encouraging results.”
Boatwright said the chain won’t turn to discounting to bring customers back. He defended Chipotle’s value proposition but acknowledged that consumers are lumping the chain in with other fast-casual competitors whose prices average around $15 per entree.
Chipotle’s average price point sits closer to $10 per entree. The company plans to focus on in-restaurant execution, marketing, digital experience and menu innovation to revive traffic growth.
In February, Chipotle projected same-store sales would grow by a low to mid single digit percentage for the full year. That guidance has been revised downward twice since then.
The company now expects full-year same-store sales to fall by a low single digit percentage in fiscal 2025. It’s a dramatic reversal from the growth expectations set at the start of the year.
Looking ahead to 2026, Chipotle plans to open 350 to 370 new locations. That target includes 10 to 15 international restaurants operated by partners as the company pursues global expansion.
Last month the company announced a joint venture with SPC Group, a Korea-based restaurant operator. It has also signed development deals with operators in the Middle East and Latin America.
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