New York City – Chipotle Mexican Grill, a popular fast-casual dining chain, experienced a decline in quarterly revenue due to a decrease in same-store sales for the first time since 2020. The company attributed this decrease to factors such as a slowdown in consumer spending and adverse weather conditions impacting demand for their burritos and bowls. As a result, Chipotle revised their full-year same-store sales growth outlook, leading to a more than 5% drop in their stock price during extended trading.
Compared to Wall Street’s expectations, Chipotle reported earnings per share of 29 cents adjusted, slightly higher than the anticipated 28 cents. However, revenue fell short at $2.88 billion, below the expected $2.95 billion. Despite a 6.4% increase in net sales, same-store sales saw a 0.4% decline in the quarter, with restaurant transactions dropping by 2.3%. The chain only partially offset this decline with a 1.9% increase in average check.
CEO Scott Boatwright expressed confidence in Chipotle’s ability to bounce back, aiming for positive transaction comps by the second half of the year. In response to the challenging environment, the company emphasized their commitment to investing in their people, culinary offerings, value proposition, innovation, and overall growth. Chipotle now anticipates low single-digit same-store sales growth for the full year, a revision from their previous forecast of low- to mid-single digit growth.
Looking ahead, Chipotle maintains its plans to open between 315 and 345 new restaurants by the end of 2025. The company reported first-quarter net income of $386.6 million, or 28 cents per share, an increase from the previous year. When excluding stock-based compensation grants related to recent CEO transitions, Chipotle’s earnings per share stood at 29 cents. Despite current challenges, the company remains focused on strategic initiatives to drive future growth and profitability.