Chipotle Stock Crashes After Cutting Sales Forecast Amid Weak Traffic

Shares of Chipotle Mexican Grill plummeted nearly 19% in morning trading after the company cut its full-year same-store sales forecast for the third consecutive quarter. The burrito chain’s stock has fallen 45% this year, erasing $43 billion from its market value.

Reasons Behind the Forecast Cut

• Declining Traffic: Chipotle’s traffic fell 0.8% in the third quarter, with customers aged 25-35 particularly affected by rising unemployment, resumed student loan payments, and sluggish wage growth.
• Inflation and Tariffs: The company expects mid-single-digit inflation to persist into 2026, driven by tariffs and rising beef costs.
• Value Perception: Chipotle’s pricing strategy is under scrutiny, with consumers assuming its average prices are closer to $15 entrees of its fast-casual peers, rather than its actual average price of around $10.

Analyst Reactions

• Citi Analyst Jon Tower: Cut his price target from $54 to $44 per share, citing difficulty in calling a bottom for sales given the multitude of factors weighing on demand.
• BTIG Analyst Pete Saleh: Expressed surprise at the magnitude of traffic weakness and questioned whether affordability concerns are the main driver.

Impact on Stock Price

Chipotle’s stock price has been volatile, with at least five Wall Street analysts cutting their price targets after the report. The company’s market value has dropped to roughly $43 billion.

Chipotle Mexican Grill’s stock price plummeted nearly 19% after the company cut its full-year same-store sales forecast for the third consecutive quarter. The burrito chain’s shares have fallen 45% this year, erasing $43 billion from its market value. Here’s what’s happening ¹ ²:

• Sales Forecast Cut: Chipotle expects same-store sales to decline in the low-single-digit range for 2025, compared to the previous forecast of about flat sales.
• Traffic Decline: The company saw a 0.8% decline in traffic in Q3, with customers aged 25-35 particularly affected by rising unemployment, resumed student loan payments, and sluggish wage growth.
• Value Perception: Analysts question whether Chipotle’s pricing strategy is deterring customers, as the company’s average price point is around $10, while consumers assume it’s closer to $15.
• Market Reaction: At least five Wall Street analysts have cut their price targets for Chipotle’s stock, citing concerns about the company’s ability to navigate tariffs, inflation, and shifting consumer spending habits.

Key Financial Metrics:

• Market Capitalization: $43 billion (down 45% this year)
• Price-to-Earnings Ratio: 30.14
• 52-Week Range: $31.01 – $66.74

Analyst Outlook:

• Citi Analyst Jon Tower: Cut his price target from $54 to $44 per share, citing difficulty in calling a bottom for sales.
• BTIG Analyst Pete Saleh: Expressed surprise at the magnitude of traffic weakness and questioned whether affordability concerns are the main driver