Chipotle Stock Falls 19% as Q3 Traffic Declines Amid Macroeconomic Headwinds

Chipotle Mexican Grill's stock plunged by as much as 19% in trading following its third-quarter 2025 earnings report, which revealed a significant drop in customer traffic and a third consecutive cut to its full-year same-store sales forecast. The fast-casual chain now anticipates a low-single-digit decline in comparable restaurant sales for the full year, marking a substantial shift from earlier projections of growth. This downturn has seen the company's stock fall 45% this year, reducing its market value to approximately $43 billion.

In the third quarter, Chipotle reported a modest 0.3% increase in comparable restaurant sales, primarily driven by higher menu prices and an increased average check. However, this was offset by a 0.8% decline in customer transactions, indicating fewer people are visiting its restaurants. This traffic weakness signals a challenging environment for the burrito chain, which had previously shown resilience against broader industry trends.

CEO Scott Boatwright attributed the slowdown to "persistent macroeconomic pressures," noting that a key demographic, diners aged 25 to 35, are visiting less frequently. According to Boatwright, this group faces significant headwinds, including unemployment, increased student loan repayments, and slower real wage growth. The company also observed that low-to-middle-income consumers are further reducing their frequency of visits.

Analysts have reacted by cutting price targets for Chipotle, with many suggesting the issues are industry-wide rather than specific to the company. Citi analyst Jon Tower revised his price target to $44 per share, stating, "It's difficult to call a bottom for sales given the multitude of factors weighing on demand." Some analysts also questioned if Chipotle's value perception contributes to its challenges, as consumers often perceive its average $10 entrees to be closer to $15.

The situation prompted "The Kobeissi Letter" to question on social media, > "Either Chipotle has collapsed as a brand or young Americans are out of money. Or, both. What is happening here?" In response, Chipotle announced plans to "double down on restaurant execution," increase marketing efforts, and accelerate menu innovation to drive positive transaction growth. The company expects the first quarter of the next year to be particularly tough for middle- and low-income consumers.