(Reuters) -Chipotle Mexican Grill on Wednesday lowered its annual sales growth target for a second time this year as economic uncertainty prompts cash-strapped Americans to dine out less, sending the burrito chain’s shares down 9.5% after hours.
The company also posted a bigger-than-expected decline in comparable sales for the second quarter.
A significant rise in menu prices has pressured dining out in the United States for several quarters now, forcing consumers to prepare meals at home to stretch their budgets.
Companies are also taking stock of President Donald Trump’s tariff policy which could lead to higher supply chain costs.
While Chipotle has focused on expanding store count with the expectation that its affordable and popular Tex-Mex cuisine can defy broader weakness in dining out, visits per location fell about 6% in the second quarter, while the wider fast casual segment remained flat, data from Placer.ai showed.
Chipotle now expects annual comparable restaurant sales to be about flat year-over-year, compared with its prior target of growth in the low single-digit range.
It reported a 4% fall in comparable sales for the quarter ended June 30, compared with analysts’ estimates for a 2.86% decline, per data compiled by LSEG.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Devika Syamnath)
Comments