In its first quarter earnings report, Chipotle revealed that same-store sales dipped 0.4%, the company’s first quarterly same-store sales decrease since 2020. The chain cited a spending slowdown for the weaker than forecasted sales, reported Fortune.
While Chipotle saw a 1.9% increase in checks, transactions dropped by 2.3%. According to Fortune, the chain previously projected same-store sales for the year to grow by low- to mid-single digits but now expects those sales to be in low-single digits.
“It’s my take that the consumer is being very cautious and optimistic at present,” CEO Scott Boatwright said in a Fortune podcast earlier this month. “Many are preserving cash because of the unknown, or potential consequences, downstream consequences, intended or unintended from the current administration. And so you’re seeing a pullback, a market pullback, at present.”
“We talked to consumers broadly about what is causing them to sit on the sideline in this economy, it’s really trying to save money, [and] uncertainty around what’s going on with the global economy,” Boatwright told Yahoo Finance in an interview.
Boatwright also told Yahoo Finance that the company is not losing customers but is instead facing “a convenience challenge.” Due to that challenge, he added that the company needs to “build more restaurants as quickly as we can to get to our 7,000 restaurants in North America.”
Despite the slowdown, Fortune reported that Chipotle “is prepared to weather the storm.” The company has stated that it will not pass down tariff costs to customers, “calculating Trump’s tariff plan would cost about 0.5% of margin per year.”
In efforts to mitigate the impact of tariffs, the company began diversifying its produce sources in 2018, when President Trump first introduced levies on Mexico during his first administration. Chief Financial Officer Adam Rymer said during its earnings calls that Chipotle is also contending with increased costs of beef and packaging due to tariffs.
In November, NACS Daily reported that Chipotle opened its 1,000th “Chipotlane” (a Chipotle with a drive-thru) restaurant. Located in the Kansas City metro area, “the milestone restaurant will feature the company’s signature digital order drive-thru pick-up lane.” Chipotle said that of the company’s more than 3,600 restaurants in its real estate portfolio, nearly 30% feature a Chipotlane.