Chipotle Shares Drop as Sales Forecast Falls
October 30, 2025 – Chipotle Mexican Grill (CMG.N) shares tumbled nearly 19% on Thursday after the company issued its third sales forecast cut of the year, alarming investors about challenges facing the fast-casual chain. The move erased about $9 billion in market value and marked Chipotle’s worst single-day performance since July 2012.
The company cited rising tariffs on beef, inflationary pressures, and a pullback in discretionary spending among U.S. consumers, particularly those earning less than $100,000 annually.
Consumer Spending Trends Impact Chipotle
Analysts note that soft consumer spending is affecting Chipotle and other fast-casual restaurants. While higher-income households continue to support overall U.S. spending, younger and low- to middle-income consumers are trading down to value options or shifting toward retailers like Walmart.
“In an environment with declining traffic, it is unlikely that consumers will allow Chipotle to raise menu prices. This dynamic will likely result in significant margin contraction,” said BTIG analyst Peter Saleh.
Chipotle executives emphasized that customers aged 25-35 face rising unemployment, resumed student loan payments, and slow wage growth, which has further pressured sales.
Industry-Wide Challenges
The soft demand is not unique to Chipotle. Starbucks (SBUX.O) also reported margin pressures due to higher coffee bean costs, despite achieving its first quarter of comparable sales growth in over a year.
Other fast-casual chains, including Cava (CAVA.N) and Sweetgreen (SG.N), saw stock declines of 8% and 6%, respectively. The S&P 1500 Restaurants sub-index (.SPCOMREST) is down about 1% in 2025, underperforming the broader S&P 500, which is up roughly 17% this year.
“We believe it’s more of a category problem, not just a Chipotle problem,” noted Stifel analyst Chris O’Cull, while pointing out operational challenges such as digital order inconsistencies and ingredient availability.
Tariffs and Cost Pressures
President Trump’s import levies on beef, a key ingredient for Chipotle, have increased input costs. The company indicated a “slow and measured” approach to price hikes in 2026, aiming to balance profitability with consumer sensitivity.
Analysts warn that cost pressures may persist, potentially impacting margins across the fast-casual restaurant sector for the foreseeable future.
Analyst Reactions and Stock Valuation
At least 19 brokerages cut their price targets for Chipotle, which now trades at a 12-month forward price-to-earnings ratio of 30.08. Starbucks’ PE ratio stands at 32.13, with some analysts also lowering expectations.
Year-to-date, Chipotle shares have fallen 34%, significantly lagging broader consumer stocks amid ongoing inflationary pressures and weak discretionary spending.
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