Why Chipotle Just Had Its Worst Quarter in Years
Chipotle is one of the most beloved and profitable fast food brands in the United States. The Mexican chain, famous for its larger-than-life burritos and tasty rice bowls, is known for offering great value to consumers, making it a popular choice in the market. However, according to the brand, it just had its worst quarter in years. Why have sales dipped in 2025? Here is everything you need to know, including what the brand plans on doing to turn things around.
Comparable Sales Decline for the First Time Since 2020
While a 1.7% growth was expected, Chipotle's same-store sales fell 0.4% in Q1, the first quarter of 2025. This is the first decline in five years. Overall, restaurant transactions fell 2.3%.
Revenue Misses Wall Street Expectations
Revenue was down overall. Despite a 6.4% year-over-year increase, Chipotle's Q1 revenue of $2.88 billion fell short of analyst forecasts of $2.95 billion. Its operating margin was also down, at 26.2% compared to 27.5% the year before.
Tariffs and Inflation Squeeze Margins
One of the reasons behind the decline was rising costs from tariffs on imported goods, such as avocados and beef. According to the company, about half its avocado supply comes from Mexico. They also use a lot of aluminum, subject to tariffs.
Consumer Behavior Shifts Amid Economic Uncertainty
According to CEO Scott Boatwright, starting in February, consumers began reducing restaurant visits due to economic concerns. "We could see this in our visitation study, where saving money because of concerns around the economy was the overwhelming reason consumers were reducing the frequency of restaurant visits," he said. "It was all around this idea of saving money, economic uncertainty — they're eating at home more frequently than they're eating out," he continued, adding it is "really tied to the consumer sitting on the sideline."
"Burrito Season" Also Fell During Easter
There was also the untimeliness of "burrito season." The chain claims that the busiest time of year for them is usually Spring, from Easter to May. However, the holiday was later this year, decreasing the usual demand. However, the launch of a new protein, chipotle honey chicken, helped spike sales in March.
Expansion Plans Announced
Looking ahead, Chipotle is planning to open between 315 and 345 new restaurants by the end of the year. It is also planning to expand into Mexico by early 2026.
Chiptole Is Confident About the Year
"I am confident that we have a strong plan to return to positive transaction comps by the second half of the year, and during these uncertain times, we will continue to invest in the things that make Chipotle a special brand — our people, culinary, value proposition, innovation and growth," Boatwright said in a statement. "Looking forward, our marketing team has an enhanced plan for this summer and the remainder of the year to make Chipotle more visible, more relevant and more loved," Boatwright said.
At Chipotle, same-store sales fell for the first time since 2020 in the most recent quarter, the chain reported this week. Uncertainty about the path forward for the U.S. economy started to affect spending in February, the company said, shortly after President Trump's inauguration — a trend that continued into April.
"It was all around this idea of saving money, economic uncertainty — they're eating at home more frequently than they're eating out," Scott Boatwright, the burrito chain's chief executive, said when asked about consumer behavior. The underlying trend, he added, is "really tied to the consumer sitting on the sideline."
Chipotle also lowered its full-year guidance. Beyond sluggish consumer spending, the chain said it expected Mr. Trump's tariffs imposed in April — a broad 10 percent duty on many imports and tariffs on aluminum — to raise the company's food, beverage and packaging costs this year.
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