Chipotle’s stock price collapses as Generation Z and Millennials burdened by student debt and unemployment stay away
Chipotle’s stock price collapses as Generation Z and Millennials burdened by student debt and unemployment stay away
By Michael Grothaus | Published: 2025-10-30 12:15:00 | Source: Fast Company – news
Fast-casual restaurant chain Chipotle Mexican Grill (NYSE: CMG) is seeing its stock price drop this morning after its third-quarter 2025 earnings announcement and sales outlook spooked investors.
As of the time of this writing, CMG shares are down a staggering 19% to $32.21 in pre-market trading. Here’s what you need to know about the company’s stock price collapse.
What happened ?
On Wednesday, Chipotle reported Earnings for the third quarter of 2025 After the bell. Some of what the company revealed worried investors.
But first, here are the company’s most important quarterly metrics:
- Total revenue: $3 billion (up 7.5%)
- Similar restaurant sales: up to 0.3%
- Operating margin: 15.9% (down 1% point)
- Adjusted diluted earnings per share: $0.29 (up 7.4%)
- Stores open: 84
As CNBC noted, Chipotle’s adjusted earnings per share are 29 cents Conforming to investors’ expectationsIts revenue of $3 billion came close to the $3.03 billion expected by LSEG analysts.
However, while Chipotle’s key third-quarter metrics were largely in line with expectations, the company’s expectations led investors to dump the stock in the hours after it reported its latest earnings.
Comparable sales are expected to decline for the full year
Investors are generally not happy with just having their expectations met. They want unlimited growth in the future as well. A perceived lack of future growth can send investors fleeing — and that appears to be what’s happening to Chipotle stock in pre-market trading.
After announcing its relatively predictable third-quarter results, Chipotle released its full financial forecast for 2025, revealing that it is lowering its sales forecast.
For the full fiscal year (the company is now in the fourth quarter of 2025), Chipotle says it expects “full-year comparable restaurant sales declines in the low-single-digit range.”
This is the third time in a row that the restaurant chain has lowered its sales forecast. Back in February, the company initially said it expected full-year sales to increase in the low to mid-single digits.
Why the gloomy outlook?
As for the factors influencing the low sales forecast, Chiptole CEO Scott Boatwright cited several reasons in the call to the company’s investors.
With consumer sentiment declining “sharply” over the course of the year, Chipotle stores saw a “broad-based decline in the frequency” of customer visits, Boatwright said.
This is especially true for low- to moderate-income customers, which Boatwright says includes households earning less than $100,000, representing about 40% of Chiptool’s total customer base.
This segment of customers is “eating out less often due to concerns about the economy and inflation,” Boatwright says.
However, another segment of Chipotle’s customers also had a significant negative impact on Chipotle’s revenue as they reduced visits as well. This category includes young people between the ages of 25 to 35 years.
Boatwright says this group faces particular economic challenges, which prompts them to hold back on discretionary spending. These challenges include “unemployment, increased student loan repayments, and slowing real wage growth.”
“We believe this trend is not unique to Chipotle,” Boatwright noted, “and occurs across all restaurants as well as many discretionary categories.”
Meanwhile, Chipotle may rely more heavily on younger diners than other chains. “We tend to skew younger and slightly over-index on that group compared to the broader restaurant industry,” Boatwright said.
Moving forward with new store openings
Although sales are expected to decline for all of 2025, Chipotle says it will significantly expand its physical store footprint in 2026.
While opening new stores increases operating expenses, it can also help the company boost sales by expanding into new markets where there are no Chipotle stores or where the company is underrepresented.
In 2025, Chitpotl said it will open between 315 and 345 locations by the end of the fiscal year. In 2026, the company said it expects to open more stores.
“We expect to open between 350 and 370 new restaurants,” Boatwright revealed. These will include 10 to 15 new partner-operated restaurants outside North America, the CEO noted.
Countries where these restaurants are expected to open include South Korea, Singapore and Mexico, in addition to parts of the Middle East. Chiptole also expects to open one or two company-owned stores in Europe.
CMG stock price falling
But investors don’t seem to care much about Chipotle’s continued expansion and are instead focusing on the company’s low sales outlook.
As of the time of this writing, CMG shares are down 19% in pre-market trading to $32.21 per share. This is a low that Chipotle’s stock price has not seen since 2023.
As of yesterday’s closing stock price of $39.76, CMG stock is down more than 33% since the beginning of the year.
At just over $32 per share in pre-market trading this morning, Chipotle’s stock price is now roughly half what it was on the first trading day of 2025.
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(Tags for translation)Chipotle
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