Chipotle Struggles as Customers Skip the Guac

Company Overview - Chipotle's shares dropped over 15% following a quarter with flat same-store sales and declining traffic, marking the third consecutive reduction in annual sales guidance [1] - CEO Scott Boatwright attributed the decline to reduced consumer spending on dining out, particularly among the core demographic of 25- to 35-year-olds, influenced by factors such as unemployment, student loans, and slow wage growth [2][3] Industry Context - The challenges faced by Chipotle are reflective of broader issues within the fast-casual dining sector, with competitors like Sweetgreen and Cava also reporting disappointing earnings and declining same-store sales [5] - Sweetgreen's same-store sales fell by 8%, and Cava's growth has significantly slowed from double-digit increases to nearly zero in Q2 [5] - A KPMG survey indicated that nearly 70% of consumers are dining at home more frequently, with 85% citing cost-saving as the primary reason, and about 40% reporting a decrease in income, which has doubled from the previous year [5]