🌯 Chipotle’s Burrito Blues: Why Earnings Slipped and Their Plan to Win You Back

Ever stand in the Chipotle line, look at the menu, and wonder if the guac is really worth it today? Or maybe you’ve gotten home, opened your delivery bag, and realized part of your order is missing?

If you’ve felt a little less enthusiastic about your Chipotle run lately, you are not alone.

Chipotle Mexican Grill just held its third-quarter 2025 earnings call , and the results were, in CEO Scott Boatwright’s own words, a performance that “fell short of our expectations”.

The company’s sales are still massive—hitting $3 billion—but comparable sales, a key metric for restaurant health, were nearly flat with a tiny 0.3% increase. Worse, restaurant-level margins actually declined , and the company is now forecasting that full-year comparable sales will decline in the low single-digit range.

So, what went wrong? And more importantly, how does Chipotle plan to win back your lunch money?

📉 The Great Guac Ghosting: Why Chipotle’s Customers Are Pulling Back

Chipotle’s problem isn’t a sudden food-quality crisis. The issue, as Boatwright explained, is “persistent macroeconomic pressures”.

In short, two of Chipotle’s most important customer groups are broke and stressed, and they’re cutting back.

1. The Core Customer is Sidelined

According to Chipotle, their customer base with a household income below $100,000 makes up a whopping 40% of their total sales. This group is “further reducing frequency” because they are “dining out less often due to concerns about the economy, and inflation”.

2. The Millennial/Gen-Z Hit

The hit is even harder with a specific age group. The 25- to 35-year-old cohort is “particularly challenged”. This group, which Chipotle “over-indexed to” compared to the rest of the industry , is facing a nasty cocktail of “unemployment, increased student loan repayment and slower real wage growth”.

When analyst Lauren Silberman of Deutsche Bank asked where these customers are going, the answer was telling. They aren’t flocking to competitors. “We’re not losing them to the competition,” Boatwright clarified. “We’re losing them to grocery and food at home”.

This creates a massive problem for a brand that, as the CEO stated, “is not and will not be a Chipotle strategy” to compete on “value as a price point”.

🗣️ “Is My Kid’s Quesadilla Missing?” What the C-Suite Admits About Your Order

If you’ve been grumbling online about your Chipotle experience, it turns out the CEO has been reading the virtual comment cards.

The earnings call confirmed what many customers have felt: the in-store and digital experience has been slipping. Scott Boatwright admitted that in his own restaurant visits, he “still see[s] inconsistencies”.

He specifically called out three areas that probably sound familiar to the “online chatter” world:

• Digital order accuracy
• Ingredient availability (like running out of a salsa or protein)
• Cleanliness of dining rooms and drink stations

The most stunning admission came during the analyst Q&A. When pressed by analyst about customer metrics, Boatwright gave a shockingly candid answer about digital orders.

“We are struggling in digital with accuracy,“ he confessed.

The reason? Chipotle had changed its quarterly bonus incentives for restaurant teams to focus on getting orders out “on time” rather than making sure they were “accurate”. This backfired. “Our accuracy has fallen off,” Boatwright said.

He then gave an example that every parent who has used the app will understand: “If you’re 5 minutes lates, but everything is in the bag it’s not that big of a deal. If you show up 10 minutes early and my kid’s quesadillas is missing. Now we have a real problem.”

The good news? Chipotle is “redesigning the incentive plan to accurately target the right things” and re-emphasizing standards with “system-wide retraining”.

(One bit of “online chatter” they did respond to positively: “skimping.” The company “invested in… abundant portions” this year and is seeing “incredibly positive” feedback on social media for it.)

🌯 The Comeback Carnitas: Chipotle’s 4-Part Plan to Get Back to Growth

You can’t fix a struggling customer’s bank account, but you can make your product so irresistible they’ll choose you for their one “treat” meal of the week.

Chipotle’s new strategy, internally dubbed the “Recipe for Growth” , is all about “transaction-led growth”. Here’s the plan.

1. Fix the Operations (The “Flywheel”)

Beyond retraining and fixing the bonus structure , Chipotle is rolling out a High-Efficiency Equipment Package (HEAP).

This includes a new dual-sided plancha (grill) that cooks chicken and steak “in less than half the time” and new rice cookers. This isn’t just about speed. The 175 restaurants already using it are seeing “better culinary results,” “better guest experience scores,” and “improved throughput”. The full rollout will take about three years.

2. More New Stuff, More Often (The Menu)

Chipotle’s research found that over 90% of Gen Z consumers say they would visit a restaurant just for a new sauce.

This discovery is changing their entire menu strategy. The Adobo Ranch was a huge hit , and the new Red Chimichurri is driving both new transactions and more trial of carne asada .

The old plan: 2 limited-time proteins (LTOs) per year. The new plan: “Meaningfully accelerate our pace of innovation for 2026” to include 3 to 4 limited-time protein offers plus a steady stream of new sauces, dips, and sides.

Why? Because customers who buy an LTO “increase frequency and spend over the following year”.

3. Target New Occasions (The Group Meal)

Chipotle realizes it’s missing out on two huge markets: catering and families.

• Catering: This is currently just 1-2% of Chipotle’s sales, versus 5-10% for its peers. They’ve launched a new catering pilot in 60 Chicago restaurants to chase this opportunity.
• Family/Group: Groups of 4 or more make up only 2% of transactions. To fix this, they just rolled out “Build Your Own Chipotle,” a new option for 4-6 people.

4. Re-imagining Digital and Value

Chipotle knows its value message is failing. Despite being “20% to 30% below our peers” on price , their own “problem detection study” found that some consumers perceive the brand as “unaffordable” . They believe they get “lumped in” with more expensive fast-casual brands.

The fix is a “new creative campaign that spotlights what sets Chipotle apart” —clean ingredients, fresh prep, and abundance. They’re also planning “significant additions to the rewards program” , leaning into the “gamification” that worked so well with their “Summer of Extras” promotion.

🌶️ The $4 Million Question: Will Chipotle Sacrifice Profits for Traffic?

This was the tensest part of the call. Analysts essentially asked: if inflation is high and customers are broke, what gives? Do you raise prices and lose more customers, or do you eat the cost and hurt your profits?

Chipotle’s answer was clear: They are picking the customer.

CFO Adam Rymer revealed that inflation is “accelerating into the mid-single-digit range” for 2026, thanks to tariffs and rising beef costs.

But in a major strategic pivot, “we do not plan to fully offset inflation in 2026,“ Rymer stated.

This move “will pressure margins in the near term” , but they believe it’s the “right thing to do for our guests in this environment”. CFO Adam Rymer called it a “temporary dislocation”.

When analyst Brian Bittner asked about future price hikes , the company confirmed the old days of “one fell swoop” price increases are over. Instead, they’ll use a “slow and measured approach” , testing small increases over 6 or even 12 months.

🧑‍⚖️ The Verdict: Will the “Recipe for Growth” Work?

Chipotle is facing a perfect storm. Its core customers are economically “challenged” , and its own operational fumbles with order accuracy have eroded trust.

The company’s new “Recipe for Growth” is a massive bet. They are betting that by intentionally sacrificing short-term profits to keep prices stable , all while aggressively launching new menu items and fixing their operational problems, they can win back your loyalty.

They are doubling down on “getting the fundamentals right” —giving you an abundant, accurate, and delicious burrito bowl—and betting that, in the end, is the only value proposition that matters. I think this is the right strategy but it may take some time for the results to be seen and the market to respond with an improved stock price.

Disclosure : This is not investment advice. I may currently or in the future own stocks covered in this article. Please discuss with a qualified investment professional before making any investment decisions.