In This Article:
(Bloomberg) -- Chipotle Mexican Grill Inc.’s sales rose less than expected, highlighting the high bar the company set by defying an industrywide traffic slowdown in recent years.
Most Read from Bloomberg
-
New York’s First ‘Passive House’ School Is a Model of Downtown Density
-
Transportation Memos Favor Places With Higher Birth and Marriage Rates
Same-store sales climbed 5.4% in the fourth quarter, missing the average analyst estimate. The burrito chain sees that measure rising by a low-to-mid single digit for the full year, another sign that growth could continue to moderate.
The shares fell 5% at 6:02 p.m. in extended trading in New York.
Chipotle has stood out as one of the few restaurant chains managing to bring in more customers over the past year even as competitors lose traffic. But investors have come to expect high growth rates, and that’s getting harder to achieve as competition for budget-strapped customers intensifies and rivals launch aggressive discounts.
Transactions increased 4% in the latest quarter, signaling that its burritos, some of which cost $10 or less, remain a compelling proposition for diners. The company isn’t planning on raising prices this year following a 2% increase in December, and it won’t offer steep discounts, Chief Executive Officer Scott Boatwright said in an interview.
He added that Chipotle gained market share last year, and expects that trend to continue in 2025.
“Even in the face of even more aggressive value wars, there are winners and losers,” Boatwright said. “We happen to be a winner even though we’re not competing on value as a price point.”
Related: McDonald’s $5 Chicken, Fries and Coke Escalates Bitter Price War
Chipotle has sought to lure in customers with limited-time offers and promotions, including the return of its Halloween $6 burrito last quarter. This year, it plans to focus on speeding up service, including with tools such as a new produce slicer that help with tedious task of chopping onions, jalapeño peppers and romaine lettuce.
Chipotle also plans to focus on its limited-time offers and initiatives to encourage visits during the summer, when there’s normally a lull. Boatwright declined to elaborate on the details.
The company wants to boost ordering through its app and website. For example, it will use AI to detect when customers are at risk of lapsing, and serve them up personalized offers to entice them back.