Chipotle Mexican Grill has no plans to introduce a value menu even as it faces a pullback from lower-income customers who are trading down to fast-food chains offering aggressive meal deals.
“While value as a price point is not and will not be a Chipotle Mexican Grill Inc. strategy, we are using this challenging period to strengthen our consumer flywheel by improving execution, enhancing how we communicate value, and accelerating menu and digital innovation,” Chief Executive Scott Boatwright told analysts during the company’s Oct. 29 earnings call.
The Newport Beach-based fast-casual chain’s recent third-quarter results fell short of expectations “due to persistent macroeconomic pressures” and “incremental consumer headwinds,” Boatwright said.
Chipotle (NYSE: CMG) reported third quarter revenue of $3 billion, up 7.5% compared to the same period last year, while analysts had forecasted 8.2% growth to $3.02 billion. Same-store sales, a key metric that measures a chain’s financial health, increased 0.3%.
Shares fell 18% to $32.53 the day after the report; the company also hit a 52-week low of $31.01 during the trading session. Chipotle was trading at $31.74 at press time with a market cap of $42 billion—ending its long run as Orange County’s most valuable public company as it slips to second place behind Edwards Lifesciences (NYSE:EW).
Boatwright said the chain saw a greater slowdown among guests with low to middle incomes—specifically in the 25 to 35-year-old age group.
“We believe that this guest with household income below $100,000 represents about 40% of our total sales and, based on our data, is dining out less often due to concerns about the economy and inflation,” Boatwright said.
The CEO noted that Chipotle tends “to skew younger and slightly over-indexed to this group relative to the broader restaurant industry.”
Boatwright noted that during previous slowdowns, the company has avoided resorting to discounting and instead survived by doubling down on restaurant fundamentals and execution—including order accuracy and clean stores—while also emphasizing portion sizes and culinary innovation.
Boatwright said the overall restaurant industry is losing these customers to grocery stores, where inflation has been lower compared to menu inflation. In September, grocery store prices, or food at home, increased by 2.7% compared to the same period last year, while restaurant prices, or food away from home, rose by 3.7%, according to the latest government data.
Despite inflationary pressures, the company has no plans to raise prices. “To fully offset inflation in 2026,” Chief Financial Officer Adam Rymer told analysts. “And so, this will pressure margins in the near term, but we believe it is the right thing to do for our guests in this environment.”
Like his predecessor, Brian Niccol, Boatwright reminded investors on the call that Chipotle offers customers “generous portions” of food made with high-quality ingredients and “delivered at a price point that is 20% to 30% below our peers.”
“Bottom line, our value proposition has never been stronger,” he said.
In a note to investors, Raymond James analyst Brian Vaccaro said “the company’s reluctance to more directly message value with a price point (as a reminder that its prices are 20-30% below many peers) could prolong the recovery, in our view.”
Stephens analyst Jim Salera said it viewed “FY26 as a pivotal ‘prove-it’ year for CMG to reestablish a pathway back.”
“With average check +1.1% and transactions (0.8%) in 3Q25, we view traffic normalization as the key driver to re-accelerate comps in FY26 as pricing optionality will likely remain limited,” he wrote in an Oct. 30 note.
Boatwright, named permanent CEO last November, projects a return to positive, mid-single-digit same-store sales in the near future.
“Our aim is to continue to be a transaction-led growth company. Full stop,” he said. n
