Chipotle has a Gen Z and millennial problem.
Boatwright said in a Wednesday earnings call that customers who make less than $100,000, a core audience accounting for 40% of Chipotle's sales, have pulled back their spending.
He said that customers in the 25- to 35-year-old age group were "particularly challenged," a trend he said was not unique to Chipotle. This cohort, which includes older Gen Zers and younger millennials, makes up about 25% of the chain's total sales, per Boatwright.
"This group is facing several headwinds, including unemployment, increased student loan repayment, and slower real wage growth," the executive said.
"We're not losing them to the competition. We're losing them to grocery and food at home," Boatwright said. He said they were not avoiding Chipotle entirely, just coming by less frequently.
"They feel the pinch, we feel the pullback from them as well," he added.
Chipotle on Wednesday released its third-quarter results, reporting a 7.5% revenue increase to $3.0 billion compared to the same period a year before. However, its same-store sales remained flat.
The chain's stock price had dropped by about 16% in after-hours trading early Thursday. It has sunk about 33% in the past year.
Like many other fast-casual chains, Chipotle has struggled in recent months with slumping sales as consumers tighten their spending, opt to visit only their favorite restaurants, and increasingly seek out value-driven promotions. In July, Chipotle reported a 4% decline in same-store sales, one of the brand's worst quarters since 2020.
In an effort to attract new and returning customers, the chain has introduced a loyalty program targeting college students and revamped its menu with limited-time offerings, including the return of its carne asada and the debut of its red chimichurri sauce in September.
Chipotle has also set its sights on further international expansion, announcing in September its plans to open its first restaurants in Asia, specifically in the Singapore and South Korean markets, next year. It will also open its first store in Mexico in early 2026.
Representatives for Chipotle did not respond to a request for comment from Business Insider.
