Chipotle (CMG) reported another quarter of same-store sales declines, guiding for a bleak 2026 as it grapples with a traffic decline and economic pressure on its core customer.

In a statement, CEO Scott Boatwright cited a "dynamic consumer backdrop" as Chipotle reported a full-year same-store sales drop of 1.7%. Its 2026 outlook disappointed the street, with expectations for sales to be flat, while Wall Street forecasted a 1.8% increase.

For the fourth quarter, the company posted a same-store sales declines of 2.5%, less than the 2.9% Wall Street expected, according to Bloomberg estimates. Higher menu prices offset lower transactions.

Chipotle posted adjusted earnings per share of $0.25 compared to $0.24, alongside revenue growth of nearly 5% to $2.98 billion, slightly higher than the forecasted $2.96 billion.

The stock slid following the results on Tuesday after market close, down 7% in the after hours market.

In its third quarter earnings, reported back in October, Chipotle cut its sales outlook, saying it expected same-store sales to decline in the low-single-digit range for its full year. Wall Street anticipates same-store sales to have fallen 1.8% in 2025.

Last quarter, Boatwright told investors the company's reduced outlook was due to "ongoing volatility in our trends in the consumer environment."

Boatwright noted that "a particularly challenged cohort is the 25- to 35-year-old age group ... This group is facing several headwinds, including unemployment, increased due loan repayment, and slower real-wage growth."

Deutsche Bank analyst Lauren Silberman wrote in a note to clients that she expects the company to focus on underlying trends in the macro environment and highlight innovation, like the recent return of Chicken al Pastor. The company also unveiled a new high-protein menu late last year, which features two high-protein bowls, a salad, a burrito, and an adobo chicken taco.

TD Cowen's Andrew Charles said in a note he's eager to hear more about Chipotle's marketing plan following the "abrupt" departure of its chief brand officer, Chris Brandt, earlier this month. As the company searches for a new CMO, it has named Stephanie Perdue as interim marketing chief.

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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