(Reuters) -Chipotle Mexican Grill on Wednesday lowered its annual sales growth target for a second time this year, as economic uncertainty prompts Americans to dine out less, sending the burrito chain's shares down 10% after hours.
The company also posted a bigger-than-expected decline in comparable sales for the second quarter.
A significant rise in menu prices has pressured dining out in the United States for several quarters now, forcing consumers to prepare meals at home to stretch their budgets.
Companies are also taking stock of President Donald Trump's tariff policy which could lead to higher supply chain costs.
Chipotle's forecast cut reflects the ongoing volatility in trends and the consumer environment, CEO Scott Boatwright said on a post-earnings call.
The company now expects annual comparable restaurant sales to be about flat year-over-year, while its prior target was for growth in the low single-digit range.
While Chipotle has focused on expanding store count with the expectation that its affordable and popular Tex-Mex cuisine can defy broader weakness in dining out, visits per location fell about 6% in the second quarter, while the wider fast casual segment remained flat, data from Placer.ai showed.
It still maintained the target of opening between 315 and 345 restaurants through the year.
The company has also been ramping up digital marketing, and offering targeted promotions through its rewards program to keep consumers interested.
Chipotle launched the Adobo Ranch, its first new dip in five years, during the quarter and continued its limited-time Chipotle Honey Chicken offering to help sales.
It reported a 4% fall in comparable sales for the quarter ended June 30, while analysts were estimating a 2.86% decline, per data compiled by LSEG.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Devika Syamnath)
