Anisha Datt

Anisha Datt, on behalf of Jeffrey Bernstein, asked about the extent to which Chipotle attributes recent comparable sales softness to Chipotle-specific factors versus broader macroeconomic trends, and what levers the company is considering to reverse the comp trend.

Answer

Scott Boatwright (CEO) acknowledged some 'self-inflicted opportunity' related to consumer experience, but stated that the majority of the comp softness is due to a significant pullback from a core audience: households earning under $100,000 annually, representing 40% of total sales. He clarified that these customers are not being lost to competitors but are reducing frequency. Chipotle remains confident in re-engaging these consumers through improved marketing messages, digital campaigns, and innovations.

Anisha Datt asked about the extent to which recent comparable sales softness is attributable to Chipotle-specific factors versus broader macroeconomic trends, and what levers the company is considering to reverse the comp trend.

Answer

CEO Scott Boatwright acknowledged that while there might be some "self-inflicted opportunity" related to the consumer experience, the majority of the comp softness is attributed to a massive pullback from the core audience—households earning under $100,000 annually, representing 40% of total sales. He clarified that Chipotle is not losing these customers to competitors but rather they are reducing frequency. He expressed confidence in re-engaging these consumers through better marketing messages, digital campaigns, and innovations.

Anisha Datt, on for Jeff Bernstein at Barclays Capital, inquired about how the mix of value-oriented sales has evolved at Texas Roadhouse and Bubba's 33. She also asked about any plans to further emphasize value offerings to support lower-income guests.

Answer

CEO Gerald Morgan stated that value is inherently built into the menu through features like early-dine, country dinners, and a range of steak sizes. He noted that guests can choose their price point and highlighted the value of included sides, bread, and peanuts. He also mentioned the recent addition of a $5 beverage menu, including mocktails, to offer more value-priced options.

Anisha Datt, on behalf of Jeff Bernstein at Barclays Capital, asked about franchisee willingness to support national value platforms that might impact near-term profitability and whether there are concerns about franchisee alignment.

Answer

CEO Josh Kobza stated that franchisee alignment is 'as good as it's ever been.' He emphasized that RBI is held accountable for franchisee profitability, which it publicly tracks. He noted that franchisees understand value is a necessary part of the business, and RBI works collaboratively with them to ensure value strategies are balanced, drive traffic, and are respectful of their margins.

Anisha Datt, on for Jeff Bernstein, inquired about any observed changes in consumer behavior in recent months, specifically regarding different income cohorts or shifts in menu mix.

Answer

EVP and CFO Matt Clark responded that consumer behavior has remained very consistent across all concepts. He emphasized that trends in dayparts, days of the week, and item attachment have been stable, predictable, and showed slight improvement in Q3 compared to Q2.