SAN FRANCISCO (Dow Jones) -- Chipotle Mexican Grill, Inc. warned Friday its third-quarter profit and sales will be hurt due to cash-strapped U.S. consumers and surging food costs. Its shares tumbled 18% in early trading.
The U.S. restaurant industry is facing leaner times as consumers are spending less money to eat out. So far, casual sit-down restaurants have been harder hit than the fast-food sector.
Chipotle, which sells burritos, tacos and other quick-service dishes, said it expects third-quarter net income to fall slightly below the year-ago figure of 62 cents a share. Analysts polled by FactSet Research had expected Chipotle to earn 72 cents a share in the quarter.
Denver-based Chipotle (CMG) said it faces further sales deceleration at its 775 fast-food outlets. The company said comparable restaurant sales, or sales at outlets open at least one year, will be in the "mid to low single digits."
Its previous forecast called for mid-single-digit increase. To combat rising costs for food-ingredients, Chipotle also said it plans to implement a national pricing strategy for its menu.
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