Business
How Chipotle lost its sizzle
Chipotle Mexican Grill, the Newport Beach-based chain known for its bursting burritos and lunch bowls, just finished its worst year ever.
Its same-store sales declined last year for the first time since going public two decades ago. The downturn reflects what analysts say is a broader slowdown in fast casual chains — considered a step above fast food but below full-service restaurants.
In a K-shaped economy where the few with money are still spending while everyone else is anxious about rising prices and keeping their jobs, Chipotle is stuck in a sour spot. It isn’t a destination for the rich. Instead, it is a skippable splurge for those looking to save.
“Our guests [are] placing heightened focus on value and quality and pulling back on overall restaurant spending,” Chipotle Chief Executive Scott Boatwright said last week after announcing earnings.
In an uncertain economy muddied by tariffs and an immigration crackdown, consumers are cutting back on discretionary spending and increasingly seeking the best value on essentials such as lunch and dinner.
Chipotle has boomed in popularity since opening in Denver in 1993. It moved its headquarters to California in 2018.
The burrito staple opened 334 new locations last year, bringing its total to roughly 4,000. The company’s net income was $1.5 billion in 2025, virtually flat compared to the year prior. Its comparable sales lost steam with a roughly 2% decline in 2025 following a 7.4% increase in 2024.
In an earnings call earlier this month, executives estimated that same-store sales would be about flat in 2026, with 350 to 370 new restaurants slated to open.
“As we move into 2026, the consumer landscape is shifting,” Boatwright said.
He tried to suggest that Chipotle customers are from the upward-sloping part of the K in the K-shaped economy, so it will not be planning big price cuts to attract new customers. Boatwright said on the earnings call that 60% of Chipotle’s core customers make more than $100,000 per year.
“We’ve learned the guest skews younger, a little more higher income, and we’re gonna lean into that,” Boatwright said.
The company’s suggestion that it doesn’t plan to do much more for cost-conscious consumers sparked an online debate that the burrito giant is no longer for regular people.
McDonald’s demonstrated the value of offering more value these days. It announced this week that its sales surged after the launch of its $5 meal deal last year, part of broader value wars among fast-food establishments.
Chipotle has tried to offer value by not raising its prices as much as inflation would require, reviving a rewards program, testing a “happier hour” with lower prices and offering smaller portions at lower prices.
Chipotle came under fire in 2024 for dishing out inconsistent portion sizes, but has since recommitted to giving every customer a “generous” helping.
Late last year, Chipotle launched a high-protein menu that includes inexpensive options like a cup of chicken or steak for around $4. Protein has been trending as the rise of GLP-1s have many Americans eating less and focused on getting the most out of their meals.
“This is going to be a marquee year for Chipotle to get back on track,” said Jim Salera, a restaurant analyst at Stephens. “Chipotle has traditionally been much more resilient through ebbs and flows of the consumer, but nobody’s immune.”
The company has weathered other challenges in the past. Its business took a hit when it served tainted food that sickened more than 1,100 people in the U.S. from 2015 to 2018. The company paid a $25 million fine to resolve criminal charges connected with the outbreaks.
Some full-service restaurants are also lowering prices to levels that compete with Chipotle, analysts said. A Chipotle burrito or bowl plus a drink costs around $15, while the value-focused full-service restaurant Chili’s offers a multi-course meal for under $11.
“The pricing advantage that fast casual has relative to other segments has eroded significantly” said Aneurin Canham-Clyne, who covers restaurants for the trade publication Restaurant Dive.
Middle- and upper-income consumers aged 25 to 30 make up a significant share of Chipotle’s business, but many are looking for cheaper ways to get their meals. Fast casual chains have to rely on consumers with a range of incomes, not just the top 20% of households, Canham-Clyne said.
“White collar workers making in the low six figures in major cities who are feeling the heat from services inflation or feeling insecure in their jobs as a result of AI, they’re going to be saving a little bit more money,” he said.
Chipotle shares have fallen more than 37% over the past year, and they are not the only fast casual company to struggle in the stock market. Sweetgreen, headquartered in Los Angeles and catering to a health-conscious Southern California consumer, has seen its shares plummet 80% over the past year. The Mediterranean bowl spot Cava saw shares fall more than 50% over the same time period.
Chipotle shares closed Thursday at $35.84, down 4% for the day.
Canham-Clyne said Chipotle is not yet in dire straits. The brand has proven itself consistent and appealing to those looking for high-quality meals at a lower price than most sit-down restaurants.
“They sell a lot of burritos, they have a lot of stores,” Canham-Clyne said. “They can survive a bit of a downturn and continue to grow.”
Business
Kanye West ordered to pay former contractor $140,000 over Malibu mansion lawsuit
A jury found Ye, the controversial music impresario formerly known as Kanye West, liable in the legal dispute brought by his former contractor and ordered him to pay $140,000.
Tony Saxon, who also worked as Ye’s security guard and caretaker at the Malibu property, sued the rapper in Los Angeles Superior Court in September 2023, claiming a slate of labor violations, nonpayment of services and disability discrimination.
The $140,000 judgment announced Wednesday is far less than the $1.7 million in damages that Saxon’s lawyers had originally requested. Ye will also have to pay for Saxon’s legal fees, which is expected to put the total sum that West will have to pay at more than $1 million.
Although Saxon’s attorneys at the Los Angeles-based firm West Coast Trial Lawyers called the verdict a “mixed” one, they characterized it as as a “vindication for our client.”
“Ye’s lawyers called him a liar, a fraud, and a malingerer in court. His medical records, bank records, and personal family history were dissected, mocked, and vilified,” said attorney Ronald Zambrano in a statement.
“In true David-vs.-Goliath fashion, Mr. Saxon stood firm against one of the biggest celebrities in the world, with the truth on his side,” Zambrano said.
Saxon alleged that while working as a security guard on the property, he was forced to sleep on the floor and was fired in November 2021 for failing to comply with Ye’s “dangerous requests.” He also said that he frequently complained to West about these and other issues, but that the rapper failed to address them.
In a statement, Ye’s spokesperson noted the jury had “rejected almost all of his [Saxon’s ] claims,” and that Saxon only recovered “a small fraction of what his lawyers demanded.”
“The jury also found that Saxon acted in the capacity of a contractor and did not qualify for the employee exception under California’s contractor licensing statutes,” according to the statement. “We believe the damages award is legally barred and we’ll be seeking post-trial relief from the court.”
Ye purchased the beachfront concrete mansion in 2021— designed by Pritzker Prize-winning Japanese architect Tadao Ando — for $57.3 million. He then gutted the property on Malibu Road, reportedly saying, “This is going to be my bomb shelter. This is going to be my Batcave.”
Three years later, the hip-hop star sold the unfinished mansion (he had removed the windows, doors, electricity and plumbing and broke down walls), at a significant loss to developer Steven Belmont’s Belwood Investments for $21 million.
In court filings Ye denied Saxon’s allegations. In a November 2023 response to the complaint, he disputed that Saxon “has sustained any injury, damage, or loss by reason of any act, omission or breach by Defendant.”
In January, Ye sued Saxon and his law firm over a $1.8 million lien placed on the Malibu mansion, alleging they “wrongfully” placed an “invalid” lien on the property “while simultaneously launching an aggressive publicity campaign designed to pressure Ye, chill prospective transactions, and extract payment on disputed claims already being litigated in court.”
The Malibu mansion that Ye purchased and gutted was later purchased and restored to its original design.
(The Oppenheim Group / Roger Davies)
That case is pending.
Ye’s spokesperson said the lien “clouded the home’s title and interfered with its sale, destroying substantial value at the time of sale.”
In recent years, the mercurial superstar has faced a number of public and legal dramas.
In 2022, Ye lost numerous lucrative partnerships with companies like Adidas and the Gap, following a raft of antisemitic statements, including declaring himself a Nazi on X (which he later recanted).
Two years later, Ye abruptly shut down Donda Academy, the troubled private school he founded in 2020.
Ye, the school and some of his affiliated businesses faced multiple lawsuits from former employees and educators, alleging they were victims of wrongful termination, a hostile work environment and other claims.
In court filings, Ye has denied each of the claims made against him by former employees and educators at Donda.
Several of those suits have been settled.
Business
Yamaha is leaving California after nearly 50 years
Yamaha Motor Corp. is relocating part of its operations to Georgia and selling its California assets after 47 years.
The company is the latest among a slew of businesses to relocate operations outside the Golden State to cut costs and improve profitability. Many cite high taxes and strict regulations as obstacles to doing business in the state.
Yamaha Motor Corp. U.S.A., the U.S. subsidiary of Yamaha Motor Co., has been based in Cypress since 1979. It will begin its move to Kennesaw, Ga., at the end of this year and complete the moving process by the end of 2028, the company said in an announcement.
The company’s marine and motorsports business facilities already moved to Kennesaw in 1999 and 2019, respectively. The Cypress facility currently houses corporate functions and the financial services business on roughly 25 acres, the company said.
Yamaha said it will sell all its land, offices, warehouses and other fixed assets in California. It will use a sale-and-leaseback arrangement for a temporary period to ensure a smooth transition and business continuity.
“This initiative is positioned as one of the Company’s key measures aimed at improving asset efficiency and enhancing profitability in the United States,” the company said in its announcement of the move. Yamaha “is undertaking structural reforms … in response to cost increases resulting from U.S. tariffs and changes in the market environment,” it said.
Yamaha Motor was founded in Japan in 1955 and began selling its products in the U.S. in 1960. The company got its start making motorcycles for racing and contests, and released its first boat motor in 1960. It acquired land in Cypress in 1978 and established an office there one year later.
Some companies have been vocal about their dissatisfaction with California’s business environment.
Last year, Bed Bath & Beyond’s executive chairman, Marcus Lemonis, said his bankrupt company won’t be reopening any stores in California, where it used to have more than 80 locations.
“California has created one of the most overregulated, expensive, and risky environments for businesses,” Lemonis said in a statement posted on X in August.
Also in August, In-N-Out owner Lynsi Synder announced she was moving her family from California to Tennessee, where she planned to open a new regional headquarters. In-N-Out’s California headquarters remains operational.
“There’s a lot of great things about California, but raising a family is not easy here,” Snyder said on a podcast at the time. “Doing business is not easy here.”
Tesla moved its headquarters out of Palo Alto in 2021, the same year that financial services firm Charles Schwab relocated from San Francisco to north Texas.
Elon Musk moved the head offices of his other companies — SpaceX and X — to Texas in 2024, as did Chevron, the oil giant that was started in California.
Business
Disneyland Resort President Thomas Mazloum named parks chief
Disneyland Resort President Thomas Mazloum has been named chairman of Walt Disney Co.’s experiences division, the company said Tuesday.
Mazloum succeeds soon-to-be Disney Chief Executive Josh D’Amaro as the head of the Mouse House’s vital parks portfolio, which has become the economic engine for the Burbank media and entertainment giant. His purview includes Disney’s theme parks, famed Imagineering division, merchandise, cruise line, as well as the Aulani resort and spa in Hawaii.
Jill Estorino will become the head of Disneyland Resort in Anaheim. She previously served as president and managing director of Disney Parks International and oversaw the company’s theme parks and resorts in Europe and Asia.
Estorino and Mazloum will assume their new roles on March 18, the same day as D’Amaro and incoming Disney President and Chief Creative Officer Dana Walden.
“Thomas Mazloum is an exceptional leader with a genuine appreciation for our cast members and a proven track record of delivering growth,” D’Amaro said in a statement. “His focus on service excellence, broad international leadership and strong connection to the creativity that brings our stories to life make him the right leader to guide Disney Experiences into its next chapter.”
Mazloum had been about a year into his tenure at Disneyland. Before that, he was head of Disney Signature Experiences, which includes the cruise line. He was trained in hospitality in Europe.
In his time at Disneyland, Mazloum oversaw the park’s 70th anniversary celebration and recently pledged to eliminate time limitations for park-hopping, which are designed to manage foot traffic at Disneyland and California Adventure.
Mazloum will now oversee a 10-year, $60-billion investment plan for Disney’s overall experiences business, which includes new themed lands in Disneyland Resort and Walt Disney World. At Disneyland, that expansion could result in at least $1.9 billion of development.
The size of that investment indicates how important the parks are to Disney’s bottom line. Last year, the experiences business brought in nearly 57% of the company’s operating income. Maintaining that momentum, as well as fending off competitors such as Universal Studios, is key to Disney’s continued growth.
In his new role, Mazloum will have to keep an eye on “international visitation headwinds” at its U.S.-based parks, which the company has said probably will factor into its earnings for its fiscal second quarter. At Disneyland Resort, that dip was mitigated by the park’s high percentage of California-based visitors.
Times staff writer Todd Martens contributed to this report.
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