She Predicted Chipotle’s Fall in 6 Words… Now Its -13% and Praying Adobo Ranch Can Save the Stock

I still remember when Chipotle’s CEO left for Starbucks. Like… left left. Brian Niccol, the LeBron James of fast food CEOs. The guy who took Chipotle from E.coli punchline to Wall Street’s favorite restaurant. The man who made queso almost acceptable again. That guy packed up his stuff and took his talents to Seattle for what can only be described as a Saudi-prince-level offer.

My wife, who knows absolutely nothing about the stock market (like, she thinks a “dip” is just when Amazon runs out of stock), looked up from her phone and asked, “Does this mean Chipotle is gonna suck again?” I laughed. Because I, being the well-informed financial genius in the house, thought: “Nah. Chipotle’s built different. They’ve got systems, automation, supply chain wizardry. They could replace the CEO with a Roomba and still beat earnings.”

Well, turns out I’m the Roomba. Because she was right. Chipotle is down 13% this year. It’s having its worst streak since people were still washing their hands to the Happy Birthday song. And now, in what might be the most desperate move since Subway tried to sell us protein bowls, Chipotle’s banking its comeback on… ranch.

Yes. Ranch. Not new technology. Not AI. Not drone burrito deliveries. Ranch dressing. They’re calling it Adobo Ranch, which sounds like something Guy Fieri would yell during a Triple D episode. It’s spicy. It’s creamy. It’s gonna cost you an extra 75 cents… because tacking on hidden fees is gonna save their stock price.

And the reason for this is because the first quarter was rougher than that time they tried to roll out chorizo. Same-store sales fell 0.4%, marking their first dip since the pandemic. Traffic was down 2.3%, and margins took a 130 basis point hit thanks to food inflation, labor costs, and Americans apparently ordering double meat like crazy (shouldn’t this be making them money?).

So now, Chipotle’s clinging to the fact that ranch has officially overtaken ketchup in U.S. popularity (which, side note, might be the most American statistic I’ve ever seen). If you believe Bernstein, this is a short-term blip. They bumped their price target to $65 and say Chipotle’s still got the juice long-term. Maybe. But right now, this feels more like a sauce-driven coping mechanism.

They’ve also brought in Jason Kidd (no, not the basketball legend, but the guy from Taco Bell) as the new COO to help steady the ship. Because when in doubt, call in the guy who figured out how to sell people a Doritos taco with a straight face.

I’ll admit, I love Chipotle. But I don’t love the math. P/E is still north of 44x, the stock hasn’t kept up with the broader market, and now they’re staring down tough comps from last year’s growth bender. UBS cut their price target. JPMorgan dialed theirs down to $54. Even the optimistic takes are basically saying, “Give it six months and maybe it’ll stop bleeding.”

And I can’t stop thinking about what my wife said. That one throwaway comment… “Does this mean Chipotle’s gonna suck again?” If this ranch thing doesn’t stick, I might be forced to admit she’s the Ray Dalio of burrito predictions. Just don’t tell her that. I’ll never hear the end of it.

At the time of publishing this article, Stocks.News holds positions in Starbucks and Amazon as mentioned in the article.