McDonald’s, Chipotle warn of weak first quarter

In like a lion, out like a lamb.

That’s how restaurant executives envision 2025 after a rough start to the year, largely caused by freezing temperatures, wildfires and consumer caution.

Many restaurant chains, like Restaurant Brands’ Burger King and Popeyes, said sales improved in the fourth quarter as value offerings brought back diners who had been cooking at home instead. Even McDonald’s domestic traffic grew, despite a 1.4% decline in U.S. same-store sales.

But the trend reversed in January.

“We’ve started the year facing some overall industry traffic headwinds, exacerbated by significant weather events across the country,” Wendy’s CFO Kenneth Cook said on the company’s conference call on Thursday.

Fast-food net sales rose 3.4% in January, compared with the year-ago period, but the growth was down slightly from December’s spike of 4.9%, according to restaurant market research firm Revenue Management Solutions. Traffic for breakfast and lunch both declined during the month.

“I think consumers are still wary,” Subway U.S. President Doug Fry told CNBC. “I think they’re waiting to see how the economy goes, but they’re also not willing to sacrifice that quality and portion size and the quantity of what they’re eating. They want to find that best value for the dollar they spend.”

Traffic and sales growth are expected to pick up as the year progresses, in part due to the easy comparisons to last year’s declines. Industry traffic was negative every month except November, and sales slid over the summer, which is typically a high point for restaurants.

“We expect year-over-year comparisons to ease into the summer months,” Restaurant Brands CFO Sami Siddiqui said.

Chipotle Mexican Grill estimates that the wildfires hurt its January same-store traffic growth by 400 basis points, or 4%.

Overall, traffic to Chipotle restaurants open at least a year fell 2% in January compared with a year ago, hurt by the weather and New Year’s Day falling on a Wednesday. Chipotle CFO Adam Rymer told analysts that the company believes its first-quarter same-store sales will be roughly flat.

Looking to the second quarter, Chipotle also expects weaker same-store sales as it faces comparisons to last year’s popular promotions. While the company predicts stronger sales in the second half of the year, its weak forecast for the coming months led to a 4% decline in the stock.

For now, restaurants aren’t predicting any major impact on their businesses from the Trump administration’s trade war. Chipotle, which imports roughly half of its avocado supply from Mexico,