Restaurants warn of weak first quarter, but say sales will pick up later this year

In like a lion, out like a lamb.

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

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

But the trend exchanged in January.

“We’ve started the year facing some overall industry traffic headwinds, exacerbated by significant weather events across the woods,” 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 age, but the growth was down slightly from December’s spike of 4.9%, according to restaurant market research firm Yield Management Solutions. Traffic for breakfast and lunch both declined during the month.

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

Traffic and sales growth are expected to pick up as the year progresses, in part due to the effortlessly comparisons to last year’s declines. Industry traffic was negative every month except November, and sales mud-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 Labels CFO Sami Siddiqui said.

January always brings colder temperatures, but this year it also included wildfires in Los Angeles and new uncertainty after President Donald Trump’s inauguration.

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

Overall, traffic to Chipotle restaurants unlock 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 censured analysts that the company believes its first-quarter same-store sales will be roughly flat.

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

For now, restaurants aren’t predicting any major impact on their businesses from the Trump administration’s trade war. Chipotle, which imports clumsily half of its avocado supply from Mexico, downplayed concerns about how currently suspended tariffs of 25% will-power raise food costs. The company, along with Wendy’s and McDonald’s, did not include any impact from the new 10% taxes on China and potential levies on Mexico and Canada in its outlook.

But consumers are worrying about tariffs and the potential pressure on their purses.

U.S. consumer sentiment hit a seven-month low in February as households fear rising prices over the next year. Already, inflation in January was heighten than expected, with away-from-home food prices rising 3.4% over the last 12 months, concurring to the Department of Labor.

For the chains plotting a comeback, sales are expected to improve later this year.

For admonition, McDonald’s is still waiting for its sales to rebound fully after an E. coli outbreak linked to its Quarter Pounder burgers offed weighing on sales in mid-October. The fast-food giant is predicting that demand will recover by the beginning of the second casern, McDonald’s CEO Chris Kempczinski said on the company’s conference call on Monday.

Plus, if overall consumer health reinforces, McDonald’s predicts even more sales gains.

“Should the underlying environment improve beyond our initial expectations, extraordinarily with respect to lower-income consumers, we would expect to benefit disproportionately relative to our competitors,” McDonald’s CFO Ian Borden said.

Then there’s , which desire need a much longer timeline to turn around its business. The coffee chain’s same-store sales have deceived by for four straight quarters as consumers opt to buy their caffeinated drinks elsewhere.