By Joel Jose

Feb 4 - Shares of burrito chain Chipotle Mexican Grill CMG.N slumped 6% and Mondelez International MDLZ.O fell 4.5% before the bell on Wednesday as dour annual sales forecasts from the companies raised worries over weak consumer demand and rising input costs.

Lower‑income households have cut back discretionary spending as they contend with higher prices, delays in food stamp benefits and a cooling labor market.

Several large consumer goods companies such as P&G PG.N, Coca‑Cola KO.N and PepsiCo PEP.O have lowered entry price points to help retain customers.

SOARING BEEF COSTS WEIGH ON CHIPOTLE

Chipotle is planning to raise menu prices by 1%-2% this year and said it expected 2026 same-store sales to be about flat, in a sign that the company does not expect a quick turnaround in demand.

"The top-line guide was a disappointment and we think also speaks to the idea that underlying restaurant industry demand has not gotten better, at least not yet," Piper Sandler analysts said.

Chipotle warned in October that consumer spending would remain pressured through early 2026, noting a pullback among U.S. households earning less than $100,000 a year, a group that accounts for about 40% of its sales.

Beef prices, which makes up the biggest commodity for Chipotle, hit record highs in the U.S. as drought forced ranchers to shrink the cattle herd.

PRICE HIKES PUSH MONDELEZ SHOPPERS AWAY

Cadbury-owner Mondelez flagged a muted year ahead, noting that higher cocoa prices are now brushing up against cooling demand from shoppers already stretching their budgets.

Cocoa prices jumped 160% in 2024 before easing on a global surplus, but the company said it has already secured its 2026 cocoa needs at rates above current market levels, limiting its ability to cut product prices immediately.

The company said consumers, particularly in the U.S., are tightening spending and shifting toward value channels, pressuring volumes after multiple rounds of price hikes to offset sharply higher cocoa costs.

"We admit the muted FY26 outlook is objectively disappointing and explicitly H2-weighted, implying a volume trajectory improvement that is difficult," Morgan Stanley analysts said.

(Reporting by Joel Jose in Bengaluru; Editing by Arun Koyyur)

((mail to: Joeljose@thomsonreuters.com))