Chipotle Mexican Grill (NYSE:CMG) reported fourth-quarter and full-year 2025 results that management said were in line with expectations, as the company navigated what CEO Scott Boatwright described as a “dynamic consumer backdrop” marked by increased value sensitivity and reduced overall restaurant spending.
For fiscal 2025, Chipotle posted revenue growth of 5.4% year over year, which included a 1.7% decline in comparable restaurant sales. Adjusted diluted earnings per share increased 4.5% to $1.17. The company also expanded its footprint, opening a record 334 new company-owned restaurants and 11 international partner-operated locations.
Fourth-quarter results and operating trends
Restaurant-level margin was 23.4%, down 140 basis points from the prior year. Rymer noted the margin included a 70 basis point benefit from the gift card true-up. Adjusted diluted EPS was $0.25, consistent with the year-ago period.
Management highlighted “accelerating trends throughout the quarter and into January,” supported by a decision to increase marketing activity to keep the brand “top of mind.” The company also addressed operational disruption from a multi-state winter storm, with Boatwright crediting Chipotle’s operational execution for reopening restaurants “as quickly and safely as possible.”
2026 outlook: flat comps, conservative guidance, and margin pressure
Looking ahead, Rymer said Chipotle expects full-year 2026 comparable restaurant sales to be “about flat,” describing the guidance as conservative given a difficult-to-predict consumer environment. He said underlying trends improved meaningfully in January after the launch of a new protein-focused menu and supporting marketing campaign, but the company is not heavily embedding the impact of 2026 initiatives into the full-year outlook.
For the first quarter, Rymer indicated an underlying comp trend in the range of negative 1% to negative 2%, which includes about 100 basis points of impact from storm-related restaurant closures during the quarter.
Rymer also signaled pressure on 2026 margins, primarily because Chipotle expects pricing to lag inflation in the near term as it prioritizes value. In the first quarter, pricing is expected to contribute about 70 basis points while inflation is expected to be near the mid-single digits, which Rymer characterized as a significant temporary headwind that should narrow through the year. On a full-year basis, he projected pricing of roughly 1% to 2% against inflation of about 3% to 4%.
On cost drivers, Rymer said:
- Cost of sales: 30.2% of sales in Q4, down about 20 basis points year over year, with benefits from pricing, lower dairy prices, and efficiencies offsetting inflation in beef and chicken and the impact of tariffs. Tariffs were about a 30 basis point headwind in Q4, but the company expects an ongoing tariff impact of roughly 15 basis points following the “recent removal” of tariffs on beef and other agricultural goods.
- Labor: 25.5% of sales in Q4, up about 30 basis points year over year; Q1 labor costs expected in the high-25% range with low-single-digit wage inflation.
- Other operating costs: 15.5% of sales in Q4, up about 100 basis points year over year, driven by higher marketing, delivery, and utilities and lower volumes. Marketing was 3.5% of sales in Q4 and is expected to remain mid-3% in Q1 and low-3% for the full year.
“Recipe for Growth” strategy: equipment, innovation, loyalty, and new occasions
Boatwright framed Chipotle’s updated playbook as a “Recipe for Growth,” centered on operational and culinary execution, refreshed brand messaging, increased menu innovation, technology investments (including AI), global expansion, and talent development.
A key operational initiative is the rollout of its High Efficiency Equipment Package (HEEP). Boatwright said the equipment can reduce prep time by two to three hours, improve consistency (including “juicier steak and chicken”), and support better throughput. The company is reinvesting time savings back into restaurants for hospitality, but said early performance has been encouraging. Chipotle currently has 350 restaurants with the full equipment package and expects about 2,000 by year-end, with a potential path to completing rollout sometime in 2027. Boatwright said stores with HEEP are seeing “hundreds of basis points” of comparable sales improvement, alongside higher guest satisfaction and food quality scores.
On menu and marketing, Chipotle plans to increase its limited-time offer cadence to four LTOs in 2026, with Chicken Al Pastor returning on February 10. Boatwright said the item is the “most celebrated” LTO in Chipotle’s history based on social media requests. Management also pointed to early success from a high-protein lineup, including a single taco with 15 grams of protein priced at $3.50 and a new protein cup around $3.80. According to Boatwright, extra protein incidence increased 35%, and a recent double-protein promotion delivered a record digital sales day.
Chipotle also discussed expanding “group occasions,” including its “Build Your Own Chipotle” offering for groups of four to six and catering tests. Management said the two group occasion platforms currently represent less than 3% of combined sales but could reach a double-digit percentage over time.
In digital, Chipotle expects to relaunch its rewards program in the spring, aiming to increase in-restaurant participation and reduce checkout friction. The company ended 2025 with more than 21 million active rewards members. Boatwright said about 30% of sales currently flow through the rewards platform, but only about 20% of in-restaurant transactions are tied to rewards, compared with nearly 90% of app transactions. Management also discussed using AI to identify and re-engage lapsed users with more personalized journeys.
Expansion, balance sheet, and leadership updates
Chipotle ended 2025 with more than 4,000 restaurants after opening 345 new locations (334 company-owned plus partner-operated openings). For 2026, Boatwright said the company plans to build 350 new company-owned restaurants—about one new Chipotle per day—and reiterated confidence in reaching 7,000 locations in North America over the long term. He added that the company would consider slowing development if cannibalization rises materially, new-unit performance drops versus the existing base, or returns deteriorate.
Internationally, Chipotle said Europe began 2025 with positive comps and improved economics, with Central London and Frankfurt reaching strong cash-on-cash returns that “unlocked growth” for 2026. In the Middle East, the company’s partner opened 11 locations in 2025, bringing the regional total to 14. Boatwright said the company plans to nearly double its Middle East footprint and sales in 2026, including entry into Saudi Arabia, and remains on track to open first restaurants in Mexico, Singapore, and South Korea through partner-operated markets.
Financially, Chipotle ended the quarter with $1.3 billion in cash, restricted cash, and investments and no debt. The company repurchased $742 million of stock in Q4 at an average price of $34.14, bringing full-year 2025 repurchases to a record $2.4 billion. The board approved an additional $1.8 billion repurchase authorization, leaving $1.7 billion available at quarter-end.
On leadership, Boatwright said Roger Theodoredis and Chris Brandt transitioned out of their roles, and Chipotle promoted Ilene Eskenazi to Chief Legal and Human Resources Officer. The company is conducting a national search for a new Chief Marketing Officer, and also plans to hire a Chief Digital Officer and a vice president of emerging technologies as it expands its technology and innovation efforts.
In closing remarks, Boatwright said management believes the updated strategy will help Chipotle “win by investing in operational excellence,” accelerating innovation, relaunching rewards, deploying new technology, and expanding globally, while maintaining its focus on value and ingredient standards.
About Chipotle Mexican Grill (NYSE:CMG)
Chipotle Mexican Grill is a fast-casual restaurant company known for its Mexican-inspired menu of burritos, bowls, tacos and salads. Founded in 1993 by Steve Ells, the chain emphasizes fresh, customizable meals made from a limited menu of core ingredients and a focus on ingredient quality. Chipotle operates primarily company-owned restaurants and offers dine-in, takeout, catering and delivery through its own digital platforms and third-party partners.
The company is headquartered in Newport Beach, California, and traces its roots to Denver, Colorado.
