Chipotle Earnings: Sales Slip, Growth Plan Launched

Chipotle Mexican Grill reported earnings on Feb. 3, 2026, showing revenue gains from new restaurant openings even as comparable-restaurant sales and transactions declined. Management introduced a "Recipe for Growth" strategy and set guidance for about flat comparable sales in fiscal 2026.

Quarter and Full-Year Results

Chipotle posted total revenue of $11.9 billion for fiscal 2025, a 5.4% increase from the prior year, driven by new unit growth. Same-store sales fell 1.7% for the year as transactions declined 2.9% while the average check rose 1.2%. Digital orders accounted for 36.7% of food-and-beverage revenue.

In the fourth quarter, revenue rose 4.9% to $3.0 billion, supported by new restaurants and $27.0 million in gift-card breakage, which was $19.1 million higher than a year earlier. Comparable-restaurant sales dropped 2.5%, with transactions down 3.2% and average check up 0.7%. The quarterly transaction decline marked the fourth consecutive drop, and digital sales represented 37.2% of food-and-beverage revenue.

Margins and earnings per share reflected pressure from costs and weaker traffic. For the year, restaurant-level operating margin narrowed to 25.4% from 26.7%, and operating margin declined to 16.2% from 16.9%. Food, beverage, and packaging costs represented 29.6% of revenue, while labor expenses rose to 25.1% from 24.7%. In the fourth quarter, restaurant-level margin fell to 23.4% from 24.8%, and operating margin declined to 14.1% from 14.6%. Diluted EPS was $0.25 for the quarter and $1.14 for the year, with adjusted EPS of $0.25 and $1.17, respectively.

Guidance and Growth Strategy

Chipotle’s guidance for fiscal 2026 calls for comparable-restaurant sales to be about flat. The company plans to open 350 to 370 new restaurants, including 10 to 15 international partner-operated locations. Approximately 80% of new company-owned restaurants are expected to include a Chipotlane, the chain’s drive-thru format. Management also projected an underlying effective tax rate of 24% to 26% before discrete items.

As of Dec. 31, 2025, Chipotle operated 4,056 restaurants, including 14 international partner-operated units. In fiscal 2025, it opened 334 company-owned restaurants—257 with Chipotlane—and 11 partner-operated locations. The company repurchased $2.4 billion of stock at an average price of $42.54 per share. Menu price increases helped offset inflation in key proteins such as beef and chicken, but tariffs, wage inflation, and lower volumes pressured margins.

The "Recipe for Growth" strategy focuses on tighter core operations and culinary execution, brand and menu innovation, a tech and AI relaunch including Rewards, global expansion, and talent development. Early pilots include a high-protein menu and a high-efficiency equipment package (HEAP). The company said this strategy should position it for long-term success by increasing transactions and improving accuracy, efficiency, and speed.

Chipotle expects to file its Annual Report on Form 10-K with the Securities and Exchange Commission in early February 2026.