CMG · Chipotle Mexican Grill, Inc.

Chipotle's first quarter 2026 results showed revenue growth of 7.4% to $3.1 billion, driven by new restaurant openings and a 0.5% increase in comparable restaurant sales, which returned to positive territory due to a 0.6% rise in transactions partially offset by a 0.1% decline in average check. However, profitability declined significantly: operating margin fell to 12.9% from 16.7% in the prior year, and adjusted restaurant-level operating margin dropped to 23.7% from 26.2%. The margin compression was primarily due to higher food, beverage and packaging costs (29.6% of revenue vs. 29.2%) driven by inflation in beef and freight, and higher labor costs (26.1% vs. 25.0%) from wage inflation and performance-based bonuses. General and administrative expenses rose to $203.7 million from $172.8 million, partly due to the biennial All Managers Conference. Net income decreased to $302.8 million ($0.23 per diluted share) from $386.6 million ($0.28), missing the consensus estimate of $0.25. Adjusted diluted EPS was $0.24, down from $0.29. The company repurchased $700.8 million of stock during the quarter at an average price of $36.14, leaving $1.0 billion remaining under authorization. Management's full-year 2026 guidance anticipates comparable restaurant sales to be about flat, 350-370 new restaurant openings (including 10-15 international partner-operated), and an underlying effective tax rate of 24%-26%. CEO Scott Boatwright noted the quarter exceeded expectations and highlighted progress on the Recipe for Growth strategy, including new executive hires in brand and digital roles.