Chipotle Mexican Grill, Inc. (CMG) Earnings

Chipotle Mexican Grill, Inc.

CMG · NYSE

Symbol: CMG
Type: Stock
Sector: Consumer Discretionary
Industry: Restaurants
Exchange: NYSE

Chipotle Mexican Grill, Inc. (NYSE: CMG) is cultivating a better world by serving responsibly sourced, classically-cooked, real food with wholesome ingredients without artificial colors, flavors or preservatives. There are over 4,200 restaurants as of September 30, 2026, in the United States, Canada, the United Kingdom, France, Germany, Mexico, the Middle East, and South Korea. Chipotle is the only restaurant company of its size that owns and operates all its restaurants in the United States, Canada and Europe. With nearly 140,000 employees passionate about providing a great guest experience, Chipotle is a longtime leader and innovator in the food industry. Chipotle is committed to making its food more accessible to everyone while continuing to be a brand with a demonstrated purpose as it leads the way in digital, technology and sustainable business practices.

Key Issues

Bullish view

Chipotle responded by removing jalapeños from certain Minnesota restaurants, and the reported issue appears geographically concentrated. A prompt response could limit disruption to traffic and brand perception.

Bearish view

Reports linked a Salmonella outbreak to jalapeños used at multiple Chipotle locations in Minnesota, prompting a nearly 10% share-price decline. Food-safety concerns could weaken traffic and increase scrutiny beyond the affected restaurants.

Analyst Consensus

See all

Buy

30 analysts

$33

Current

—

Low

$40

Average

—

High

Average target implies +20.19% versus the current price.

Earnings History

BeatMissNo estimate

Dec 2026upcoming

Next quarter

Expected to report Feb 2, 2027 — estimated from last year’s reporting date.

Consensus is $0.26 EPS for Dec 2026 across 12 estimates, ranging $0.24 to $0.36.

CMG Sep 2026

Reported Oct 28, 2026 · after the close

: 6.90%
: +8.88%

: $0.29
: $0.27
: —
: $3.29B

Reported results

: $3.29B; from $3.00B
: $451.96M; from $477.17M
: 13.72%; from 15.89%
: $339.87M; from $382.10M
: $0.27; from $0.29

Highlights

EPS miss: Diluted EPS was $0.27 versus $0.29 a year ago and consensus of $0.29, a 6.9% shortfall; adjusted diluted EPS was also $0.27.
Sales growth, modest comps: Revenue rose 9.6% year over year to $3.29 billion, driven mainly by new restaurants; comparable sales increased 2.1%, with transactions up 0.8% and average check up 1.3%.
Margins contracted: Operating margin fell to 13.7% from 15.9% a year ago, while restaurant-level operating margin declined to 23.3% from 24.5%; operating income was $452.0 million versus $477.2 million.
Consumer trends turned choppy: Management said industry headwinds slowed sales from mid-July; comps returned to prior levels by late August, September finished up 3.8% with little promotion, and October trends softened before transactions returned to positive.
Fourth-quarter outlook: Management expects roughly 2% Q4 comparable sales growth and a margin just under 22%, about 150 basis points below last year; full-year 2026 comp guidance remains low single digits.
Digital and loyalty: Digital sales were 38.8% of food and beverage revenue, up from 36.7%; Rewards membership exceeded 24 million and loyalty represented more than 33% of sales.
Efficiency rollout: High-efficiency equipment was installed in more than 1,700 restaurants; equipped locations are generating hundreds of basis points of comparable-sales uplift and more than two additional entrees during peak 15-minute periods.
Restaurant expansion: Chipotle opened 84 company-owned restaurants, 53 with Chipotlanes, and five partner-operated locations, entering Mexico, Saudi Arabia and South Korea.
Cost pressures: Labor rose to 25.7% of revenue from 25.2%, and other operating costs rose to 16.0% from 15.0%; food, beverage and packaging costs improved to 29.5% from 30.0%.

Analysis

Chipotle’s third quarter delivered continued sales growth but weaker earnings than expected: revenue increased 9.6% year over year to $3.29 billion, while diluted EPS of $0.27 missed $0.29 consensus by 6.9%. Comparable sales rose 2.1%, the third consecutive positive transaction quarter, but growth was modest and uneven. Revenue was down from $3.35 billion in Q2, operating income fell to $452.0 million from $525.6 million, and EPS declined from $0.32; year over year, operating income was down from $477.2 million and EPS from $0.29.

The central tension was demand against costs. Industry headwinds slowed sales from mid-July; management reported recovery by late August and a 3.8% comp in September, but said October softened before transactions returned to positive. At the same time, operating margin contracted 220 basis points year over year to 13.7%, with restaurant-level margin down 120 basis points to 23.3%. Lower food costs helped, but labor, marketing, other operating expenses and higher G&A weighed on results. Management held its low-single-digit full-year comp outlook, while expecting roughly 2% Q4 comps and a margin just under 22%. The company also emphasized early traction from equipment upgrades, Rewards and menu innovation, alongside continued rapid store growth.

Comparable sales and demand

Comparable sales increased 2.1%, comprising 0.8% transaction growth and a 1.3% increase in average check. Pricing contributed about 2.7% during the quarter, while check mix was negative 1.4%; management linked the mix pressure partly to smaller group sizes as Rewards use increased. Digital sales reached $1.3 billion, or 38.8% of food and beverage revenue, compared with 36.7% a year earlier.

Management described a mid-quarter slowdown tied to broader industry and consumer headwinds, followed by normalization in late August and a September comp of 3.8% with little promotional activity. October softened in line with the industry, although management said transactions had returned to positive. For Q4, it expects comps of around 2%, with a 3%–4% exit rate as Smoked Brisket and marketing initiatives take effect.

Margin and cost pressures

Operating income declined 5.3% year over year to $452.0 million despite higher revenue, and operating margin fell to 13.7% from 15.9%. Net income was $339.9 million versus $382.1 million, while adjusted net income was $344.6 million versus $389.9 million. Restaurant-level operating margin decreased to 23.3% from 24.5%.

Food and packaging costs improved by 50 basis points to 29.5% of revenue, as pricing, tariff relief and favorable limited-time-offer mix more than offset beef and freight inflation and higher protein usage. Labor increased 50 basis points to 25.7%, reflecting wage inflation, lower sales volumes, promotional labor and insurance costs. Other operating costs rose 100 basis points to 16.0%, including higher marketing, delivery, utilities and maintenance; G&A increased to $185.2 million from $146.7 million. Management expects Q4 restaurant-level margin just under 22%, roughly 150 basis points below the prior year, citing sales volume, marketing for Brisket and a prior-year gift-card breakage benefit.

Operations and digital

Equipment rollout: High-efficiency equipment was in more than 1,700 restaurants, with a goal of about 2,000 by year-end. Management cited hundreds of basis points of comparable-sales uplift at equipped locations, stronger guest and food scores, and more than two additional entrees during peak 15-minute periods; it expects benefits to continue building as installations mature.
Rewards engagement: Active Rewards membership exceeded 24 million, and loyalty sales share reached a record above 33%. The Summer of Extras drew 6.8 million participants. A frictionless Apple Pay rewards pilot is expected to progress through testing in Q4, with broader rollout planned for 2027.
Menu and occasions: Pollo Asado and Chili Lime Chips launched together in August; Pollo Asado attachment was in the low-20% range and management said the launches drove incremental transactions. Family Meals sales increased more than 30% after a campaign, while catering is planned for national rollout in Q1 2027. Catering and Family Meals together currently represent about 3% of sales.

Restaurant and global growth

Chipotle opened 84 company-owned restaurants in the quarter, including 53 with Chipotlanes, and five partner-operated restaurants. The company reached 4,267 company-owned restaurants and 20 partner-operated locations; it also opened its first partner-operated restaurants in Mexico, Saudi Arabia and South Korea. Management said opening demand in the new markets was strong, with Mexico volumes above initial expectations and record opening volumes in Saudi Arabia.

The company maintained its 2026 target of 350–370 openings, including 10–15 international partner-operated restaurants, with about 80% of new company-owned restaurants expected to include a Chipotlane. For 2027, it expects 340–360 company-owned openings in the U.S. and Canada and 15–25 company-owned and partner-operated restaurants outside those markets.

Outlook and capital

Management kept its 2026 comparable-sales outlook at low single digits and its underlying effective tax-rate estimate at 24%–26%. It expects Q4 food and packaging costs around 30.5%, driven mainly by Smoked Brisket, and labor costs around 26%. Management said overall inflation could remain in the low- to mid-single digits in 2027 and expects to manage longer-term inflation through measured pricing.

Chipotle repurchased $110.0 million of stock during Q3 at an average $34.05 per share, with $1.6 billion remaining under authorization. The balance sheet included $1.0 billion in cash, restricted cash and investments, and the company had no debt outstanding. Nine-month operating cash flow was $1.92 billion, versus $1.69 billion a year earlier.