Can Chipotle's Expansion Beyond North America Deliver Growth?

Chipotle Mexican Grill, Inc. CMG is broadening its footprint outside North America as part of the long-term growth strategy. In the second quarter of 2025, the company reported progress across Canada, Europe, the Middle East and the upcoming entry into Mexico, signaling confidence in international expansion as a meaningful revenue driver.

In Canada, the company now operates 61 restaurants, with sales nearly tripling in five years. Unit economics remain on par with U.S. operations, strengthening the case for further development. In Europe, the company noted improved consumer reception, projecting potential for hundreds of restaurants in current markets and possibly thousands across Western Europe over time.

The company also highlighted momentum in the Middle East. Its restaurant in Kuwait’s Avenues Mall delivered revenues above the U.S. average unit volume in the first year. With five restaurants now operating in Kuwait and Dubai, partner Alshaya Group is set to accelerate development in the second half of 2025. The company also expects to open its first restaurant with Alsea in Mexico early next year, while continuing to evaluate other partnership opportunities.

CMG emphasized that international expansion is still in the early stages. However, performance in Canada, Europe and the Middle East shows evidence of scalability. With 7,000 restaurants targeted in the United States and Canada, and significant untapped demand abroad, expansion beyond North America could provide a key growth catalyst and support the company’s long-term prospects.

Expansion Strategies Across the Fast-Casual Space

As Chipotle looks to international markets for long-term growth, other restaurant chains like Dutch Bros Inc. BROS and Shake Shack Inc. SHAK are also driving expansion to capture market share. 

Dutch Bros is accelerating its U.S. footprint with strong sales momentum. In the second quarter of 2025, revenues increased 28% year over year to $416 million, supported by 6.1% system same-shop sales growth and 3.7% transaction gains. The chain opened 31 shops during the quarter, including Dutch Bros’ entry into Indiana as the 19th state. With average unit volumes of $2.05 million and a long-term target of more than 2,000 shops by 2029, expansion remains the central growth lever.

Shake Shack is also building scale through an aggressive development pipeline. For 2025, it plans to open 45 to 50 company-operated Shacks, the largest expansion class to date, along with 35 to 40 licensed units. This represents expected system-wide growth of 14% to 16% year over year. Backed by global partner support and initiatives in operations and menu innovation, Shake Shack remains focused on strengthening its position across both domestic and international markets.

CMG’s Price Performance, Valuation and Estimates

Chipotle’s shares have lost 20.1% in the past six months compared with the industry’s decline of 4.1%.

Price Performance

From a valuation standpoint, CMG trades at a forward price-to-sales ratio of 3.96X, up from the industry’s average.

P/S (F12M)

The Zacks Consensus Estimate for CMG’s 2025 and 2026 earnings implies a year-over-year uptick of 8.04% and 17.74%, respectively.
 

Chipotle currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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