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Chipotle Mexican Grill, Inc. CMG reported fourth-quarter 2025 results, with earnings and revenues beating the Zacks Consensus Estimate. The top line increased from the prior-year quarter’s figure, while the bottom line remained flat.
Following the results, the company's shares fell 5.9% in the after-hours trading session yesterday. Negative investor sentiments were witnessed as management highlighted declining comparable sales amid a dynamic and uncertain consumer backdrop. CMG also flagged near-term margin pressure due to elevated labor, marketing and operating costs.
For the quarter under review, CMG reported adjusted earnings per share (EPS) of 25 cents, beating the Zacks Consensus Estimate of 24 cents. The bottom line was flat on a year-over-year basis.
Quarterly revenues of $2.98 billion topped the consensus mark of $2.96 billion by 0.6%. The top line rose 4.9% on a year-over-year basis. This upside was driven by new restaurant openings and higher gift card breakage revenues of $27.0 million, up $19.1 million from the prior-year quarter.
Chipotle Mexican Grill, Inc. price-consensus-eps-surprise-chart | Chipotle Mexican Grill, Inc. Quote
Comparable restaurant sales in the fourth quarter fell 2.5% against 5.4% growth reported in the prior-year quarter. During the quarter, comps were hurt by lower transactions of 3.2%. However, this was partially mitigated by a 0.7% rise in average checks.
During the fourth quarter, digital sales contributed 37.2% to total food and beverage revenues.
Strength in new restaurant openings aided the company’s performance in the fourth quarter. In the reported quarter, Chipotle opened 132 company-owned restaurants, with 97 featuring a Chipotlane. The company reported strong performance of Chipotlanes, contributing to higher sales, better margins and stronger returns at new locations.
In the fourth quarter of 2025, food, beverage and packaging costs, as a percentage of revenues, came in at 30.2%, compared with 30.4% reported in the prior-year quarter. The improvement was driven by menu price increases, lower dairy costs and enhanced cost-of-sales efficiencies. This was partly offset by ongoing inflationary pressures, particularly in beef and chicken, as well as the impact of tariffs implemented in 2025. We expected the metric to be 30%.
In the quarter under discussion, the restaurant-level operating margin reached 23.4%, down from 24.8% reported in the prior-year period. We predicted the metric to be 24.1%.
Adjusted net income in the reported quarter amounted to $331.3 million, compared with $340 million reported in the prior-year quarter. Our estimate for the metric was $352.5 million.
As of Dec. 31, 2025, the company reported cash and cash equivalents of $350.5 million compared with $748.5 million as of Dec. 31, 2024.
As of Dec. 31, 2025, inventory totaled $49.5 million compared with $48.9 million as of Dec. 31, 2024.
Total revenues in 2025 amounted to $11.9 billion compared with $11.3 billion in 2024.
Adjusted net income in 2025 came in at $1.57 billion compared with $1.54 billion reported in 2024.
In 2025, adjusted diluted EPS came in at $1.17 compared with $1.12 reported in the previous year.
For 2026, management anticipates comparable sales to remain roughly flat. It expects to open between 350 and 370 new company-operated restaurants in 2026, with more than 80% featuring a Chipotlane. It expects a tax rate in the range of 24-26% in 2026.
Chipotle currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Retail-Wholesale sector are BJ's Restaurants, Inc. BJRI, Brinker International, Inc. EAT and Yum China Holdings, Inc. YUMC.
BJ's Restaurants currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of BJ's Restaurants have gained 27.3% in the past six months. The Zacks Consensus Estimate for BJ's Restaurants' fiscal 2026 sales and EPS indicates a rise of 2.4% and 3.3%, respectively, year over year.
Brinker presently carries a Zacks Rank #2. The stock has gained 3% in the past six months.
The Zacks Consensus Estimate for EAT’s 2026 sales and EPS implies growth of 8% and 18.7%, respectively, from the year-ago levels.
Yum China presently carries a Zacks Rank #2. The stock has gained 16.4% in the past six months.
The Zacks Consensus Estimate for Yum China’s 2026 sales and EPS indicates an increase of 6.5% and 15.5%, respectively, from the year-ago levels.
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This article originally published on Zacks Investment Research (zacks.com).
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