CHIPOTLE ANNOUNCES FOURTH QUARTER AND FULL YEAR 2025 RESULTS
Rhea-AI Summary
Chipotle (NYSE: CMG) reported fourth-quarter and full-year 2025 results on Feb 3, 2026, and launched a new "Recipe for Growth" strategy to boost transactions, accuracy, efficiency and speed. Full-year revenue rose 5.4% to $11.9 billion; comparable restaurant sales declined 1.7%.
Management opened 334 company-owned restaurants in 2025, repurchased $2.4 billion of stock, and issued 2026 guidance for ~350–370 new openings and about flat comparable sales.
Positive
- Total revenue +5.4% to $11.9 billion in 2025
- Opened 334 company-owned restaurants in 2025
- Repurchased $2.4 billion of stock during 2025
- Adjusted diluted EPS +4.5% to $1.17 for 2025
Negative
- Full-year comparable restaurant sales -1.7%
- Comparable restaurant transactions -2.9% in 2025
- Operating margin declined to 16.2% from 16.9%
- Quarterly comparable restaurant sales -2.5%
News Market Reaction – CMG
On the day this news was published, CMG gained 1.94%, reflecting a mild positive market reaction. Argus tracked a trough of -6.5% from its starting point during tracking. Our momentum scanner triggered 14 alerts that day, indicating notable trading interest and price volatility. This price movement added approximately $986M to the company's valuation, bringing the market cap to $51.79B at that time. Trading volume was elevated at 2.2x the daily average, suggesting notable buying interest.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
CMG is down 0.93% while key peers show mixed moves: YUM +0.15%, QSR +0.07%, SBUX -0.17%, DRI -0.22%, YUMC +3.31%. With no peers in the momentum scanner, trading appears more CMG-specific than sector-driven.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Oct 29 | Q3 2025 earnings | Positive | -1.2% | Revenue up 7.5% with slight comp growth and continued expansion, yet shares fell. |
| Jul 23 | Q2 2025 earnings | Negative | -13.3% | Revenue growth but 4% comp decline and margin/EPS pressure drove a sharp drop. |
| Apr 23 | Q1 2025 earnings | Neutral | +1.6% | Mixed comps with EPS growth and modest margin improvement saw a small gain. |
| Feb 04 | Q4 2024 earnings | Positive | -2.6% | Strong double-digit revenue and comp growth but stock traded lower afterward. |
| Oct 29 | Q3 2024 earnings | Positive | -7.9% | Robust revenue and comp increases with better operating margin met with selloff. |
Recent earnings often showed negative price reactions even when revenue and EPS trends were solid, indicating a tendency for the stock to sell off on strong or mixed earnings updates.
Across the last five earnings reports from Oct 2024 through Oct 2025, Chipotle consistently grew revenue but saw slowing or negative comparable restaurant sales in 2025. Several quarters in 2024 and early 2025 highlighted strong top-line growth and improved or stable operating margins, yet shares frequently declined post-release. Management repeatedly guided to modest comparable sales and steady unit expansion, laying the groundwork for today’s 2025 results and 2026 outlook on flat comps and continued restaurant openings.
Historical Comparison
In the past five earnings releases, CMG’s average move was about 5.32%, with several strong fundamental quarters still met by negative price reactions.
Earnings releases show a shift from strong positive comps in 2024 to declining comps in 2025, while revenue growth and unit expansion continued, framing today’s flat 2026 comp outlook.
Market Pulse Summary
This announcement highlights modest revenue growth, with Q4 2025 sales at $3.0 billion and full year revenue of $11.9 billion, alongside declining comparable restaurant sales and some margin compression. Management introduced the "Recipe for Growth" strategy and guided 2026 comps to be about flat while planning 350–370 openings. Historically, earnings updates have sometimes met with skepticism, so investors may focus on traffic trends, margin trajectory, and execution of new growth initiatives.
Key Terms
comparable restaurant sales financial
restaurant level operating margin financial
digital sales financial
gift card breakage revenue financial
non-GAAP financial
AI-generated analysis. Not financial advice.
LAUNCHES "RECIPE FOR GROWTH" STRATEGY TO GROW TRANSACTIONS AND DRIVE ACCURACY, EFFICIENCY AND SPEED
FULL YEAR TOTAL REVENUE INCREASED
Fourth quarter highlights, year over year:
- Total revenue increased
4.9% to$3.0 billion - Comparable restaurant sales decreased
2.5% - Operating margin was
14.1% , a decrease from14.6% - Restaurant level operating margin1 was
23.4% , a decrease from24.8% - Diluted earnings per share was
$0.25 4.2% increase from$0.24 - Adjusted diluted earnings per share1 remained flat at
$0.25 - Opened 132 company-owned restaurants, with 97 locations including a Chipotlane, and seven international partner-operated restaurants
Full year 2025 highlights, year over year:
- Total revenue increased
5.4% to$11.9 billion - Comparable restaurant sales decreased
1.7% - Operating margin was
16.2% , a decrease from16.9% - Restaurant level operating margin1 was
25.4% , a decrease from26.7% - Diluted earnings per share was
$1.14 2.7% increase from$1.11 - Adjusted diluted earnings1 per share was
$1.17 4.5% increase from$1.12 - Opened 334 company-owned restaurants, with 257 locations including a Chipotlane, and 11 international partner-operated restaurants
"Through our proven business model, prudent investments in operational excellence and the support of a strong balance sheet, 2025 was a year of progress and resilience for Chipotle. Against a dynamic consumer backdrop, we opened a record number of restaurants globally and grew Q4 and full year revenue," said Scott Boatwright, Chief Executive Officer, Chipotle. "This momentum will fuel our next phase of growth, driven by our 'Recipe for Growth' strategy which leans into what uniquely differentiates our brand to accelerate transactions and expand our footprint globally."
Results for the three months ended December 31, 2025:
Total revenue in the fourth quarter of 2025 was
During the fourth quarter we opened 132 company-owned restaurants, of which 97 included a Chipotlane, and seven international partner-operated restaurants. Chipotlanes continue to perform well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins and returns.
Food, beverage and packaging costs in the fourth quarter of 2025 were
Labor costs in the fourth quarter of 2025 were
General and administrative expenses for the fourth quarter of 2025 were
The effective income tax rate for the fourth quarter of 2025 was
Net income for the fourth quarter of 2025 was
During the fourth quarter of 2025 we repurchased
Results for the full year ended December 31, 2025:
Total revenue for 2025 was
As of December 31, 2025, there were a total of 4,056 Chipotle restaurants including 14 international partner-operated restaurants. During 2025, we opened 334 company-owned restaurants, of which 257 included a Chipotlane, and 11 international partner-operated restaurants.
Food, beverage and packaging costs for 2025 were
Labor costs for 2025 were
General and administrative expenses for 2025 were
The effective income tax rate for 2025 was
Net income for 2025 was
During 2025, we repurchased
More information will be available in our Annual Report on Form 10-K, which will be filed with the SEC in early February 2026.
"Recipe for Growth" Strategy
Chipotle's "Recipe for Growth" strategy is leaning into what uniquely differentiates the brand, all to accelerate growth and sharpen competitiveness. Specifically, the strategy is grounded in five key areas, aimed at building a stronger, more profitable Chipotle:
- Protect and strengthen the core by driving operational and culinary excellence to deliver exceptional value for our guests;
- Evolve the brand messaging and accelerate menu innovation and new occasions that drive demand into our restaurants;
- Modernize our business model with industry-leading technology, including leveraging AI and relaunching our Rewards Program, to elevate the experience for our guests and teams;
- Expand our global reach by scaling with intention through proven, company-owned and partner-operated markets, as well as strategic new regions; and
- Cultivate the best talent in the industry that is energized and focused on speed and agility.
"Our 'Recipe for Growth' strategy should position us for success over the long-term by growing transactions and driving accuracy, efficiency and speed. We are deploying these initiatives and beginning to see results, including the early success of our high-protein menu and benefits from our high-efficiency equipment package," said Boatwright. "At the center of our strategy is the strength and relevance of our brand and our unwavering commitment to sourcing the best ingredients. We are confident in the opportunity ahead and our ability to delight guests and deliver value for shareholders."
Outlook
For 2026, management is anticipating the following:
- Full year comparable restaurant sales to be about flat
- 350 to 370 new restaurant openings, which includes 10 to 15 international partner-operated restaurants. Around
80% of company-owned restaurants will have a Chipotlane - An estimated underlying effective full year tax rate between
24% and26% before discrete items
Definitions
The following definitions apply to these terms as used throughout this release:
- Comparable restaurant sales, or sales comps, and comparable restaurant transactions, represent the change in period-over-period total revenue or transactions for company-owned restaurants in operation for at least 13 full calendar months.
- Average restaurant sales refers to the average trailing 12-month food and beverage revenue for company-owned restaurants in operation for at least 12 full calendar months.
- Restaurant level operating margin represents total revenue less direct restaurant operating costs, expressed as a percent of total revenue.
- Digital sales represent food and beverage revenue for company-owned restaurants generated through the Chipotle website, Chipotle app or third-party delivery aggregators. Digital sales include revenue deferrals associated with Chipotle Rewards.
- Partner-operated restaurants - Chipotle restaurants over which Chipotle does not have a controlling financial interest and for which Chipotle does not directly manage day-to-day operations. This includes restaurants operated by third parties pursuant to license or franchise agreements and restaurants in which Chipotle holds a minority, non‑controlling ownership interest.
Conference Call Details and Supplemental Slides
Chipotle will host a conference call on Tuesday, February 3, 2026, at 4:30 PM Eastern time to discuss our fourth quarter and fiscal year 2025 financial results as well as provide a business update on the Company's "Recipe for Growth" strategy and the first quarter of 2026. In connection, supplemental slides for the call will be available on the company's website at ir.chipotle.com/events.
The conference call can be accessed live over the phone by dialing 1-888-317-6003, or for international callers, by dialing 1-412-317-6061 and using code: 3258333. The call will be webcast live on the company's website at ir.chipotle.com/events. An archived webcast will be available approximately one hour after the end of the call.
About Chipotle
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 4,000 restaurants as of December 31, 2025, in
Forward-Looking Statements
Certain statements in this press release, in the February 3, 2026, conference call and in the supplemental slides for the call are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements under "Outlook" and "Recipe for Growth Strategy," and about our anticipated full year 2026 comparable restaurant sales growth, number of new company-owned and international partner-owned restaurant openings in 2026, expected number of restaurants with Chipotlanes, and estimated underlying effective 2026 full year tax rate, as well as statements about the expected success of our "Recipe for Growth" strategy, our future food, beverage, packaging, labor, general and administrative and other costs, future estimated tax rates and future long-term prospects. We use words such as "anticipate", "believe", "could", "should", "may", "approximately", "estimate", "confident", "assuming", "expect", "intend", "project", "target", "goal" and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this press release are based on currently available operating, financial and competitive information available to us as of the date of this release and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements, including but not limited to: wage inflation and state or local regulations mandating higher minimum wages; the competitive labor market, which impacts our ability to attract and retain qualified employees; the impact of any union organizing efforts and our responses to such efforts; increases in ingredient and other operating costs and the inability of our third-party suppliers and business partners to fulfill their commitments due to inflation, global conflicts, climate change, extreme weather, our Food with Integrity philosophy, tariffs or trade restrictions and supply shortages; risks of food safety incidents and food-borne illnesses; our reliance on certain information technology systems operated by us or by third parties and potential failures, outages or interruptions; our reliance on third party delivery services; privacy and cybersecurity risks, including risk of breaches, unauthorized access, theft, modification, destruction or ransom of guest or employee personal or confidential information stored on our network or the network of third-party providers; the impact of competition, including from sources outside the restaurant industry; the impact of laws and regulations governing employment practices, restaurant design and construction, and the sale of food or alcoholic beverages; our ability to preserve, grow, and leverage our brand reputation; the impact of our brand, marketing, promotional, advertising and pricing strategies, digital platform, menu innovations; our ability to achieve our planned growth, such as the costs and availability of suitable new restaurant sites, and the necessary restaurant equipment, technology, construction materials and contractors; and the expected costs of our international expansion plans, including through partner-operated restaurants in the
1 | Restaurant level operating margin, adjusted diluted earnings per share, adjusted net income, non-GAAP general and administrative expenses, and non-GAAP effective income tax rate are non-GAAP financial measures. Reconciliations to GAAP measures and further information are set forth in the table at the end of this press release. |
CHIPOTLE MEXICAN GRILL, INC. | |||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||
(in thousands, except per share data) | |||||||
(unaudited) | |||||||
Three months ended December 31, | |||||||
2025 | 2024 | ||||||
Food and beverage revenue | $ 2,969,211 | 99.5 % | $ 2,829,988 | 99.5 % | |||
Delivery service revenue | 14,300 | 0.5 | 15,322 | 0.5 | |||
Total revenue | 2,983,511 | 100.0 | 2,845,310 | 100.0 | |||
Restaurant operating costs (exclusive of depreciation | |||||||
Food, beverage and packaging | 900,155 | 30.2 | 866,252 | 30.4 | |||
Labor | 760,524 | 25.5 | 716,865 | 25.2 | |||
Occupancy | 162,493 | 5.4 | 146,442 | 5.1 | |||
Other operating costs | 461,567 | 15.5 | 411,490 | 14.5 | |||
General and administrative expenses | 160,341 | 5.4 | 191,216 | 6.7 | |||
Depreciation and amortization | 92,702 | 3.1 | 83,876 | 2.9 | |||
Pre-opening costs | 16,946 | 0.6 | 12,905 | 0.5 | |||
Impairment, closure costs, and asset disposals | 8,464 | 0.3 | 532 | - | |||
Total operating expenses | 2,563,192 | 85.9 | 2,429,578 | 85.4 | |||
Income from operations | 420,319 | 14.1 | 415,732 | 14.6 | |||
Interest and other income, net | 13,324 | 0.4 | 23,365 | 0.8 | |||
Income before income taxes | 433,643 | 14.5 | 439,097 | 15.4 | |||
Provision for income taxes | 102,711 | 3.4 | 107,333 | 3.8 | |||
Net income | $ 330,932 | 11.1 % | $ 331,764 | 11.7 % | |||
Earnings per share: | |||||||
Basic | $ 0.25 | $ 0.24 | |||||
Diluted | $ 0.25 | $ 0.24 | |||||
Weighted-average common shares outstanding: | |||||||
Basic | 1,314,871 | 1,361,358 | |||||
Diluted | 1,319,988 | 1,368,923 | |||||
CHIPOTLE MEXICAN GRILL, INC. | |||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||
(in thousands, except per share data) | |||||||
Year ended December 31, | |||||||
2025 | 2024 | ||||||
(unaudited) | |||||||
Food and beverage revenue | $ 11,866,051 | 99.5 % | $ 11,247,384 | 99.4 % | |||
Delivery service revenue | 59,550 | 0.5 | 66,469 | 0.6 | |||
Total revenue | 11,925,601 | 100.0 | 11,313,853 | 100.0 | |||
Restaurant operating costs (exclusive of depreciation | |||||||
Food, beverage and packaging | 3,526,992 | 29.6 | 3,374,516 | 29.8 | |||
Labor | 2,991,680 | 25.1 | 2,789,789 | 24.7 | |||
Occupancy | 624,898 | 5.2 | 563,374 | 5.0 | |||
Other operating costs | 1,755,824 | 14.7 | 1,568,482 | 13.9 | |||
General and administrative expenses | 652,017 | 5.5 | 697,483 | 6.2 | |||
Depreciation and amortization | 361,382 | 3.0 | 335,030 | 3.0 | |||
Pre-opening costs | 49,507 | 0.4 | 41,897 | 0.4 | |||
Impairment, closure costs, and asset disposals | 27,503 | 0.2 | 26,949 | 0.2 | |||
Total operating expenses | 9,989,803 | 83.8 | 9,397,520 | 83.1 | |||
Income from operations | 1,935,798 | 16.2 | 1,916,333 | 16.9 | |||
Interest and other income, net | 73,721 | 0.6 | 93,897 | 0.8 | |||
Income before income taxes | 2,009,519 | 16.9 | 2,010,230 | 17.8 | |||
Provision for income taxes | 473,758 | 4.0 | 476,120 | 4.2 | |||
Net income | $ 1,535,761 | 12.9 % | $ 1,534,110 | 13.6 % | |||
Earnings per share: | |||||||
Basic | $ 1.15 | $ 1.12 | |||||
Diluted | $ 1.14 | $ 1.11 | |||||
Weighted-average common shares outstanding: | |||||||
Basic | 1,337,336 | 1,368,343 | |||||
Diluted | 1,342,616 | 1,376,555 | |||||
CHIPOTLE MEXICAN GRILL, INC. | |||
CONSOLIDATED BALANCE SHEETS | |||
(in thousands, except per share data) | |||
December 31, | |||
2025 | 2024 | ||
(unaudited) | |||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 350,545 | $ 748,537 | |
Accounts receivable, net | 156,466 | 143,963 | |
Inventory | 49,508 | 48,942 | |
Prepaid expenses and other current assets | 120,450 | 97,538 | |
Income tax receivable | 91,393 | 67,229 | |
Investments | 698,591 | 674,378 | |
Total current assets | 1,466,953 | 1,780,587 | |
Leasehold improvements, property and equipment, net | 2,679,361 | 2,390,126 | |
Long-term investments | 197,123 | 868,025 | |
Restricted cash | 35,364 | 29,842 | |
Operating lease assets | 4,463,010 | 4,000,127 | |
Other assets | 130,781 | 113,728 | |
Goodwill | 21,939 | 21,939 | |
Total assets | $ 8,994,531 | $ 9,204,374 | |
Liabilities and shareholders' equity | |||
Current liabilities: | |||
Accounts payable | $ 212,813 | $ 210,695 | |
Accrued payroll and benefits | 250,126 | 261,913 | |
Accrued liabilities | 182,448 | 179,747 | |
Unearned revenue | 240,375 | 238,577 | |
Current operating lease liabilities | 302,380 | 277,836 | |
Total current liabilities | 1,188,142 | 1,168,768 | |
Long-term operating lease liabilities | 4,773,434 | 4,262,782 | |
Deferred income tax liabilities | 125,674 | 46,208 | |
Other liabilities | 76,674 | 71,070 | |
Total liabilities | 6,163,924 | 5,548,828 | |
Shareholders' equity: | |||
Common stock, | 13,044 | 13,586 | |
Additional paid-in capital | 2,204,944 | 2,078,010 | |
Accumulated other comprehensive loss | (7,289) | (10,282) | |
Retained earnings | 619,908 | 1,574,232 | |
Total shareholders' equity | 2,830,607 | 3,655,546 | |
Total liabilities and shareholders' equity | $ 8,994,531 | $ 9,204,374 | |
CHIPOTLE MEXICAN GRILL, INC. | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
(in thousands) | |||
Year ended December 31, | |||
2025 | 2024 | ||
(unaudited) | |||
Operating activities | |||
Net income | $ 1,535,761 | $ 1,534,110 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 361,382 | 335,030 | |
Deferred income tax provision | 79,483 | (42,937) | |
Impairment, closure costs, and asset disposals | 26,576 | 24,582 | |
Provision for credit losses | (657) | 215 | |
Stock-based compensation expense | 119,543 | 131,730 | |
Other | (14,661) | (3,472) | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (11,383) | (29,274) | |
Inventory | (710) | (9,797) | |
Prepaid expenses and other current assets | (33,042) | 9,244 | |
Operating lease assets | 332,685 | 285,587 | |
Other assets | (5,155) | (17,690) | |
Accounts payable | (7,449) | 8,467 | |
Accrued payroll and benefits | (12,113) | 34,857 | |
Accrued liabilities | (10,499) | 27,284 | |
Unearned revenue | 40,710 | 46,139 | |
Income tax payable/receivable | (24,125) | (14,363) | |
Operating lease liabilities | (258,228) | (217,894) | |
Other long-term liabilities | (4,192) | 3,258 | |
Net cash provided by operating activities | 2,113,926 | 2,105,076 | |
Investing activities | |||
Purchases of leasehold improvements, property and equipment | (666,336) | (593,603) | |
Purchases of investments | (28,222) | (986,673) | |
Maturities of investments | 659,476 | 722,637 | |
Proceeds from sale of equipment | - | 20,113 | |
Net cash used in investing activities | (35,082) | (837,526) | |
Financing activities | |||
Repurchase of common stock | (2,425,516) | (1,001,559) | |
Tax withholding on stock-based compensation awards | (49,458) | (74,229) | |
Other financing activities | 4,076 | 2,089 | |
Net cash used in financing activities | (2,470,898) | (1,073,699) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (416) | (1,635) | |
Net change in cash, cash equivalents, and restricted cash | (392,470) | 192,216 | |
Cash, cash equivalents, and restricted cash at beginning of year | 778,379 | 586,163 | |
Cash, cash equivalents, and restricted cash at end of year | $ 385,909 | $ 778,379 | |
Supplemental disclosures of cash flow information | |||
Income taxes paid | $ 423,481 | $ 532,862 | |
Purchases of leasehold improvements, property and equipment accrued in accounts | $ 89,429 | $ 82,636 | |
Repurchase of common stock accrued in accounts payable and accrued liabilities | $ 22,958 | $ 7,279 | |
CHIPOTLE MEXICAN GRILL, INC. | |||||||||
SUPPLEMENTAL FINANCIAL AND OTHER DATA | |||||||||
(dollars in thousands) | |||||||||
(unaudited) | |||||||||
The following table details company-owned restaurant unit data for the periods indicated. | |||||||||
For the three months ended | |||||||||
Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | |||||
Opened | 132 | 84 | 61 | 57 | 119 | ||||
Permanent closures | (5) | (4) | (2) | (2) | (2) | ||||
Relocations | (1) | (3) | (1) | - | (6) | ||||
Total | 4,042 | 3,916 | 3,839 | 3,781 | 3,726 | ||||
Average restaurant sales | $ 3,104 | $ 3,132 | $ 3,142 | $ 3,186 | $ 3,213 | ||||
Comparable restaurant sales | (2.5 %) | 0.3 % | (4.0 %) | (0.4 %) | 5.4 % | ||||
The following table details partner-operated restaurant unit data for the periods indicated. | |||||||||
For the three months ended | |||||||||
Dec. 31, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | |||||
Opened | 7 | 2 | - | 2 | 1 | ||||
Total | 14 | 7 | 5 | 5 | 3 | ||||
CHIPOTLE MEXICAN GRILL, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Below are definitions of the non-GAAP financial measures in this release. The following tables provide a reconciliation of non-GAAP financial measures presented in this release to the most directly comparable financial measures calculated and presented in accordance with GAAP.
Adjusted net income is net income excluding restaurant asset impairment and gains, corporate asset impairment and gains, expenses/(reductions) related to certain legal proceedings, stock-based compensation forfeiture, stock-based compensation retention grants, and loss on investments. Adjusted general and administrative expense is general and administrative expense excluding expenses related to certain legal proceedings, stock-based compensation forfeiture and stock-based compensation retention grants. The adjusted effective income tax rate is the effective income tax rate adjusted to reflect the after tax impact of non-GAAP adjustments. Restaurant level operating margin is equal to the revenues generated by our restaurants less their direct operating costs which consist of food, beverage and packaging, labor, occupancy and other operating costs, expressed as a percent of total revenue. This performance measure primarily includes the costs that restaurant level managers can directly control and excludes other costs that are essential to conduct our business. Management uses restaurant level operating margin as a measure of restaurant performance. Management believes restaurant level operating margin is useful to investors in that it highlights trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures. We present these non-GAAP measures in order to facilitate meaningful evaluation of our operating performance across periods. These adjustments are intended to provide greater transparency of underlying performance and to allow investors to evaluate our business on the same basis as our management, which uses these non-GAAP measures in evaluating the company's performance. Our adjusted net income, adjusted diluted earnings per share, adjusted general and administrative expenses, adjusted effective income tax rate and restaurant level operating margin measures may not be comparable to other companies' adjusted measures. These adjustments are not necessarily indicative of what our actual financial performance would have been during the periods presented and should be viewed in addition to, and not as an alternative to, our results prepared in accordance with GAAP. Further details regarding these adjustments are included in the tables below.
CHIPOTLE MEXICAN GRILL, INC. | |||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||
Adjusted Net Income and Adjusted Diluted Earnings per Share | |||||||
(in thousands, except per share amounts) | |||||||
(unaudited) | |||||||
Three months ended | Year ended | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net income | $ 330,932 | $ 331,764 | $ 1,535,761 | $ 1,534,110 | |||
Non-GAAP adjustments: | |||||||
Impairment and exit costs: | |||||||
Restaurant asset impairment(1) | 2,466 | 2,634 | 2,466 | 2,634 | |||
Gain on restaurant lease termination(2) | (1,518) | - | (1,518) | - | |||
Corporate asset impairment and other | - | (7,392) | (1,484) | (7,392) | |||
Software asset impairment(4) | - | - | - | 6,249 | |||
Legal proceedings(5) | (4,387) | 4,387 | (4,387) | 21,437 | |||
Stock-based compensation forfeiture(6) | - | - | (27,863) | ||||
Stock-based compensation retention grants(7) | 2,611 | 11,945 | 34,759 | 17,079 | |||
Investment unrealized loss(8) | - | - | 6,168 | 1,381 | |||
Total non-GAAP adjustments | (828) | 11,574 | 36,004 | 13,525 | |||
Tax effect of non-GAAP adjustments above(9) | 1,235 | (3,386) | (3,358) | (8,804) | |||
After tax impact of non-GAAP adjustments | 407 | 8,188 | 32,646 | 4,721 | |||
Adjusted net income | $ 331,339 | $ 339,952 | $ 1,568,407 | $ 1,538,831 | |||
Diluted weighted-average number of common | 1,319,988 | 1,368,923 | 1,342,616 | 1,376,555 | |||
Diluted earnings per share | $ 0.25 | $ 0.24 | $ 1.14 | $ 1.11 | |||
Adjusted diluted earnings per share | $ 0.25 | $ 0.25 | $ 1.17 | $ 1.12 | |||
(1) | Operating lease asset and leasehold improvements, property, plant and equipment impairment charges and other expenses for restaurants due to closures, relocations, or underperformance. |
(2) | Lease remeasurement gain at termination of restaurant lease. |
(3) | Other gains for offices or other corporate assets. |
(4) | Property and equipment impairment charges related to a software asset. |
(5) | (Reduction)/charges for estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. |
(6) | Stock-based compensation expense reversal for equity awards forfeited by our former CEO. |
(7) | Stock-based compensation expense for retention equity awards granted to key executives in connection with the CEO transition. |
(8) | Charges for unrealized losses in long-term investments. |
(9) | Adjustments related to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. |
CHIPOTLE MEXICAN GRILL, INC. | |||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||
Adjusted General and Administrative Expenses | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Three months ended | Year ended | ||||||
2025 | 2024 | 2025 | 2024 | ||||
General and administrative expenses | $ 160,341 | $ 191,216 | $ 652,017 | $ 697,483 | |||
Non-GAAP adjustments: | |||||||
Legal proceedings(1) | 4,387 | (4,387) | 4,387 | (21,437) | |||
Stock-based compensation forfeiture(2) | - | - | - | 27,863 | |||
Stock-based compensation retention grants(3) | (2,611) | (11,945) | (34,759) | (17,079) | |||
Total non-GAAP adjustments | 1,776 | (16,332) | (30,372) | (10,653) | |||
Adjusted general and administrative expenses | $ 162,117 | $ 174,884 | $ 621,645 | $ 686,830 | |||
(1) | Reductions/(charges) for estimated settlements for distinct legal matters that exceeded or are expected to exceed typical costs for these types of legal proceedings. |
(2) | Stock-based compensation expense reversal for equity awards forfeited by our former CEO. |
(3) | Stock-based compensation expense for retention equity awards granted to key executives in connection with the CEO transition. |
CHIPOTLE MEXICAN GRILL, INC. | |||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||
Adjusted Effective Income Tax Rate | |||||||
(unaudited) | |||||||
Three months ended | Year ended | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Effective income tax rate | 23.7 % | 24.4 % | 23.6 % | 23.7 % | |||
Tax impact of non-GAAP adjustments(1) | (0.3) | 0.2 | (0.3) | 0.3 | |||
Adjusted effective income tax rate | 23.4 % | 24.6 % | 23.3 % | 24.0 % | |||
(1) | Adjustments related to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates. |
CHIPOTLE MEXICAN GRILL, INC. | |||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | |||||||
Restaurant Level Operating Margin | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
Three months ended December 31, | |||||||
2025 | Percent of | 2024 | Percent of | ||||
Income from operations | $ 420,319 | 14.1 % | $ 415,732 | 14.6 % | |||
Non-GAAP Adjustments | |||||||
General and administrative expenses | 160,341 | 5.4 | 191,216 | 6.7 | |||
Depreciation and amortization | 92,702 | 3.1 | 83,876 | 2.9 | |||
Pre-opening costs | 16,946 | 0.6 | 12,905 | 0.5 | |||
Impairment, closure costs, and asset disposals | 8,464 | 0.3 | 532 | - | |||
Total non-GAAP Adjustments | 278,453 | 9.3 | 288,529 | 10.1 | |||
Restaurant level operating margin | $ 698,772 | 23.4 % | $ 704,261 | 24.8 % | |||
Year ended December 31, | |||||||
2025 | Percent of | 2024 | Percent of | ||||
Income from operations | $ 1,935,798 | 16.2 % | $ 1,916,333 | 16.9 % | |||
Non-GAAP Adjustments | |||||||
General and administrative expenses | 652,017 | 5.5 | 697,483 | 6.2 | |||
Depreciation and amortization | 361,382 | 3.0 | 335,030 | 3.0 | |||
Pre-opening costs | 49,507 | 0.4 | 41,897 | 0.4 | |||
Impairment, closure costs, and asset disposals | 27,503 | 0.2 | 26,949 | 0.2 | |||
Total non-GAAP Adjustments | 1,090,409 | 9.1 | 1,101,359 | 9.7 | |||
Restaurant level operating margin | $ 3,026,207 | 25.4 % | $ 3,017,692 | 26.7 % | |||
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SOURCE Chipotle Mexican Grill
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