VALUATION HIGHLIGHTS

1. Company Operated Restaurants constitute 98% of the Trefis price estimate for Chipotle's stock.

WHAT HAS CHANGED?

Chipotle Q4 2025 Snapshot

Chipotle's Q4 revenue of about $3.0 billion rose roughly 5% year over year and was modestly ahead of expectations, while adjusted EPS of $0.25 also topped consensus. The headline growth was driven primarily by unit expansion and pricing, as comparable restaurant sales declined around 2.5%, reflecting continued pressure on traffic. Restaurant-level margins compressed to roughly 23.4% from the prior year due to higher labor and food costs, and operating margin also moved lower, signaling limited near-term leverage.

Looking Ahead

For fiscal year 2026, management signaled a cautious but structured outlook. Comparable restaurant sales are expected to be about flat for the year, a notable deceleration versus historical trends and below consensus expectations, reflecting ongoing consumer headwinds and weaker traffic patterns seen in late 2025. Management also highlighted that margin pressure is likely to persist as it balances modest menu price increases (around 1-2%) against inflationary input and labor costs.

Chipotle plans to open between 350 and 370 new company-operated restaurants in 2026, including 10 to 15 international partner-operated locations, with around 80 percent of new units featuring Chipotlane drive-thru lanes aimed at bolstering convenience and digital orders.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Chipotle's value that present opportunities for upside or downside to the current Trefis price estimate for Chipotle:

Company Operated Restaurants

Number of Restaurants : The company is still able to add new restaurants, and increase its in-restaurant sales - illustrating that the additions are not cannibalizing existing locations. The restaurant count increased from 3,437 in 2023 to 4,042 in 2025. We continue to expect an average of 5% growth in stores each year over our forecast period.

Average Revenue Per Restaurant : We expect the company's revenues to grow at a steady pace over our forecast period, with average restaurant sales growing at around 6% over our forecast period.

For additional details, select a driver above or select a division from the interactive Trefis split for Chipotle at the top of the page.

BUSINESS SUMMARY

Chipotle Mexican Grill is a chain of restaurants operating in the casual dining segment, which specializes in serving Mexican cuisine. As of Dec 31, 2025, the company operated 3,938 throughout the United States and 104 international Chipotle restaurants. Additionally, it had 14 international partner-operated restaurants.

Chipotle's menu comprises Mexican fare with a few things that can be mixed and matched with various sauces and ingredients such as salsa, guacamole, cheese, and lettuce, to make one's dishes. The menu primarily consists of Tacos, Burritos, Salads, and Burrito Bowls (Burritos without the Tortilla).

Chipotle operates on the "Food with Integrity" principle, offering naturally raised pork, chicken, and beef. Naturally raised implies that the animals are raised in open pastures and are fed on a purely vegetarian diet without any added hormones or antibiotics.

Chipotle's objective is to provide a fine dining experience in a quick-service setup and to provide quality food and ambiance without having the customer wait too long. Some Chipotle restaurants can serve up to 300 customers an hour.

Chipotle competes with restaurants in the casual dining segment such as Applebee's, Qdoba, Taco Bell, and Chili's, among others. It also competes with fast-food restaurants such as McDonald's, Burger King, Subway, and KFC.

SOURCES OF VALUE

Chipotle's business is wholly dependent on company-operated restaurants, which explains the significance of this division to its stock.

Higher average spend per customer than competitors

Chipotle enjoys a higher average spend per customer than most of its competitors, given its high quality of food. For example, in McDonald's, the average spend per customer is around $8-9, whereas the corresponding figure in Chipotle is about $11-12. The company has successfully marketed itself as a restaurant serving natural, hygienic, and organic food in an upscale ambiance, for which the consumers are often ready to pay a slight premium.

Another reason why the company enjoys a higher average spend per customer is that it has restaurants only in developed countries, where the average spend is usually higher than in developing countries. Most of the fast-food restaurant chains have a mix of restaurants in developed and developing countries, which has a lower effect on the overall spending per customer.

KEY TRENDS

Organic and healthier food gaining importance in the U.S.

Consumers have become more health-conscious, and there is an increase in demand for natural and healthier food. Using its 'Food with Integrity campaign, Chipotle has aggressively marketed itself as a restaurant using only naturally raised meat.

International Expansion Story

Chipotle's international growth story is still in its early stages, with less than 50 locations established across the U.K., France, and Germany, and a recent entry into Kuwait. The global success of companies like McDonald's, which operates over 40,000 restaurants worldwide, underscores the significant potential for Chipotle's international expansion.

Chipotle Feels the Pinch as Younger, Mid-Income Diners Cut Back

In late 2025 and into 2026, Chipotle’s leadership has repeatedly pointed to weaker consumer demand among key demographic segments as a notable challenge shaping the company’s outlook. Management and analysts identified that diners aged roughly 25 to 35 and households earning below about $100,000 a year — a group that historically contributed a meaningful portion of visits — have noticeably cut back on eating out amid broader economic pressures including inflation, wage stagnation, student loan repayments and employment concerns. These headwinds have contributed to softer traffic and more cautious spending behavior, particularly among younger and middle-income customers who are sensitive to price and overall cost of living.