Chipotle Q4 Earnings & Revenues Surpass Estimates, Stock Down

Core Insights - Chipotle Mexican Grill, Inc. (CMG) reported fourth-quarter 2025 results with earnings and revenues exceeding the Zacks Consensus Estimate, although the bottom line remained flat year-over-year [1][3][10] Financial Performance - Adjusted earnings per share (EPS) for Q4 were 25 cents, surpassing the Zacks Consensus Estimate of 24 cents, with the bottom line unchanged from the previous year [3][10] - Quarterly revenues reached $2.98 billion, exceeding the consensus mark of $2.96 billion by 0.6%, and reflecting a 4.9% increase year-over-year, driven by new restaurant openings and higher gift card breakage revenues of $27.0 million, up $19.1 million from the prior-year quarter [4][10] - Comparable restaurant sales fell by 2.5% compared to a 5.4% growth in the prior-year quarter, impacted by a 3.2% decline in transactions, partially offset by a 0.7% increase in average checks [5][10] Operational Highlights - Chipotle opened 132 company-owned restaurants in Q4, with 97 featuring a Chipotlane, which contributed to higher sales, better margins, and stronger returns at new locations [6] - Food, beverage, and packaging costs as a percentage of revenues were 30.2%, slightly improved from 30.4% in the prior-year quarter, aided by menu price increases and lower dairy costs, though offset by inflationary pressures in beef and chicken [7] - The restaurant-level operating margin decreased to 23.4% from 24.8% in the prior-year period, with adjusted net income at $331.3 million compared to $340 million in the previous year [8][10] Balance Sheet - As of December 31, 2025, cash and cash equivalents were reported at $350.5 million, down from $748.5 million a year earlier [9] - Inventory totaled $49.5 million as of December 31, 2025, compared to $48.9 million in the prior year [11] Annual Performance - Total revenues for 2025 amounted to $11.9 billion, up from $11.3 billion in 2024, while adjusted net income increased to $1.57 billion from $1.54 billion [12] Future Outlook - For 2026, management expects comparable sales to remain roughly flat and plans to open between 350 and 370 new company-operated restaurants, with over 80% featuring a Chipotlane [13]