Chipotle (CMG) Q4 FY25 earnings call: guidance and Q&A

What are the underlying assumptions for transactions, menu price, and mix in the 'about flat' comp guidance for 2026, and what cadence is expected given positive January trends?

The full-year guidance is conservative due to early year and unpredictable consumer trends, with only a modest impact from initiatives embedded. Comps are expected to improve throughout the year as initiatives drive transactions and compares become easier.

“our full year guide only includes, I would say, really a modest impact from the initiatives that we have this year. And then when you're thinking about how this works out throughout the rest of the year, we expect comps to improve throughout the year as our initiatives drive transactions and as our lap -- or sorry, as our compares get a little bit easier throughout the year.”

asked by Brian Mullan · answered by Adam Rymer

Can you quantify the comp sales lift from the high-efficiency equipment package in the 350 restaurants, and are there plans to accelerate the rollout beyond 2,000 by year-end?

Restaurants with the high-efficiency package are seeing hundreds of basis points improvement in comp sales, along with better guest engagement and food quality scores. The rollout is already accelerated, targeting 2,000 restaurants by year-end, with completion likely by 2027.

“we're seeing hundreds of basis points of improvement in comp sales in those restaurants alone. That gives us confidence that we are approaching the strategy the right way, and it's having a meaningful impact for our team members and for our guests.”

asked by Brian Mullan · answered by Scott Boatwright

How is the LTO strategy evolving, particularly with the return of Chicken al Pastor, and how will marketing differ to maximize impact, especially given past LTO performance?

LTO consumers have a higher lifetime value, visiting more often and spending more. The company will lean into this with increased marketing spend for four LTOs in 2026. Marketing messages will evolve to celebrate Chipotle's unique differentiators, as seen with the recent high-protein launch.

“the LTO consumer -- the consumer that chooses an LTO at Chipotle has a higher lifetime value, visits the brand more often and spends more. And so we're going to lean into that moment with our core consumer.”

asked by Sara Senatore · answered by Scott Boatwright

Can you provide more context on January comp trends, specifically pre-winter storm, and what's embedded in the Q1 outlook?

January saw significant momentum following the protein menu launch until the winter storm hit. The Q1 underlying comp trend is estimated to be in the -1% to -2% range, which includes approximately 100 basis points of negative impact from the winter storm closures for the quarter.

“for Q1, this gets us to an underlying trend somewhere in that minus 1% to minus 2% range, and that's what's embedded in our expense line guidance in our prepared comments. But you have to keep in mind that, that comp range includes about 100 basis points impact from the restaurant closures from the large winter storm that Scott just mentioned.”

asked by Lauren Silberman · answered by Adam Rymer

What is the full-year restaurant margin outlook given the flat comp guidance, and how will pricing versus inflation impact this?

Margins in 2026 will be under pressure due to the investment in taking less price (1-2%) compared to inflation (3-4%), creating a ~150 basis point year-over-year decline from this dislocation. The gap will be widest in Q1 (70bps pricing vs. 4% inflation). The long-term algorithm of $4M AUVs and 30% margins remains confident.

“on a full year basis, I would anticipate pricing to be in that 1% to 2% range, while inflation will be closer to that 3% to 4% range. So just that dislocation alone will be about 150 basis points on a year-over-year decline.”

asked by David Tarantino · answered by Adam Rymer

What have been the learnings from recent pricing actions regarding elasticity, and how effective are the new price-pointed items and messaging in boosting value perception and shortening the reinvestment cycle?

The disciplined pricing approach (1-2% for FY) is performing as anticipated. The high-protein menu launch indicated that the core consumer is not primarily seeking smaller, lower-priced items, but rather quality and on-brand products. 60% of core users have over $100,000 in household income, giving confidence in targeting this group with value and innovation.

“What we've learned is the guest skews younger, a little more higher income is typically a digital native and that their grounded purpose aligns with our North Star as a brand around clean food, clean ingredients, high protein, and we are the way they want to eat.”

asked by David Palmer · answered by Scott Boatwright

Will the core Chipotle consumer benefit from macroeconomic factors in 2026, and is the current North America company development rate sustainable or can it be ramped up further?

The company believes macroeconomic factors will be a tailwind for consumer spending, especially for its core high-income users. The current development rate of 334 restaurants in 2025, increasing to 350 in 2026, is considered the right growth rate for the brand, with confidence in reaching 7,000 restaurants in North America without cannibalization or reduced ROI.

“We built 334 restaurants in 2025, and we did it successfully. ... This year, we'll build 350. ... And we think that's the right growth rate for our brand and gives us a lot of confidence that we'll continue to build them and have returns in the 60% range.”

asked by John Ivankoe · answered by Scott Boatwright

Has the younger/lower-income consumer returned as comps accelerated, and did the high-protein launch attract new customers or primarily drive frequency/upsell?

Gamification, like the Freepotle campaign, successfully re-engaged younger consumers. The high-protein launch both attracted new customers who were unaware of Chipotle's protein quality and drove frequency/upsell, evidenced by a 35% increase in extra protein incidence.

“I'll tell you, that worked tremendously getting those consumers back in our restaurants, and it will be used to inform the 2026 strategy as we engage that cohort more meaningfully.”

asked by Sharon Zackfia · answered by Scott Boatwright