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By Brian Nelson, CFA
Chipotle (CMG) recently reported first-quarter 2026 results that were mixed. The company beat expectations on the top line, but non-GAAP earnings per share came in in-line with expectations. Total revenue increased 7.4%, to $3.1 billion, thanks to new restaurant openings and, to a lesser extent, comparable restaurant sales growth of 0.5%, better than the consensus estimate calling for a decline of 0.9%.
In the quarter, Chipotle benefited from higher transactions of 0.6%, which was offset in part by a 0.1% decline in average check. Margins faced pressure in the quarter due to inflation in beef and freight, higher produce usage, and increased labor costs. Adjusted net income for the first quarter of 2026 was $316.2 million, or $0.24 per diluted share, compared to $396.8 million, or $0.29 per diluted share in the first quarter of 2025.
Management had the following to say about the results:
Our first quarter exceeded expectations as we advanced our Recipe for Growth strategy, delivering tangible progress across operations, digital, menu innovation, people, and development. We are excited to welcome a new Chief Brand Officer and a new Chief Digital Officer to further strengthen our value proposition, sharpen our brand messaging, and accelerate innovation—positioning Chipotle for sustained, long-term growth as we advance on our path to becoming a global iconic brand.
During the quarter, Chipotle opened 49 company-owned restaurants with 42 locations including a Chipotlane drive thru. The company repurchased $700.8 million of stock during the first quarter of 2026 and had $1.0 billion remaining available under share repurchase authorizations. Free cash flow in the period was $471 million, up from $412.3 million in the prior-year quarter.
For 2026, management expects full year comparable restaurant sales to be roughly flat, as it opens 350-370 new restaurants, which includes 10-15 international partner-operated restaurants. Roughly 80% of company-owned restaurants will have a Chipotlane. We recently lowered our fair value estimate of Chipotle due to lower margin expectations over our discrete forecast horizon, though we still like Chipotle’s long-term restaurant growth potential, and its positive transaction growth in the quarter was encouraging. We continue to like shares of Chipotle in the Best Ideas Newsletter portfolio.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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