Chipotle’s Comparable Restaurant Sales Fall in First Quarter

Image Source: Valuentum

By Brian Nelson, CFA 

On April 23, Chipotle (CMG) reported mixed first quarter results with non-GAAP earnings per share exceeding the consensus forecast, but revenue coming up a bit short relative to expectations. Total revenue increased 6.4%, to $2.9 billion, but comparable restaurant sales fell 0.4%, a disappointment. Chipotle’s operating margin came in at 16.7% in the quarter, an increase from 16.3% in the prior year period. Restaurant level operating margins fell, but the company still grew diluted earnings per share 7.7%, to $0.28, in the quarter. Adjusted diluted earnings per share increased 7.4% year-over-year. 

Management spoke of concerning consumer spending trends in the press release: 

While our first quarter results were impacted by several headwinds including weather and a slowdown in consumer spending, our teams continue to make significant progress improving the execution in our restaurants, innovating our back of house, and building Chipotle into a global iconic brand. I (CEO Scott Boatwright) am confident that we have a strong plan to return to positive transaction comps by the second half of the year, and during these uncertain times, we will continue to invest in the things that make Chipotle a special brand – our people, culinary, value proposition, innovation and growth.

During the first quarter, Chipotle opened 57 company-owned restaurants with 48 of them including a Chipotlane. Management noted that “Chipotlanes continue to perform well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins, and returns,” but comparable restaurant sales still faced headwinds due to lower transactions, offset in part by an increase in the average check. For 2025, management anticipates full year comparable restaurant sales growth in the low single digit range and for the firm to add 315-345 new company-owned restaurants with over 80% having a Chipotlane. Though Chipotle’s first quarter results weren’t great, we continue to like its long-term story. 

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