Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

CMG · Q1 2026 Earnings

Chipotle Mexican Grill

Reported April 29, 2026

30-second summary

Comps printed +0.5% with transactions +0.6%, adjusted restaurant-level margin landed at 23.7% (down 250bps YoY from 26.2%), and management framed April as a "nice step up" with Q2 FY2026 comps guided to ~+1%. Underneath the reaffirmed "about flat" FY comp anchor, two FY cost lines were quietly lowered — cost-of-sales inflation cut to ~4% from "mid-single-digit," and marketing tightened to below 3% — and an FY pricing band of 1–2% was initiated, which together meaningfully reduce the FY2026 margin headwind the Street has been underwriting since the Q3 FY2025 pricing-give-back disclosure.

Headline numbers

EPS

Q1 FY2026

$0.24

Revenue

Q1 FY2026

$3.09B

+7.4% YoY

Operating margin

Q1 FY2026

12.9%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$3.09B	+7.4%	$3.00B	+2.9%
EPS	$0.24	—	$0.25	-4.0%
Operating margin	12.9%	—	14.1%	-120bps

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Comparable restaurant sales	Q1 FY2026	mid-single-digit range inflation expected to be offset by ~70 basis points pricing	0.5%	in-line with conservative Q1 guidance	Met
Cost of sales	Q1 FY2026	mid-30% range	29.6%	better-than-guided (60 bps below high end of range)	Met
Labor costs	Q1 FY2026	high 25% range	25.7%	in-line with guided range	Met

New guidance

Metric	Period	Guide	YoY
Comparable restaurant sales	Q2 FY2026	approximately +1% range	+100 bps vs prior-year Q

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Cost-of-sales inflation	FY 2026	mid-single-digit range (higher in H1, low to mid-single-digit in H2); tariff impact ~15 bps	around 4% for full year	-50 to -150 bps vs prior 'mid-single-digit' (5-6%); tariffs now embedded	Lowered
Pricing	FY 2026	~70 basis points in Q1; implied full-year to narrow as inflation moderates	1 to 2% for full year	-70 to -100 bps vs Q1 actual run-rate, lower embedded assumption for H2	Lowered
Marketing costs	FY 2026	low 3% range	below 3% of sales	-25 to -50 bps (below 3% vs low 3% range of ~2.8-3.0%)	Lowered

Reaffirmed unchanged this quarter: Comparable restaurant sales (about flat), New restaurant openings (350 to 370 company-owned, 10 to 15 international partner-operated), Chipotlane penetration (Around 80% of company-owned restaurants will have a Chipotlane), Effective tax rate (24% to 26% before discrete items), Depreciation & amortization (around 3% of sales)

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Food and beverage revenue	$3.073B	+7.4%

Platform metrics

Q1 FY2026

Segment	Q1 FY2026
Comparable restaurant sales growth	0.5%
Digital sales as % of food and beverage revenue	38.6%
Comparable restaurant transactions growth	0.6%
Average check change	-0.1%
Company-owned restaurants opened	49 (42 with Chipotlane)

Profitability

Q1 FY2026

Segment	Q1 FY2026
Restaurant-level operating margin (adjusted)	23.7%
Food, beverage and packaging costs as % of revenue	29.6%
Labor costs as % of revenue (adjusted)	25.7%

Management tone

Narrative arc: Q2 FY2025 "we're not getting credit with the consumer" → Q3 FY2025 "transactions softened even further, margins will be sacrificed" → Q4 FY2025 "recipe for growth, back-half-loaded recovery" → Q1 FY2026 "April stepped up, momentum is here."

Three quarters ago Boatwright was conceding store-level execution gaps and a brand that had lost narrative control; two quarters ago he packaged the response as the "recipe for growth" framework but framed visible benefits as back-half-FY2026; this quarter the framework is delivering against the early part of that timeline ahead of schedule. The "back-half recovery" thesis has effectively been pulled forward into Q2 FY2026 — the +1% Q2 FY2026 comp guide on a -4.0% prior-year base means the two-year stack is already in mid-single-digit positive territory, the exit-velocity Reimer was reaching for last summer.

Menu innovation has migrated from tactical promotion to declared strategic pillar across three quarters. Q3 FY2025 it was "testing" LTO ideas to "betray the summer lull"; Q4 FY2025 it became "four LTOs per year" cadence-doubling; this quarter the framing is structural: "Menu innovation is not simply a short-term sales driver, but a meaningful contributor to building our averaging pillar of our recipe for growth strategy." The cadence is producing replicable wins, not lottery tickets.

Loyalty has crossed from "engagement tool" to "primary growth lever with widening gap." This quarter's prepared-remarks disclosure: "Loyalty-driven comms have now outpaced non-loyalty comms for several consecutive quarters, and the gap is widening." The pricing-power posture has also inverted from Q3 FY2025's defensive concession ("we don't plan to fully offset this incremental inflation in the near term…this will pressure margins") to a structural value-gap framing this quarter — pricing below the industry for a second consecutive year is now described as offensively building separation from peers rather than as margin sacrifice. The combination of the lowered FY cost-of-sales inflation guide and the newly initiated 1–2% FY pricing band sets up a spread that looks meaningfully narrower than what was on the table at Q4 FY2025.

Europe has moved from "aspirational long-term market" to inflection in the prepared remarks: the Westfield Stratford opening delivered "our strongest opening day sales in the region's history," with positive comps across all European countries cited and at least one additional opening planned in Frankfurt this year. International accelerating is the first credible new growth vector this brand has had since the unit-development story matured.

Recurring themes management leaned on this quarter:

High-efficiency equipment package driving 200-400 bps comp liftMenu innovation cadence and LTO strategy with sustained post-promotion liftLoyalty program relaunch (25% new member uplift) as primary growth multiplierHospitality/operational excellence as consumer value perception leverPricing power maintenance via value positioning (1-2% full-year pricing with margin flexibility)International expansion acceleration (Europe inflection, Middle East long-term, Asia-Pacific timing shifts)

Risks management surfaced:

Dynamic consumer environment and discretionary spending volatilityGeopolitical conditions delaying Middle East partner-operated openingsCost inflation mid-single-digit Q2 (avocados, dairy, beef) moderating to low-mid-single-digit H2Mix headwinds from lower group size and rewards redemption cannibalizationIran conflict and elevated gas prices cited as Q2 caution drivers

Answers to last quarter's watch list

Q1 FY2026 comp print vs the implicit -1 to -2% setup. Comps printed +0.5% with transactions +0.6% — meaningfully better than the -1 to -2% Q4 FY2025 commentary set up, and good enough that management is now guiding Q2 FY2026 to ~+1%. The back-half recovery narrative didn't just hold; it pulled forward into H1. Status: Resolved positively

Restaurant-level margin in Q1 FY2026. Q1 FY2026 adjusted RLM came in at 23.7%, down 250bps YoY from 26.2%. Cost of sales at 29.6% and labor at 25.7% landed at the favorable end of the high-25% guide. Status: Resolved positively on guide; YoY compression remains

Transaction trajectory by month within Q1 FY2026. Management disclosed that April produced "a nice step up" with cilantro lime sauce and the rewards relaunch as the named drivers, and Q2 FY2026 is now guided to +1% — implying the exit rate from Q1 FY2026 into April accelerated rather than decelerated. Status: Resolved positively

First LTO of FY2026 — launch and attach rate. Management called out cilantro lime sauce outperforming the prior best-seller red chimichurri, and disclosed that LTOs are driving "a few hundred basis points of transaction width" with sustained lift post-promotion — the structural-vs-tactical reframe that was needed. The Chicken al Pastor relaunch attach rate itself was not separately quantified. Status: Resolved positively

Chipotlane mix on FY2026 openings. Q1 FY2026 openings were 42 of 49 Chipotlanes (85.7%) — above the "around 80%" target. Status: Resolved positively

Rewards relaunch metrics. Management disclosed a 25% uplift in new members post-relaunch and characterized the loyalty-vs-non-loyalty comp gap as "widening" for several consecutive quarters. The relaunch is producing measurable lift on the timeline promised. Status: Resolved positively

What to watch into next quarter

Whether Q2 FY2026 lands at or above the +1% comp guide. Q2 FY2025 printed -4.0%, so the +1% guide is on a deeply favorable base — the two-year stack at +1% would be -3.0%, still soft on a multi-year basis. Watch whether the one-year exceeds +1.5% (the level that would signal underlying acceleration rather than just compare math).

FY2026 cost-of-sales inflation tracking to the new ~4% guide. The cut from mid-single-digit to ~4% is the most consequential margin-line change in the print. A Q2 FY2026 cost of sales materially above the ~30% guide — particularly on avocado/dairy/beef, the three lines management called out as Q2 FY2026 pressure points — would put the FY 4% number at risk and reopen the margin headwind story.

Whether the +1% Q2 FY2026 comp comes from transactions or check. Q1 FY2026 was almost entirely transaction-driven (+0.6% transactions vs -0.1% check), which is the highest-quality print this brand has produced in 18 months. A Q2 FY2026 result skewed back toward check (i.e., pricing carrying the comp) would suggest the traffic momentum is thinner than the headline implies.

Loyalty disclosure cadence. The 25% new-member uplift was disclosed for the first time this quarter. Watch whether Q2 FY2026 produces a comparable quantified metric (active member growth, in-restaurant penetration, or the loyalty-vs-non-loyalty comp gap in basis points) — the disclosure trajectory itself is a tell on whether the program is anchoring the back-half recovery as planned.

Westfield Stratford and Europe unit pipeline. Boatwright flagged 40% year-two ROI and a need to "begin to look for real estate in a more meaningful way in central London and in Germany." Watch for a specific FY2027 European unit count or named market additions on the Q2 FY2026 call — vague optionality vs a concrete number is the difference between Europe being a real third growth leg and an aspiration.

Marketing spend running at or below the new "below 3%" FY guide. The marketing line was trimmed this quarter against a backdrop of accelerated LTO cadence and a loyalty relaunch. If Q2 FY2026 or Q3 FY2026 requires a marketing step-up to hold the comp guide, the FY trim will reverse and the margin friendliness in this print will erode.

Sources

CMG Q1 FY2026 press release (8-K Exhibit 99.1), filed 2026-04-29 — https://www.sec.gov/Archives/edgar/data/1058090/000105809026000027/cmg-20260429xex991.htm
CMG Q1 FY2026 earnings conference call — prepared remarks by Scott Boatwright (CEO) and Adam Reimer (CFO); Q&A exchanges with Gargiulo (Bernstein), Silberman (Deutsche Bank), Palmer (Evercore ISI), Senatore (BofA), Francfort (Guggenheim), and Ivankoe (JPMorgan).

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