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CHIPOTLE MEXICAN GRILL INC

For the period ended Jun 30, 2026. Filed Jul 31, 2026.

View on SEC.gov

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Jun 30, 2026 · Filed Jul 31, 2026

CMG$34.43-2.7%Stored close · as of Nov 6, 2026

What changed in Management’s Discussion and Analysis?

Read the current filing

Previous report: 10-Q

Period ended 2026-03-31; filed 2026-04-30.

0001058090-26-000028

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Current report: 10-Q

Period ended 2026-06-30; filed 2026-07-31.

0001058090-26-000066

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.

Compared 58 previous paragraphs and 66 current paragraphs.

38 unchanged; 17 reworded; 11 added; 3 removed; 0 previous and 0 current paragraphs rearranged.

Tables are not compared: 13 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.

A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.

Added paragraphs (11)

Current report

We believe these results reflect the success of our Recipe for Growth strategy (as discussed in our Annual Report on Form 10-K for the fiscal year ending December 31, 2025) and related initiatives against the dynamic consumer environment that has persisted in 2026. We have recently experienced low-single-digit headwinds to our comparable restaurant sales trends that we believe are tied to that environment as customers respond to, among other things, recent U.S. food safety concerns and geopolitical developments. While our outlook remains positive, our financial results could be materially adversely impacted if these disruptions or trends worsen throughout the third quarter of 2026 or beyond.

Current report

Food, beverage and packaging costs increased 0.6% as a percentage of total revenue for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by 1.1% of inflation, primarily from beef and freight, and 0.5% of higher protein and produce usage. These increases were partially offset by 0.6% of lower avocado and dairy costs and a 0.4% benefit from menu price increases.

Current report

Labor costs increased 0.3% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by 0.3% from wage inflation and performance-based bonuses and 0.2% from restaurant labor execution. These increases were partially offset by a 0.4% benefit from menu price increases.

Current report

Other operating costs increased 0.9% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by a 0.3% increase in marketing and promotional activities and inflation across several items, most notably insurance claims, maintenance, and utility costs.

Current report

Depreciation and amortization remained flat as a percentage of total revenue for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to sales leverage offsetting the increased depreciation expense associated with new restaurants.

Current report

Impairment, closure costs, and asset disposals increased in dollar terms for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, primarily due to charges associated with the replacement of restaurant assets and, to a lesser extent, increased impairment of operating lease assets and leasehold improvements in the current period.

Current report

The effective income tax rate increased 1.1% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by a 1.0% reduction in tax benefits related to option exercises and equity vesting and a 0.3% increase in other discrete income tax items, partially offset with a 0.2% increase in U.S. federal income tax credits.
Removed paragraphs (3)
Reworded paragraphs (17)

Previous wording

Certain statements in this report are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the number of new restaurants we expect to open in 2026, and the number with Chipotlanes, the number of new international partner-operated restaurants we expect to open, our anticipated comparable restaurant sales for 2026, the expected impact of tariffs on our food, beverage and packaging costs during the 2026 second quarter and on an ongoing basis, our expectation to generate positive cash flow for the foreseeable future, our expectations for utilization of cash flow from operations, our ability to manage prices, risks and volatility in our supply chain, our plans for continuing stock buybacks and the volume of buybacks, and the period of time during which our cash and short-term investment will fund our operations. We use words such as “anticipate”, “believe”, “could”, “should”, “may”, “approximately”, “estimate”, “expect”, “intend”, “project”, “target”, "goal" and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this report are based on currently available operating, financial and competitive information available to us as of the date of this filing and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements, including but not limited to: wage inflation and state or local regulations mandating higher minimum wages; the competitive labor market, which impacts our ability to attract and retain qualified employees; the impact of any union organizing efforts and our responses to such efforts; increases in ingredient and other operating costs due to inflation, global conflicts, severe weather, our Food with Integrity philosophy, tariffs or trade restrictions; intermittent supply shortages relating to our Food with Integrity philosophy, rapid expansion and supply chain disruptions; risks of food safety incidents and food-borne illnesses; our reliance on certain information technology systems and potential material failures, interruptions or outages; risks that our investments in new technology and technological innovations may not generate returns; privacy and cyber security risks, including breaches, unauthorized access, theft, modification, destruction or ransom of guest or employee personal or confidential information stored on our network or the network of third party providers; the impact of competition, including from sources outside the restaurant industry; the impact of government regulations relating to our employees, employment practices, restaurant design and construction, and the sale of food or alcoholic beverages; our ability to achieve our planned growth, such as the costs and availability of suitable new restaurant sites, construct…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain statements in this report are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the number of new restaurants we expect to open in 2026, and the number with Chipotlanes, the number of new international partner-operated restaurants we expect to open, our anticipated comparable restaurant sales for 2026, the expected impact of tariffs on our food, beverage and packaging costs during the 2026 third quarter and on an ongoing basis, our expectation to generate positive cash flow for the foreseeable future, our expectations for utilization of cash flow from operations, our ability to manage prices, risks and volatility in our supply chain, our plans for continuing stock buybacks and the volume of buybacks, and the period of time during which our cash and short-term investment will fund our operations. We use words such as “anticipate,” “believe,” “could,” “should,” “may,” “approximately,” “estimate,” “expect,” “intend,” “project,” “target,” "goal," and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this report are based on currently available operating, financial, and competitive information available to us as of the date of this filing and speak only as of the date they are made. We assume no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements, including but not limited to: wage inflation and state or local regulations mandating higher minimum wages; the competitive labor market, which impacts our ability to attract and retain qualified employees; the impact of any union organizing efforts and our responses to such efforts; increases in ingredient and other operating costs due to inflation, global conflicts, severe weather, our Food with Integrity philosophy, tariffs, or trade restrictions; intermittent supply shortages relating to our Food with Integrity philosophy, rapid expansion, limited time offerings, and supply chain disruptions; risks and impacts of food safety incidents and food-borne illnesses; our reliance on certain information technology systems and potential material failures, interruptions, or outages; risks that our investments in new technology and technological innovations may not generate returns; privacy and cybersecurity risks, including breaches, unauthorized access, theft, modification, destruction, or ransom of guest or employee personal or confidential information stored on our network or the network of third party providers; the impact of competition, including from sources outside the restaurant industry; the impact of government laws and regulations relating to our employees, employment practices,…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

As of March 31, 2026, we owned 3,983 Chipotle restaurants throughout the United States and 107 international Chipotle restaurants. Additionally, we had 14 international partner-operated restaurants. We manage our U.S. operations based on 12 regions and aggregate our operations to one reportable segment.

Current wording

As of June 30, 2026, we owned 4,074 Chipotle restaurants throughout the United States and 112 international Chipotle restaurants. Additionally, we had 15 international partner-operated restaurants. We manage our U.S. operations based on 12 regions and aggregate our operations to one reportable segment.

Previous wording

Sales Trends. Comparable restaurant sales increased 0.5% for the three months ended March 31, 2026. The increase is attributable to an increase in transactions of 0.6%, partially offset by a 0.1% decrease in average check. Comparable restaurant sales represent the change in period-over-period total revenue for company-owned restaurants in operation for at least 13 full calendar months. Digital sales represented 38.6% of total food and beverage revenue. For full-year 2026, management is anticipating comparable restaurant sales to be about flat.

Current wording

Sales Trends. Comparable restaurant sales increased 2.2% for the three months ended June 30, 2026. The increase is attributable to a 1.2% increase in average check and a 1.0% increase in transactions. Comparable restaurant sales represent the change in period-over-period total revenue for company-owned restaurants in operation for at least 13 full calendar months. Digital sales represented 38.3% of total food and beverage revenue for the three months ended June 30, 2026, an increase from 35.5% for the three months ended June 30, 2025.

Previous wording

Restaurant Development. During the three months ended March 31, 2026, we opened 49 company-owned restaurants, which included 42 restaurants with a Chipotlane. We expect to open approximately 350 to 370 restaurants in 2026, which includes 10 to 15 international partner-operated restaurants. We expect around 80% of our new company-owned restaurants will include a Chipotlane.

Current wording

Restaurant Development. During the three months ended June 30, 2026, we opened 100 company-owned restaurants, which included 80 restaurants with a Chipotlane. We also opened one international partner-operated restaurant.

Previous wording

Our results of operations as a percentage of total revenue and period-over-period change are discussed in the following section.

Current wording

Our results of operations as a percentage of total revenue and period-over-period changes are discussed in the following section.

Previous wording

Food, beverage and packaging costs increased 0.4% as a percentage of total revenue for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was driven by 0.9% of inflation, primarily from beef and freight, and 0.4% of higher produce usage. These increases were partially offset by 0.7% of lower dairy and avocado costs and, to a lesser extent, a 0.3% benefit from menu price increases.

Current wording

Food, beverage and packaging costs increased 0.8% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was driven by 1.4% of inflation, primarily from beef and freight, and 0.5% of higher protein and produce usage. These increases were partially offset by a 0.5% benefit from menu price increases and 0.5% of lower avocado and dairy costs.

Previous wording

Labor costs increased 1.1% as a percentage of total revenue for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by a 0.4% impact from costs related to certain legal proceedings, 0.3% from wage inflation, 0.3% from lower average restaurant sales volumes, and 0.2% from higher benefits expense, including performance-based bonuses. These increases were partially offset by a 0.2% benefit from menu price increases.

Current wording

Labor costs increased 0.7% as a percentage of total revenue for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by 0.4% from wage inflation and performance-based bonuses, 0.2% from costs related to certain legal proceedings, and 0.2% from lower average restaurant sales volumes. These increases were partially offset by a 0.3% benefit from menu price increases.

Previous wording

Occupancy costs increased 0.3% as a percentage of total revenue for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was due to 0.2% of expense associated with new restaurants and 0.1% of expense from existing restaurants.

Current wording

Occupancy costs increased 0.2% as a percentage of total revenue for the three andsix months ended June 30, 2026 compared to the three and six months ended June 30, 2025. The increase was primarily due to 0.2% of expense associated with new restaurants.

Previous wording

Other operating costs increased 1.2% as a percentage of total revenue for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was due to the impact from several items, primarily 0.4% increase in marketing and promotional activities, 0.2% increase in utilities, and 0.2% higher delivery expense associated with increased delivery sales. This increase was partially offset by a 0.1% benefit from menu price increases.

Current wording

Other operating costs increased 1.0% as a percentage of total revenue for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was due to the impact from several items, primarily a 0.4% increase in marketing and promotional activities and a 0.2% increase in utilities.

Previous wording

Depreciation and amortization increased 0.1% as a percentage of total revenue for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Increased depreciation expense was primarily due to new restaurant openings. This was partially offset by the benefit of menu price increases.

Current wording

Depreciation and amortization decreased 0.1% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to sales leverage, partially offset by increased depreciation expense associated with new restaurants.

Previous wording

Interest and other income, netdecreased in dollar terms for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to lower balances of interest bearing securities. The decrease in interest bearing securities is associated with increased repurchases of our common stock.

Current wording

Interest and other income, netdecreased in dollar terms for the three andsix months ended June 30, 2026 compared to the three andsix months ended June 30, 2025, primarily due to a decrease in interest income resulting from lower balances of interest bearing securities associated with increased repurchases of our common stock.

Previous wording

The effective income tax rate increased 2.5% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by a 1.7% reduction in tax benefits related to option exercises and equity vesting, a 0.4% reduction in tax credits, and a 0.4% increase in other discrete income tax items.

Current wording

The effective income tax rate decreased 0.2% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily driven by a 0.6% increase in U.S. federal income tax credits, partially offset by a 0.3% reduction in tax benefits related to option exercises and equity vesting, and a 0.1% increase in other discrete income tax items.

Previous wording

As of March 31, 2026, we had a cash and marketable investments balance of$864.4 million, non-marketable investments of$103.4 million, and$35.7 million of restricted cash. After funding the current operations in our restaurants and support centers, the first planned use of our cash flow from operations is to provide capital for the continued investment in new restaurant construction. In addition to continuing to invest in our restaurant expansion, we expect to utilize cash flow from operations to: invest in, maintain, and refurbish our existing restaurants; repurchase additional shares of our common stock subject to market conditions; and for general corporate purposes. As of March 31, 2026,$1.0 billion remained available for repurchases of shares of our common stock. Under the remaining repurchase authorizations, shares may be purchased from time to time in open market transactions, subject to market conditions.

Current wording

As of June 30, 2026, we had a cash and marketable investments balance of$667.1 million, non-marketable investments of$107.9 million, and restricted cash of$35.6 million. After funding the current operations in our restaurants and support centers, the first planned use of our cash flow from operations is to provide capital for the continued investment in new restaurant construction. In addition to continuing to invest in our restaurant expansion, we expect to utilize cash flow from operations to: invest in, maintain, and refurbish our existing restaurants; repurchase additional shares of our common stock subject to market conditions; and for general corporate purposes. As of June 30, 2026,$1.7 billion remained available for repurchases of shares of our common stock. Under the remaining repurchase authorizations, shares may be purchased from time to time in open market transactions, subject to market conditions.

Previous wording

Cash provided by operating activities was $651.4 million for the three months ended March 31, 2026, compared to $557.1 million for the three months ended March 31, 2025. The increase was primarily due to timing of tax-related payments, including the receipt of a $64.9 million federal tax refund related to the 2018 tax year. This activity was partially offset by other changes in non-tax operating assets and liabilities.

Current wording

Cash provided by operating activities was $1.3 billion for the six months ended June 30, 2026, compared to $1.1 billion for the six months ended June 30, 2025. The increase was primarily due to timing of tax-related payments, and to a lesser extent other changes in non-tax operating assets and liabilities.

Previous wording

Cash used in investing activities was $8.1 million for the three months ended March 31, 2026, compared to cash provided by investing activities of $6.1 million for the three months ended March 31, 2025. The change was primarily due to increased capital expenditures of $35.5 million, mainly related to costs associated with new restaurant development and the purchase of new equipment for existing restaurants. This was partially offset by a $17.6 million increase in maturities of investments.

Current wording

Cash used in investing activities was $53.4 million for the six months ended June 30, 2026, compared to cash provided by investing activities of $8.1 million for the six months ended June 30, 2025. The change was primarily due to increased capital expenditures of $92.2 million, mainly related to costs associated with new restaurant development and the purchase of new equipment for existing restaurants. We expect continued elevated costs associated with purchases of new equipment for existing restaurants through 2027. This was partially offset by a $29.8 million increase in maturities of investments.

Previous wording

Cash used in financing activities was $747.5 million for the three months ended March 31, 2026, compared to $585.2 million for the three months ended March 31, 2025. The change was primarily due to increased repurchases of common stock of $147.2 million.

Current wording

Cash used in financing activities was $1.4 billion for the six months ended June 30, 2026, compared to $1.0 billion for the six months ended June 30, 2025. The change was primarily due to increased repurchases of common stock of $357.9 million.