Chipotle posted surprise sales growth as customer traffic returned, despite falling profits

Same-store sales rose 0.5% in the first quarter, reversing recent declines, though net income fell 22% year over year

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Chipotle $CMG Mexican Grill reported first-quarter comparable restaurant sales growth of 0.5%, reversing a string of recent declines, as customer traffic returned to its restaurants. Analysts had penciled in a 0.7% decline, per CNBC.

Total revenue rose 7.4% to $3.09 billion, driven by new restaurant openings and, to a lesser extent, the comparable sales gain. Transaction volume increased 0.6%, while average check slipped 0.1%.

Compared with $386.6 million, or 28 cents per diluted share, in the year-ago quarter, net income came in at $302.8 million, or 23 cents per diluted share. On an adjusted basis, stripping out restructuring charges, legal costs, and certain other items, per-share earnings came to 24 cents. The operating margin contracted to 12.9% from 16.7% a year earlier.

Higher costs across the business weighed on profitability. Food, beverage, and packaging costs rose to 29.6% of revenue from 29.2%, driven by inflation in beef and freight. Labor costs increased to 26.1% of revenue from 25.0%, reflecting wage inflation and higher benefits expense. General and administrative expenses also climbed, in part because of the company's biennial All Managers Conference held during the quarter.

"Our first quarter exceeded expectations as we advanced our Recipe for Growth strategy," CEO Scott Boatwright said in a statement.

Chipotle opened 49 company-owned restaurants during the quarter, with 42 of those including a Chipotlane drive-through format. The company said digital sales represented 38.6% of total food and beverage revenue.

Menu innovation has been central to Chipotle's effort to win back guests, especially younger diners who pulled back on visits last year, with the chain pairing new additions to its lineup with the return of popular limited-time items, according to CNBC. The company also recently named Fernando Machado as its new chief brand officer.

For the full year, Chipotle reiterated its outlook for approximately flat comparable restaurant sales. According to CNBC, Rymer acknowledged the guidance was deliberately cautious given how difficult it has become to predict where consumers are headed. Executives pointed to a slowdown in sales during March and warned that ongoing regional conflict could crimp the pace of new openings tied to its international expansion partnership with Alshaya Group.

Chipotle also repurchased $700.8 million of its own stock during the quarter at an average price of $36.14 per share. As of March 31, 2026, $1.0 billion remained available under its board-authorized repurchase program.

Chipotle stock rose about 3% in after-hours trading following the results.

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