Chipotle Beats Earnings Estimates Amidst Lingering Traffic Declines and Cautious 2026 Outlook
Chipotle Mexican Grill reported fourth-quarter earnings and revenue that surpassed analysts' expectations, despite a fourth consecutive quarter of decreased traffic to its restaurants. The company projects flat same-store sales growth for 2026, signaling ongoing challenges.
Traffic to its restaurants decreased for the fourth consecutive quarter.
Chipotle concluded 2025 with a full-year same-store sales decline of 1.7%, marking its first annual decrease since 2016. Executives described the 2026 outlook as "conservative," attributing it to unpredictable consumer trends. In 2025, the company adjusted its full-year same-store sales forecast three times due to shifting dining behaviors.
Following the report, shares of the company declined by as much as 11% in extended trading.
Fourth Quarter Financial Highlights
Based on an LSEG analyst survey, Chipotle reported the following compared to Wall Street expectations:
- Earnings per share: $0.25 adjusted versus $0.24 expected
- Revenue: $2.98 billion versus $2.96 billion expected
The fast-casual chain's fourth-quarter net income was $330.9 million, or $0.25 per share, a slight decrease from $331.8 million, or $0.24 per share, in the prior year. Excluding specific costs, earnings were $0.25 per share. Net sales increased by 4.9% to reach $2.98 billion.
Same-store sales for the quarter fell by 2.5%, marking the third quarter of 2025 with a decline. This was less steep than the 3% decrease anticipated by Wall Street, according to StreetAccount estimates. Traffic to Chipotle restaurants saw a 3.2% reduction.
Company executives have noted a reduction in consumer spending across all income groups, with a more pronounced shift among low-income diners.
Company Strategy and Outlook
Over the past year, Chipotle's shares have decreased by approximately one-third, lowering the company's market value to about $51 billion as of Tuesday's close. Investor interest has waned as the chain reported consistent drops in restaurant traffic.
To attract customers, Chipotle is prioritizing operational improvements and the introduction of new menu items over offering discounts. In December, the company launched "protein cups" to target customers seeking snack options beyond full meals. CEO Scott Boatwright stated that items like a $3.50 taco and a $3.80 protein cup offer an "approachable price point" for consumers, including those with dietary preferences like GLP-1 users or those seeking high-protein, high-fiber options.
Chipotle aims to increase menu prices at a slower rate than inflation to appeal to price-conscious consumers, while also focusing on its base of high-income customers.
Chipotle aims to increase menu prices at a slower rate than inflation to appeal to price-conscious consumers, while also focusing on its base of high-income customers. Boatwright noted that 60% of their core users have an average household income over $100,000 annually.
During the quarter, Chipotle opened 132 company-owned locations and seven restaurants managed by international licensees. This brought the total for the year to 334 company-owned locations and 11 international partner restaurants. For 2026, the company plans to open 350 to 370 new restaurants, including 10 to 15 international locations operated by licensees.