Chipotle reported first quarter results that exceeded expectations, driven by a return to positive transactions and advancements in their 'Recipe for Growth' strategy. However, the quarter saw a notable decrease in both revenue growth and earnings per share compared to the prior year, alongside a significant compression in operating margins.
Total revenue increased 7.4% to $3.1 billion, driven by new restaurant openings and a 0.5% increase in comparable restaurant sales.
positivePositive transactions growth of 0.6% indicates a return to customer traffic growth.
positiveOpened 49 new company-owned restaurants, with 42 including a Chipotlane, supporting development and convenience.
positiveRepurchased $700.8 million of stock, demonstrating commitment to returning capital to shareholders.
positiveOperating margin decreased to 12.9% from 16.7% in the prior year, a significant compression of 380 basis points.
negativeAdjusted restaurant level operating margin decreased to 23.7% from 26.2% YoY.
negativeDiluted earnings per share decreased 17.9% to $0.23 from $0.28 in the prior year.
negativeAdjusted diluted earnings per share decreased 17.2% to $0.24 from $0.29 in the prior year.
negativeFood, beverage, and packaging costs increased to 29.6% of revenue from 29.2% YoY, driven by inflation in beef and freight.
attentionLabor costs increased to 26.1% of revenue from 25.0% YoY, driven by wage inflation and lower average sales volumes.
attentionGeneral and administrative expenses increased to $203.7 million from $172.8 million YoY, driven by the All Managers Conference and performance bonuses.
attentionFull year comparable restaurant sales are anticipated to be about flat, indicating a slowdown from previous growth.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
Our first quarter exceeded expectations as we advanced our Recipe for Growth strategy, delivering tangible progress across operations, digital, menu innovation, people, and development.
We are excited to welcome a new Chief Brand Officer and a new Chief Digital Officer to further strengthen our value proposition, sharpen our brand messaging, and accelerate innovation—positioning Chipotle for sustained, long-term growth as we advance on our path to becoming a global iconic brand.
Chipotlanes continue to perform well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins and returns.
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Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.