Mexican fast-food chain Chipotle (NYSE: CMG) announced better-than-expected revenue in Q1 CY2026, with sales up 7.4% year on year to $3.09 billion. Its non-GAAP profit of $0.24 per share was in line with analysts’ consensus estimates.
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Chipotle (CMG) Q1 CY2026 Highlights:
- Revenue: $3.09 billion vs analyst estimates of $3.07 billion (7.4% year-on-year growth, 0.5% beat)
- Adjusted EPS: $0.24 vs analyst estimates of $0.24 (in line)
- Reaffirmed previously-provided full-year guidance for same-store sales and net store openings
- Operating Margin: 12.9%, down from 16.7% in the same quarter last year
- Free Cash Flow Margin: 15.3%, similar to the same quarter last year
- Same-Store Sales were flat year on year, in line with the same quarter last year
- Market Capitalization: $42.25 billion
Company Overview
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE: CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $12.14 billion in revenue over the past 12 months, Chipotle is one of the most widely recognized restaurant chains and benefits from customer loyalty, a luxury many don’t have. Its scale also gives it negotiating leverage with suppliers, enabling it to source its ingredients at a lower cost.
As you can see below, Chipotle’s 13.4% annualized revenue growth over the last seven years was impressive as it opened new restaurants and increased sales at existing, established dining locations.
This quarter, Chipotle reported year-on-year revenue growth of 7.4%, and its $3.09 billion of revenue exceeded Wall Street’s estimates by 0.5%.
Looking ahead, sell-side analysts expect revenue to grow 9.7% over the next 12 months, a deceleration versus the last seven years. We still think its growth trajectory is attractive given its scale and implies the market sees success for its menu offerings.
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Restaurant Performance
Number of Restaurants
Over the last two years, Chipotle opened new restaurants at a rapid clip by averaging 8.5% annual growth, among the fastest in the restaurant sector.
When a chain opens new restaurants, it usually means it’s investing for growth because there’s healthy demand for its meals and there are markets where its concepts have few or no locations.
Note that Chipotle reports its restaurant count intermittently, so some data points are missing in the chart below.
Same-Store Sales
A company's restaurant base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales provides a deeper understanding of this issue because it measures organic growth at restaurants open for at least a year.
Chipotle’s demand rose over the last two years and slightly outpaced the industry. On average, the company’s same-store sales have grown by 2.1% per year. This performance suggests its rollout of new restaurants could be beneficial for shareholders. When a chain has demand, more locations should help it reach more customers and boost revenue growth.
In the latest quarter, Chipotle’s year on year same-store sales were flat. This was a meaningful deceleration from its historical levels. We’ll be watching closely to see if Chipotle can reaccelerate growth.
Key Takeaways from Chipotle’s Q1 Results
We enjoyed seeing Chipotle beat analysts’ same-store sales expectations this quarter. We were also glad the company reaffirmed previously-provided full-year guidance for same-store sales and net store openings, showing that the business is on track. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 5.6% to $34.82 immediately after reporting.
Sure, Chipotle had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
