Chipotle Mexican Grill (CMG) delivered a strong start to 2025, reporting first-quarter revenue of $2.88 billion, a 6.4% increase year over year, driven largely by new restaurant openings. However, the growth was partially offset by a 0.4% decline in comparable restaurant sales, a notable shift from the 7.0% gain seen in Q1 2024. This dip in same-store sales was primarily due to a 2.3% drop in transactions, despite a 1.9% increase in average check and a 2.9% menu price hike.

On the earnings front, net income rose to $386.6 million, up from $359.3 million a year ago, while diluted earnings per share climbed 7.7% to $0.28. Adjusted diluted EPS came in slightly higher at $0.29. Profitability improved modestly, with operating margin expanding to 16.7% from 16.3%, though at the restaurant level, margins contracted to 26.2% from 27.5%, reflecting inflationary pressures and reduced sales leverage.

Cost pressures were evident across several categories. Food, beverage, and packaging costs rose to 29.2% of revenue, driven by inflation in key ingredients like avocados, dairy, and chicken. Labor costs also increased to 25.0%, influenced by wage inflation—particularly in California—and lower volumes. Occupancy and other operating costs edged up as well, due to ongoing expansion and increased marketing spend.

Despite these headwinds, Chipotle maintained momentum in its expansion strategy, opening 59 new restaurants, including 48 Chipotlane locations, which continue to deliver stronger performance. The total number of company-owned restaurants reached 3,781 by quarter-end.

Looking ahead, the company expects low single-digit comparable sales growth for the full year and plans to open 315 to 345 new restaurants, with the majority featuring Chipotlanes. Tariffs introduced in April are projected to raise food costs by 50 basis points annually, with an estimated 20 basis point impact in Q2.

Management remains optimistic about a return to positive transaction comps in the second half of 2025, supported by ongoing investments in operations, culinary innovation, and customer engagement—including a robust loyalty program now carrying a $58.4 million liability. Chipotle also returned value to shareholders through $553.7 million in stock repurchases, with $874.7 million still available under current authorizations.

Overall, Q1 reflected Chipotle’s continued resilience and strategic focus, even as it navigates a tougher consumer and cost environment.