CHIPOTLE MEXICAN GRILL INC

Previous wording

Certain statements in this report are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the number of new restaurants we expect to open and the number with Chipotlanes, our expectation to generate positive cash flow for the foreseeable future, our expectations for utilization of cash flow from operations, our ability to manage prices, risks and volatility in our supply chain, our plans for continuing stock buybacks and the period of time during which our cash and short-term investment will fund our operations. We use words such as “anticipate”, “believe”, “could”, “should”, “may”, “approximately”, “estimate”, “expect”, “intend”, “project”, “target”, "goal" and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this report are based on currently available operating, financial and competitive information available to us as of the date of this filing and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements, including but not limited to: increasing wage inflation, including as a result of state or local regulations mandating higher minimum wages, and the competitive labor market, which impacts our ability to attract and retain qualified employees and has resulted in occasional staffing shortages; the impact of any union organizing efforts and our responses to such efforts; risks of food safety incidents and food-borne illnesses; risks associated with our reliance on certain information technology systems and potential material failures, interruptions or outages; privacy and cyber security risks, including risk of breaches, unauthorized access, theft, modification, destruction or ransom of guest or employee personal or confidential information stored on our network or the network of third party providers; the impact of competition, including from sources outside the restaurant industry; the impact of federal, state or local government regulations relating to our employees, employment practices, restaurant design and construction, and the sale of food or alcoholic beverages; our ability to achieve our planned growth, such as the costs and availability of suitable new restaurant sites, construction materials and contractors and restaurant equipment; the expected costs and risks related to our international expansion, including through licensed restaurants in the Middle East and Mexico; increases in ingredient and other operating costs due to inflation, global conflicts, severe weather and climate change, our Food with Integrity philosophy, tariffs or trade restrictions; intermittent supply shortages relating to our Food with Integrity philosophy, rapid expansion and supply chain disruptions; the uncertainty of our ability to achieve expe…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain statements in this report are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including statements about the number of new restaurants we expect to open in 2025 and 2026, and the number with Chipotlanes,the number of new international partner-operated restaurants we expect to open, our anticipated comparable restaurant sales for 2025, the expected impact of tariffs on our food, beverage and packaging costs during the 2025 fourth quarter and on an ongoing basis, our expectation to generate positive cash flow for the foreseeable future, our expectations for utilization of cash flow from operations, our ability to manage prices, risks and volatility in our supply chain, our plans for continuing stock buybacks and the volume of buybacks,and the period of time during which our cash and short-term investment will fund our operations. We use words such as “anticipate”, “believe”, “could”, “should”, “may”, “approximately”, “estimate”, “expect”, “intend”, “project”, “target”, "goal" and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this report are based on currently available operating, financial and competitive information available to us as of the date of this filing and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements, including but not limited to: increasing wage inflation, including as a result of state or local regulations mandating higher minimum wages, and the competitive labor market, which impacts our ability to attract and retain qualified employees and has resulted in occasional staffing shortages; the impact of any union organizing efforts and our responses to such efforts; risks of food safety incidents and food-borne illnesses; risks associated with our reliance on certain information technology systems and potential material failures, interruptions or outages; privacy and cyber security risks, including risk of breaches, unauthorized access, theft, modification, destruction or ransom of guest or employee personal or confidential information stored on our network or the network of third party providers; the impact of competition, including from sources outside the restaurant industry; the impact of federal, state or local government regulations relating to our employees, employment practices, restaurant design and construction, and the sale of food or alcoholic beverages; our ability to achieve our planned growth, such as the costs and availability of suitable new restaurant sites, construction materials and contractors and restaurant equipment; the expected costs and risks related to our international expansion, including through partner-operated restaurants in the Middle East, Asia and Mexico; increases in ingredient and other ope…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

As of June 30, 2025, we owned 3,750 Chipotle restaurants throughout the United States and 89 international Chipotle restaurants. Additionally, we had five international licensed restaurants. We manage our U.S. operations based on 11 regions and aggregate our operations to one reportable segment.

Current wording

As of September 30, 2025, we owned 3,822 Chipotle restaurants throughout the United States and 94 international Chipotle restaurants. Additionally, we had seven international partner-operated restaurants. We manage our U.S. operations based on 11 regions and aggregate our operations to one reportable segment.

Previous wording

Second Quarter 2025 Financial Highlights, year-over-year:

Current wording

Third Quarter 2025 Financial Highlights, year-over-year:

Previous wording

•Diluted earnings per share was $0.32, a 3.0% decrease from $0.33

Current wording

•Diluted earnings per share was $0.29, a 3.6% increase from $0.28

Previous wording

Sales Trends. Comparable restaurant sales decreased 4.0% for the three months ended June 30, 2025. The decrease is attributable to lower transactions of 4.9% which is offset by a 0.9% increase in average check. While transactions have been impacted by a slowdown in consumer spending, we exited the quarter with positive comps and positive transactions. Comparable restaurant sales represent the change in period-over-period total revenue for company-owned restaurants in operation for at least 13 full calendar months. Digital sales represented 35.5% of total food and beverage revenue. For 2025, management is anticipating about flat comparable restaurant sales.

Current wording

Sales Trends. Comparable restaurant sales increased 0.3% for the three months ended September 30, 2025. The increase is attributable to a 1.1% increase in average check, partially offset by lower transactions of 0.8%. Comparable restaurant sales represent the change in period-over-period total revenue for company-owned restaurants in operation for at least 13 full calendar months. Digital sales represented 36.7% of total food and beverage revenue. For full-year 2025, management is anticipating comparable restaurant sales declines in the low-single digit range.

Previous wording

Restaurant Development. During the three months ended June 30, 2025, we opened 61 restaurants, which included 47 restaurants with a Chipotlane. We expect to open approximately 315 to 345 company-owned restaurants in 2025. We expect that at least 80% of our new company-owned restaurants will include a Chipotlane.

Current wording

Restaurant Development. During the three months ended September 30, 2025, we opened 84 restaurants, which included 64 restaurants with a Chipotlane. We remain on track to open approximately 315 to 345 company-owned restaurants in 2025 and expect to open approximately 350 to 370 restaurants in 2026, which includes 10 to 15 international partner-operated restaurants. We expect that at least 80% of our new company-owned restaurants will include a Chipotlane.

Previous wording

The following table details licensed restaurant unit data for the periods indicated.

Current wording

The following table details partner-operated restaurant unit data for the periods indicated.

Previous wording

Food, beverage and packaging costs decreased 0.5% as a percentage of total revenue for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily due to a 0.6% benefit from menu price increases in the prior year and from cost of sales efficiencies. This decrease was partially offset by inflation across several ingredient costs, primarily steak and chicken.

Current wording

Food, beverage and packaging costs decreased 0.6% as a percentage of total revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily due to a 0.6% benefit from menu price increases in the prior year and, to a lesser extent, cost of sales efficiencies. This decrease was partially offset by a 0.3% inflation, primarily in beef and chicken, and a 0.3% impact from the newly enacted tariffs.

Previous wording

Food, beverage and packaging costs decreased 0.1% as a percentage of total revenue for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The decrease was primarily due to a 0.7% benefit from menu price increases in the prior year and, to a lesser extent, from cost of sales efficiencies. This decrease was partially offset by higher usage or inflation across several ingredient costs, primarily chicken, avocados, dairy and steak.

Current wording

Food, beverage and packaging costs decreased 0.2% as a percentage of total revenue for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily due to a 0.7% benefit from menu price increases in the prior year and, to a lesser extent, from cost of sales efficiencies. This decrease was partially offset by a 0.5% inflation across several ingredient costs, primarily beef and chicken, and a 0.1% impact from the newly enacted tariffs.

Previous wording

We estimate that the tariffs enacted since April 2025 will increase food, beverage and packaging costs by about 50 basis points on an ongoing basis. Due to goods imported prior to the enactment of tariffs, we anticipate about a 40 basis point increase in food, beverage and packaging costs during the third quarter of 2025 relating to tariffs. These estimates could vary based on future tariff policy changes.

Current wording

Due to goods imported prior to the enactment of tariffs, we anticipate about a 40 basis point increase in food, beverage and packaging costs during the fourth quarter of 2025 relating to tariffs. We estimate that the tariffs enacted since April 2025 will increase food, beverage and packaging costs by about 50 basis points on an ongoing basis. These estimates could vary based on future tariff policy changes.

Previous wording

Labor costs increased 0.6% as a percentage of total revenue for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was primarily due to the impact from lower sales volumes. A 0.5% benefit from menu price increases in the prior year and efficient management of labor more than offset wage inflation.

Current wording

Labor costs increased 0.3% as a percentage of total revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Labor increased primarily due to a 0.5% impact of lower sales volumes and 0.2% from restaurant wage inflation. These increases were partially offset by a 0.5% benefit from menu price increases in the prior year.

Previous wording

Labor costs increased 0.6% as a percentage of total revenue for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024. The increase was due to the impact from lower sales volumes, as a 0.6% benefit from menu price increases in the prior year was offset by restaurant wage inflation, including minimum wage increases for our restaurants in California.

Current wording

Labor costs increased 0.5% as a percentage of total revenue for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024. The increase was primarily due to a 0.7% impact of lower sales volumes and 0.4% from restaurant wage inflation, including minimum wage increases for our restaurants in California. This increase is partially offset by a 0.6% benefit from menu price increases in the prior year.

Previous wording

Occupancy costs increased 0.3% as a percentage of total revenue for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024. The increase was due to the impact from lower sales volumes, as a 0.1% benefit from menu price increases in the prior year was offset by expenses associated with new restaurants.

Current wording

Occupancy costs increased 0.2% as a percentage of total revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was due to the impact from lower sales volumes, as a 0.1% benefit from menu price increases in the prior year was offset by expenses associated with new restaurants.

Previous wording

Other operating costs increased 1.1% as a percentage of total revenue for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase was due to the impact from several items, primarily 0.6% of higher marketing and promotional activities and 0.2% of lower sales volumes. These were partially offset by 0.2% from the benefit of menu price increases in the prior year.

Current wording

Other operating costs increased 1.2% as a percentage of total revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was due to the impact from several items, primarily 0.9% of higher marketing and promotional activities and 0.2% of lower sales volumes. This increase was partially offset by a 0.2% from the benefit of menu price increases in the prior year.

Previous wording

Other operating costs increased 0.6% as a percentage of total revenue for thesix months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was due to the impact from several items, primarily 0.4% of higher marketing and promotional activities and 0.2% of lower sales volumes. These were partially offset by 0.2% from the benefit of menu price increases in the prior year.

Current wording

Other operating costs increased 0.8% as a percentage of total revenue for thenine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was due to the impact from several items, primarily 0.6% of higher marketing and promotional activities and 0.2% of lower sales volumes. This increase was partially offset by a 0.2% from the benefit of menu price increases in the prior year.

Previous wording

The effective income tax rate decreased 0.5% for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The decrease was primarily driven by a 0.6% decrease in non-deductible expenses, partially offset by a 0.2% reduction in tax benefits related to option exercises and equity vesting.

Current wording

The effective income tax rate increased 0.2% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily driven by a 0.6% reduction in tax benefits related to option exercises and equity vesting, partially offset by 0.8% in lower non-deductible expenses. Additionally, for the three months ended September 30, 2024, we released certain income tax reserves, which did not similarly recur during the current period impacting the rate by 0.4%.

Previous wording

The effective income tax rate remained flat for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The six months ended June 30, 2025 had a 0.4% reduction in tax benefits related to option exercises and equity vesting which was offset primarily by a 0.3% decrease in non-deductible expenses.

Current wording

The effective income tax rate remained flat for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The nine months ended September 30, 2025 had a 0.6% decrease in non-deductible expenses, offset mostly by a 0.5% reduction in tax benefits related to option exercises and equity vesting.

Previous wording

As of June 30, 2025, we had a cash and marketable investments balance of$2.0 billion, non-marketable investments of$83.3 million, and$30.7 million of restricted cash. After funding the current operations in our restaurants and support centers, the first planned use of our cash flow from operations is to provide capital for the continued investment in new restaurant construction. In addition to continuing to invest in our restaurant expansion, we expect to utilize cash flow from operations to: repurchase additional shares of our common stock subject to market conditions; invest in, maintain, and refurbish our existing restaurants; and for general corporate purposes. As of June 30, 2025,$838.8 million remained available for repurchases of shares of our common stock, which includes the $400.0 million additional authorization approved by our Board of Directors on June 10, 2025. Under the remaining repurchase authorizations, shares may be purchased from time to time in open market transactions, subject to market conditions.

Current wording

As of September 30, 2025, we had a cash and marketable investments balance of$1.7 billion, non-marketable investments of$90.0 million, and$30.9 million of restricted cash. After funding the current operations in our restaurants and support centers, the first planned use of our cash flow from operations is to provide capital for the continued investment in new restaurant construction. In addition to continuing to invest in our restaurant expansion, we expect to utilize cash flow from operations to: repurchase additional shares of our common stock subject to market conditions; invest in, maintain, and refurbish our existing restaurants; and for general corporate purposes. As of September 30, 2025,$652.3 million remained available for repurchases of shares of our common stock, which includes the $500.0 million additional authorization approved by our Board of Directors on September 3, 2025. Under the remaining repurchase authorizations, shares may be purchased from time to time in open market transactions, subject to market conditions.

Previous wording

We have not required significant working capital because guests generally pay using cash or credit and debit cards and because our operations do not require significant receivables, nor do they require significant inventories due, in part, to our use of various fresh ingredients. In addition, we generally have the right to pay for the purchase of food, beverages and supplies sometime after the receipt of those items, generally within ten days, thereby reducing the need for incremental working capital to support our growth.

Current wording

We have not required significant working capital because guests generally pay using cash or credit and debit cards and because our operations do not require significant receivables or significant inventories, partly due to our use of various fresh ingredients. In addition, we generally have the right to pay for the purchase of food, beverages and supplies sometime after the receipt of those items, generally within ten days, thereby reducing the need for incremental working capital to support our growth.

Previous wording

Cash provided by operating activities was $1.12 billion for the six months ended June 30, 2025, compared to $1.13 billion for the six months ended June 30, 2024. The decrease was primarily due to net cash changes in operating assets and liabilities. This was partially offset by higher net earnings.

Current wording

Cash provided by operating activities was $1.7 billion for the nine months ended September 30, 2025, compared to $1.6 billion for the nine months ended September 30, 2024. The increase was primarily due to timing of tax-related payments, including the impacts of H.R.1 - One Big Beautiful Bill Act, partially offset by other changes in non-tax operating assets and liabilities.

Previous wording

Cash provided by investing activities was $8.1 million for the six months ended June 30, 2025, compared to cash used in investing activities of $637.3 million for the six months ended June 30, 2024. The change was primarily associated with a $677.5 million decrease in investment purchases net of investment maturities. This was partially offset by increased capital expenditures of $32.2 million primarily related to costs associated with new restaurant development.

Current wording

Cash used in investing activities was $7.3 million for the nine months ended September 30, 2025, compared to $701.5 million for the nine months ended September 30, 2024. The change was primarily associated with a $742.3 million decrease in investment purchases net of investment maturities. This was partially offset by increased capital expenditures of $48.2 million, primarily related to costs associated with new restaurant development.

Previous wording

Cash used in financing activities was $1.0 billion for the six months ended June 30, 2025, compared to $245.4 million for the six months ended June 30, 2024. The change was primarily due to increased repurchases of common stock of $824.7 million and, to a lesser extent, $39.7 million of lower payments of tax withholding related to stock-based compensation.

Current wording

Cash used in financing activities was $1.7 billion for the nine months ended September 30, 2025, compared to $735.0 million for the nine months ended September 30, 2024. The change was primarily due to increased repurchases of common stock of $1.0 billion.