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 in 2026, and the number with Chipotlanes, the number of new international partner-operated restaurants we expect to open, our anticipated comparable restaurant sales for 2026, the expected impact of tariffs on our food, beverage and packaging costs during the 2026 third 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 speak only as of the date they are made. We assume no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. 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: wage inflation and state or local regulations mandating higher minimum wages; the competitive labor market, which impacts our ability to attract and retain qualified employees; the impact of any union organizing efforts and our responses to such efforts; increases in ingredient and other operating costs due to inflation, global conflicts, severe weather, our Food with Integrity philosophy, tariffs, or trade restrictions; intermittent supply shortages relating to our Food with Integrity philosophy, rapid expansion, limited time offerings, and supply chain disruptions; risks and impacts of food safety incidents and food-borne illnesses; our reliance on certain information technology systems and potential material failures, interruptions, or outages; risks that our investments in new technology and technological innovations may not generate returns; privacy and cybersecurity risks, including 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 government laws and regulations relating to our employees, employment practices,…

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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 our expectation for elevated new equipment costs through 2027, 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 share repurchases, and the period of time during which our cash and short-term investments 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 speak only as of the date they are made. We assume no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law. 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: wage inflation and state or local regulations mandating higher minimum wages; the competitive labor market, which impacts our ability to attract and retain qualified employees; the impact of any union organizing efforts and our responses to such efforts; increases in ingredient and other operating costs due to inflation, global conflicts, severe weather, our Food with Integrity philosophy, tariffs, or trade restrictions; intermittent supply shortages relating to our Food with Integrity philosophy, rapid expansion, limited time offerings, and supply chain disruptions; risks and impacts of food safety incidents and food-borne illnesses; our reliance on certain information technology systems and potential material failures, interruptions, or outages; risks that our investments in new technology and technological innovations may not generate returns; privacy and cybersecurity risks, including 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 government laws and 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 internat…

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Previous wording

As of June 30, 2026, we owned 4,074 Chipotle restaurants throughout the United States and 112 international Chipotle restaurants. Additionally, we had 15 international partner-operated restaurants. We manage our U.S. operations based on 12 regions and aggregate our operations to one reportable segment.

Current wording

As of September 30, 2026, we owned 4,146 Chipotle restaurants throughout the United States and 121 international Chipotle restaurants. Additionally, we had 20 international partner-operated restaurants. We manage our U.S. operations based on 12 regions and aggregate our operations to one reportable segment.

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Second Quarter 2026 Financial Highlights, year-over-year:

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Third Quarter 2026 Financial Highlights, year-over-year:

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•Total revenue increased 9.3% to $3.3 billion

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•Total revenue increased 9.6% to $3.3 billion

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Sales Trends. Comparable restaurant sales increased 2.2% for the three months ended June 30, 2026. The increase is attributable to a 1.2% increase in average check and a 1.0% increase in 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 38.3% of total food and beverage revenue for the three months ended June 30, 2026, an increase from 35.5% for the three months ended June 30, 2025.

Current wording

Sales Trends. Comparable restaurant sales increased 2.1% for the three months ended September 30, 2026. The increase is attributable to a 1.3% increase in average check and a 0.8% increase in 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 38.8% of total food and beverage revenue for the three months ended September 30, 2026, an increase from 36.7% for the three months ended September 30, 2025.

Previous wording

We believe these results reflect the success of our Recipe for Growth strategy (as discussed in our Annual Report on Form 10-K for the fiscal year ending December 31, 2025) and related initiatives against the dynamic consumer environment that has persisted in 2026. We have recently experienced low-single-digit headwinds to our comparable restaurant sales trends that we believe are tied to that environment as customers respond to, among other things, recent U.S. food safety concerns and geopolitical developments. While our outlook remains positive, our financial results could be materially adversely impacted if these disruptions or trends worsen throughout the third quarter of 2026 or beyond.

Current wording

We believe these results reflect the success of our Recipe for Growth strategy (as discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025) and related initiatives against the dynamic consumer environment that has persisted in 2026. In July, we began experiencing low-single-digit headwinds to our comparable restaurant sales trends that we believe were tied to that environment, including recent U.S. food safety concerns and geopolitical developments. While these headwinds worsened over the next several weeks, by the end of August our comparable restaurant sales trends returned to levels generally consistent with those observed before these disruptions.

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Restaurant Development. During the three months ended June 30, 2026, we opened 100 company-owned restaurants, which included 80 restaurants with a Chipotlane. We also opened one international partner-operated restaurant.

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Restaurant Development. During the three months ended September 30, 2026, we opened 84 company-owned restaurants, which included 53 restaurants with a Chipotlane.

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Food, beverage and packaging costs increased 0.8% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was driven by 1.4% of inflation, primarily from beef and freight, and 0.5% of higher protein and produce usage. These increases were partially offset by a 0.5% benefit from menu price increases and 0.5% of lower avocado and dairy costs.

Current wording

Food, beverage and packaging costs decreased 0.5% as a percentage of total revenue for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The decrease was driven by a 0.8% benefit from menu price increases, 0.5% from tariff relief, and 0.3% from a favorable limited-time offer mix. These benefits were partially offset by 0.7% of inflation, primarily from beef and freight, and 0.4% from higher protein usage.

Previous wording

Food, beverage and packaging costs increased 0.6% as a percentage of total revenue for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by 1.1% of inflation, primarily from beef and freight, and 0.5% of higher protein and produce usage. These increases were partially offset by 0.6% of lower avocado and dairy costs and a 0.4% benefit from menu price increases.

Current wording

Food, beverage and packaging costs increased 0.2% as a percentage of total revenue for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily driven by 0.7% of inflation, primarily from beef and freight, and 0.3% from higher protein usage. These increases were partially offset by a 0.5% benefit from menu price increases, and 0.2% from tariff relief.

Previous wording

Labor costs increased 0.7% as a percentage of total revenue for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by 0.4% from wage inflation and performance-based bonuses, 0.2% from costs related to certain legal proceedings, and 0.2% from lower average restaurant sales volumes. These increases were partially offset by a 0.3% benefit from menu price increases.

Current wording

Labor costs increased 0.5% as a percentage of total revenue for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily driven by 0.4% from lower average restaurant sales volumes, 0.4% from wage inflation and performance-based bonuses, 0.3% from additional restaurant labor supporting operational execution, including promotional activity, and 0.1% from insurance-related costs. These increases were partially offset by a 0.7% benefit from menu price increases.

Previous wording

Labor costs increased 0.3% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by 0.3% from wage inflation and performance-based bonuses and 0.2% from restaurant labor execution. These increases were partially offset by a 0.4% benefit from menu price increases.

Current wording

Labor costs increased 0.6% as a percentage of total revenue for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily driven by 0.4% from wage inflation and performance-based bonuses, 0.2% from lower average restaurant sales volumes, and 0.3% from additional restaurant labor supporting operational execution. These increases were partially offset by a 0.4% benefit from menu price increases.

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Occupancy costs increased 0.2% as a percentage of total revenue for the three andsix months ended June 30, 2026 compared to the three and six months ended June 30, 2025. The increase was primarily due to 0.2% of expense associated with new restaurants.

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Occupancy costs increased 0.1% as a percentage of total revenue for thethree months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily due to 0.2% of expense associated with new restaurants.

Previous wording

Other operating costs increased 0.9% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily driven by a 0.3% increase in marketing and promotional activities and inflation across several items, most notably insurance claims, maintenance, and utility costs.

Current wording

Other operating costs increased 1.0% as a percentage of total revenue for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was driven by elevated costs across several items, most notably a 0.4% increase in marketing and promotional activities, 0.2% in delivery, 0.1% in maintenance and 0.1% in utilities.

Previous wording

Other operating costs increased 1.0% as a percentage of total revenue for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was due to the impact from several items, primarily a 0.4% increase in marketing and promotional activities and a 0.2% increase in utilities.

Current wording

Other operating costs increased 1.0% as a percentage of total revenue for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was driven by elevated costs across several items, most notably a 0.4% increase in marketing and promotional activities, 0.1% in utilities and 0.1% in delivery.

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Depreciation and amortization decreased 0.1% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to sales leverage, partially offset by increased depreciation expense associated with new restaurants.

Current wording

Depreciation and amortization increased 0.1% as a percentage of total revenue for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025, primarily due to increased depreciation expense associated with new restaurants partially offset by the benefit of menu price increases.

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Impairment, closure costs, and asset disposals increased in dollar terms for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, primarily due to charges associated with the replacement of restaurant assets and, to a lesser extent, increased impairment of operating lease assets and leasehold improvements in the current period.

Current wording

Impairment, closure costs, and asset disposals increased in dollar terms for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025, primarily due to charges associated with the replacement of restaurant assets and, to a lesser extent, increased impairment of operating lease assets and leasehold improvements in the current period.

Previous wording

Interest and other income, netdecreased in dollar terms for the three andsix months ended June 30, 2026 compared to the three andsix months ended June 30, 2025, primarily due to a decrease in interest income resulting from lower balances of interest bearing securities associated with increased repurchases of our common stock.

Current wording

Interest and other income, netdecreased in dollar terms for the three andnine months ended September 30, 2026 compared to the three andnine months ended September 30, 2025, primarily due to a decrease in interest income resulting from lower balances of interest-bearing securities.

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The effective income tax rate decreased 0.2% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily driven by a 0.6% increase in U.S. federal income tax credits, partially offset by a 0.3% reduction in tax benefits related to option exercises and equity vesting, and a 0.1% increase in other discrete income tax items.

Current wording

The effective income tax rate increased 2.5% for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase was primarily driven by a 1.8% increase in nondeductible expenses and a 0.5% reduction in tax credits.

Previous wording

The effective income tax rate increased 1.1% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by a 1.0% reduction in tax benefits related to option exercises and equity vesting and a 0.3% increase in other discrete income tax items, partially offset with a 0.2% increase in U.S. federal income tax credits.

Current wording

The effective income tax rate increased 1.6% for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was primarily driven by a 0.7% reduction in tax benefits related to option exercises and equity vesting, a 0.6% increase in nondeductible expenses, and a 0.2% increase in other discrete income tax items.

Previous wording

As of June 30, 2026, we had a cash and marketable investments balance of$667.1 million, non-marketable investments of$107.9 million, and restricted cash of$35.6 million. 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: invest in, maintain, and refurbish our existing restaurants; repurchase additional shares of our common stock subject to market conditions; and for general corporate purposes. As of June 30, 2026,$1.7 billion remained available for repurchases of shares of our common stock. 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, 2026, we had a cash and marketable investments balance of$893.7 million, non-marketable investments of$109.2 million, and restricted cash of$35.8 million. 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: invest in, maintain, and refurbish our existing restaurants; repurchase additional shares of our common stock subject to market conditions; and for general corporate purposes. As of September 30, 2026, we had$1.6 billion remaining under our share repurchase authorizations.

Previous wording

Cash provided by operating activities was $1.3 billion for the six months ended June 30, 2026, compared to $1.1 billion for the six months ended June 30, 2025. The increase was primarily due to timing of tax-related payments, and to a lesser extent other changes in non-tax operating assets and liabilities.

Current wording

Cash provided by operating activities was $1.9 billion for the nine months ended September 30, 2026, compared to $1.7 billion for the nine months ended September 30, 2025. The increase was primarily due to timing of tax-related payments, and to a lesser extent other changes in non-tax operating assets and liabilities.

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Cash used in investing activities was $53.4 million for the six months ended June 30, 2026, compared to cash provided by investing activities of $8.1 million for the six months ended June 30, 2025. The change was primarily due to increased capital expenditures of $92.2 million, mainly related to costs associated with new restaurant development and the purchase of new equipment for existing restaurants. We expect continued elevated costs associated with purchases of new equipment for existing restaurants through 2027. This was partially offset by a $29.8 million increase in maturities of investments.

Current wording

Cash used in investing activities was $121.2 million for the nine months ended September 30, 2026, compared to cash used in investing activities of $7.3 million for the nine months ended September 30, 2025. The change was primarily due to increased capital expenditures of $171.7 million, mainly related to costs associated with new restaurant development and the purchase of new equipment for existing restaurants. We expect continued elevated costs associated with purchases of new equipment for existing restaurants through 2027. This was partially offset by a $49.6 million increase in maturities of investments.

Previous wording

Cash used in financing activities was $1.4 billion for the six months ended June 30, 2026, compared to $1.0 billion for the six months ended June 30, 2025. The change was primarily due to increased repurchases of common stock of $357.9 million.

Current wording

Cash used in financing activities was $1.5 billion for the nine months ended September 30, 2026, compared to $1.7 billion for the nine months ended September 30, 2025. The change was primarily due to decreased repurchases of common stock of $218.8 million.