Chipotle Mexican Grill surprised Wall Street on Wednesday by reporting a modest increase in first-quarter comparable sales, snapping a streak of declines that had weighed on the stock. Shares of the fast-casual chain jumped roughly 7% in after-hours trading following the release.
For the quarter ended March 31, comparable sales at company-owned restaurants open at least 13 months edged up 0.5%, a sharp reversal from the 2.5% drop in the fourth quarter and the 1.7% decline for all of 2025. Analysts had expected a 0.8% decline, according to LSEG data cited by Reuters.
Total revenue reached $3.09 billion, up 7.4% from a year earlier, driven by new restaurant openings and a 0.6% uptick in transaction counts. The average check slipped 0.1%. Digital orders accounted for 38.6% of total food and beverage sales.
Profitability, however, came under pressure. Operating margin narrowed to 12.9% from 16.7% in the same period last year, while adjusted restaurant-level operating margin fell to 23.7% from 26.2%. Adjusted diluted earnings per share dropped 17.2% to 24 cents.
Menu innovation proved to be a key driver of traffic. Chicken al Pastor, a limited-time offering, was highlighted as the top recent traffic pull by Placer.ai data. The company is now doubling down on Honey Chicken, which returned to menus in the U.S., Canada, U.K., France, and Germany on April 28 after becoming Chipotle's best-performing limited-time option in 2025.
"This item set a new standard for our limited-time offers," said Stephanie Perdue, Chipotle's interim chief marketing officer. "Customer requests for its return came in almost immediately." For the first time, Honey Chicken is also available as part of the High Protein Cup lineup, aligning with the broader industry push toward higher-protein choices.
CEO Scott Boatwright described the quarter as one that "exceeded expectations," citing "tangible progress" in operations, digital, menu innovation, staffing, and development. The company opened 49 new company-owned restaurants during the period, 42 of which feature Chipotlanes—drive-through lanes dedicated to digital-order pickups.
Despite the positive sales surprise, Chipotle faces persistent cost pressures. Food, beverage, and packaging costs rose as a percentage of revenue, squeezed by beef and freight inflation and a higher proportion of produce in the menu mix. Labor costs also increased, impacted by wage inflation, lower average restaurant sales, and pricier benefits. Lower-income consumers remain cautious, and a single quarter of improved transactions does not eliminate that risk.
The broader fast-food industry is grappling with similar headwinds. Yum Brands, operator of Taco Bell and KFC, topped first-quarter expectations on Wednesday by emphasizing value deals. McDonald's and Burger King are also rolling out promotions to lure back cost-conscious diners. "Offering good value while keeping things fresh is how brands stand out," said Lale Akoner, global market strategist at eToro.
Chipotle is maintaining its 2026 outlook, targeting roughly flat full-year comparable restaurant sales and plans to open 350 to 370 new locations, including 10 to 15 international restaurants run by partners. About 80% of company-owned builds are expected to include a Chipotlane.
