Chipotle’s earnings were better than expected, but a flat sales outlook for the year has raised concerns.
- The stock closed up 2% on Tuesday, heading into earnings after the markets close and snapped a six-day losing streak.
- CEO Scott Boatwright said the company’s focus is now on accelerating innovation to deliver new offerings.
- In an interview with Mad Money host Jim Cramer, Boatwright said Chipotle was seeing positive momentum following the launch of its protein menu.
Chipotle Mexican Grill’s stock fell nearly 6% in after-hours trading on Tuesday and is on track for its worst single-day performance if the losses carry into the next session. Shares slid after the burrito chain acknowledged that its profit margins are likely to remain under pressure this year, as the company steps up investments while also contending with signs of slowing consumer demand.
CMG shares have gained nearly 6% so far this year, following a 39% plunge in 2025 as restaurant traffic was pressured by consumers, particularly lower- and middle-income groups opting to eat at home rather than dine out.
Menu Innovation At Chipotle
CEO Scott Boatwright said the company’s focus is now on accelerating innovation for new offerings and occasions that are increasingly important to the chain’s guests. He added that to further drive demand, the company will increase menu innovation cadence to four limited-time offers in 2026, including the return of Chicken Al Pastor next week.
“As we move into 2026, the consumer landscape is shifting with a heightened focus on value as well as high-quality protein, fiber, and clean ingredients,” Boatwright said during a post-earnings call on Tuesday. He noted that early results from introducing the “High Protein Menu” are strong, with the incidence of extra protein increasing by 35%, and that our recent double-protein promotion achieved a record digital sales day.
In an interview with “Mad Money” host Jim Cramer on CNBC, Boatwright said Chipotle was seeing positive momentum after the launch of the protein menu and menu innovation this year, "will be like nothing you have seen historically.”
Will 2026 Come With Great Pressure For CMG?
CFO Adam Rymer said margins in 2026 will be under pressure, largely due to the investment required to maintain a lower price relative to the inflation the company is experiencing. “I would emphasize that's temporary, and we'll balance it out towards the end of the year,” he said.
The company expects the impact of pricing in the first quarter to be about 70 basis points, compared with its expected inflation in the mid-single-digit range. Chipotle’s restaurant-level margin was 23.4% in the fourth quarter, down 140 basis points year-over-year.
Boatwright told Cramer that Chipotle needs to protect and strengthen the core brand, according to TheFly. He noted that the company plans to evolve the brand message and revamp the rewards program. The CEO highlighted that the lower-end consumer is "bouncing back” in the chat with Cramer.
What Is Retail Thinking?
Retail sentiment on Chipotle improved to ‘extremely bullish’ from ‘bullish’ a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits. In the last 24 hours, retail message volume on Stocktwits jumped 685% for the stock.
Mediterranean fast-casual restaurant chain CAVA Group’s retail sentiment was in the ‘bearish’ territory compared to ‘extremely bearish’ a day ago, with message volumes at ‘normal’ levels.
A bullish user on Stocktwits said CMG’s earnings were good, “just not stellar, but steady growth nevertheless.”
Shares of Chipotle have declined 32% in the last 12 months, while Cava’s stock has slumped 57% during the same period.
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