Chipotle's outlook for the year casts doubt on a restaurant-industry rebound

By Bill Peters

Shares fall after hours, and CFO says 'consumer trends have been really tough to predict'

Chipotle reported fourth-quarter results on Tuesday.

Shares of Chipotle Mexican Grill slid after hours Tuesday, after the fast-casual Mexican chain's same-store sales outlook came in below expectations, although it expressed confidence about its efforts to jump on the protein craze and plans to roll out new menu items.

Chipotle (CMG) said it expects same-store sales to be "about flat" this year. That compared with Wall Street's expectations for a 1.7% gain, amid broader hopes for a restaurant-industry rebound this year.

Chipotle's stock fell nearly 6% after hours.

"We think that it's still very early in the year, and consumer trends have been really tough to predict," Chief Financial Officer Adam Rymer said during Chipotle's earnings call on Tuesday. "So we wanted to be conservative in our full-year guide to account for this."

Still, he said he expected same-store sales to improve through the year, as Chipotle rolls out four limited-time menu items this year, relaunches its rewards program and tries to bring in better talent and technology, including artificial intelligence.

Chipotle launched its high-protein menu in December. During Tuesday's call, management said that interest in the protein menu, along with sales momentum overall, had been growing until Winter Storm Fern last month closed some restaurants and kept people indoors.

CEO Scott Boatwright said during the call that consumers would continue to be focused on meal deals and wellness this year.

"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," he said.

Earlier in the day, PepsiCo (PEP) also called out consumers' interest in those trends. Starbucks Corp. (SBUX) has also been trying to sell more protein-boosted drinks.

Tuesday's outlook for Chipotle came after a year in which fast-casual chains dealt with signs of "slop-bowl" fatigue and more discounting competition from fast-food chains as well as sit-down chains like Chili's. Those chains have rolled out more value deals to win back consumers turned off by menu-price increases over the past several years.

Chipotle's stock is down 34.3% over the past 12 months. But prior to the results, analysts said that for the restaurant industry overall, weaker results last year would make it easier for restaurants to increase sales this year.

They also said that tax breaks from last year's "Big Beautiful Bill" legislation could help loosen up spending from wealthier shoppers, like those who often visit Chipotle. But they worried about how lower-income shoppers would be affected by the bill's curbs on public assistance.

During the fourth quarter, Chipotle's revenue rose 4.9% to $2.98 billion, with same-store sales down 2.5%. Adjusted earnings per share were 25 cents.

Analysts polled by FactSet expected Chipotle to report fourth-quarter adjusted earnings per share of 24 cents, with revenue of $2.96 billion and a same-store sales decrease of 2.9%.

-Bill Peters

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02-03-26 2022ET