By Rising Star Stocks 
Chipotle spent most of 2025 doing something it had never done before.
The company posted negative comparable restaurant sales for the first time since going public two decades ago. Traffic fell, margins compressed, and at least one major institutional holder exited its position entirely. The stock followed, shedding roughly 40% from its 52-week high. And that was before the full valuation compression hit.
The stock is now down more than 50% from its peak a few years ago, as it lost star CEO Brian Niccol, same-store sales growth slowed, and its premium valuation compressed as investors dialed back estimates for long-term growth.
Here is the thing though. The business is not gone.
What Changed in Q1
Q1 2026 marked Chipotle’s return to positive transaction growth for the first time in several quarters, alongside 7.4% revenue growth to $3.1 billion. After comparable sales declined for several quarters, Chipotle eked out a 0.5% comps gain in Q1 as customer traffic grew again.
That is not a blowout number. But direction matters as much as magnitude here. The question was whether traffic had structurally broken, and the Q1 data says it has not.
Second quarter same-store sales are expected to be up about 1% amid solid demand trends seen in April. That is the number Wall Street will focus on first when results hit tomorrow afternoon.
The Margin Question Is the Real One
In Q1, comparable sales rose 0.5%, but operating margin declined from 16.7% to 12.9% due in part to the biennial All Managers Conference and higher labor costs. Some of that was one-time noise.
The bet for bulls is that the cost headwinds are manageable, the traffic recovery is real, and the margin path back to 25 to 29% restaurant-level returns is still intact. Unit growth is being deliberately restrained, with guidance calling for 350 to 370 openings in 2026. CEO Scott Boatwright has argued for a disciplined pace of growth, rather than chasing an accelerated annual opening target simply to reach a long-term store-count milestone.
That is actually a healthy sign. The company is not papering over comp softness with aggressive new unit counts.
The Menu Bets Are Starting to Move
Menu tests have produced measurable results. Putting an existing side of protein into a cup with its own price point lifted customer incidents 36%. Renaming Build-Your-Own Chipotle to ‘family meals’ in two test markets raised sales 10%. With Chipotle’s new chief brand officer on board as of June 1, the brand’s messaging is set to shift visibly.
Loyalty is a weak point. Loyalty penetration among in-restaurant customers sits at 20%, a figure the CEO himself called weak, which is why the company hired a new chief digital officer out of Hyatt. If that number starts moving, it changes the unit economics conversation entirely.
Where the Stock Stands
Q2 earnings land July 29, with analysts expecting EPS of $0.32 and revenue of about $3.32 billion. CMG has beaten the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 2.7%.
The company-owned restaurant count stood at 4,090 as of March 31, 2026, with a long runway to expand that base internationally and domestically. The long-term unit growth story has not changed. The near-term traffic recovery is just getting started.
The market has priced in a lot of doubt. Tomorrow’s report does not need to be perfect to start closing that gap. It just needs to show that the direction has not reversed again.