Chipotle Mexican Grill (CMG 2.31%) stock had a brutal 2025, as consumers became more discerning with their spending at fast-casual restaurants and the burrito chain's same-store-sales trends turned negative. While sales trends at its restaurants returned to slight growth in Q3, it wasn't enough to prevent the stock from performing poorly last year. Shares fell about 39% in 2025.
Given this backdrop of a rough 2025, Chipotle investors are likely looking for signs of a stabilizing business in 2026. Fortunately, the company just gave investors exactly that. Management announced earlier this week that it is reaffirming its 2025 full-year guidance, and it even said it remains confident in its 2026 strategic plan.
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What the reaffirmation really means
In a Jan. 12 update, Chipotle reaffirmed its full-year 2025 guidance and announced several leadership changes, including the appointment of a new chief marketing officer.
What was the guidance that management reaffirmed? Chipotle expects full-year comparable restaurant sales to decline at a rate in the low single digits. Additionally, Chipotle's last update on guidance included an expectation for 315 to 345 new company-owned restaurant openings in 2025, with over 80% of those locations including a Chipotlane (a drive-thru-style pickup lane).
Management's move to reaffirm its full-year 2025 guidance suggests things seem to have gone according to plan in Q4. Even more, management's explicit mention in the press release of being "confident" in its 2026 strategic plan may be a good sign, because Chipotle CEO Scott Boatwright said some bullish things about 2026 in the company's third-quarter update. Specifically, when an analyst asked Boatwright during Chipotle's third-quarter earnings call if the company could return to mid-single-digit same-store sales growth in 2026, he said he believes it's possible. Although the CEO noted that the fourth quarter of 2025 and the first quarter of 2026 could be challenging, with some easing of consumer pressures more likely to start in Q2.
None of this, of course, guarantees a return to robust same-store sales growth. But by reaffirming its guidance and its confidence in its 2026 strategic plan, some of the downside risks are arguably reduced.
A pressured consumer
In 2026, investors will likely hope for more consistency from Chipotle, given the company's inconsistency last year.
Even in Q3, while Chipotle's comparable restaurant sales increased 0.3% (an improvement from a 4% decline in Q2), margins moved in the wrong direction. Chipotle's operating margin for the period was 15.9%, down from 16.9% a year earlier. And its restaurant-level operating margin -- a measure of how profitable the restaurants are before corporate overhead -- was 24.5%, down from 25.5%.
Chipotle CEO Scott Boatwright noted in the company's third-quarter earnings release that the company continued "to see persistent macroeconomic pressures..."
NYSE: CMG
Key Data Points
Is this a buy signal?
Investors shouldn't get too excited about Chipotle's move to reaffirm its guidance. A low-single-digit decline in full-year same-store sales is not necessarily a sign of a strong business -- and it certainly doesn't support the stock's premium valuation. Even after the stock's sharp decline in 2025, shares still trade at a steep premium to earnings. The stock's current price-to-earnings ratio is 36, and its forward price-to-earnings ratio -- a ratio that measures a stock's price as a multiple of analysts' consensus forecast for a company's earnings per share over the next 12 months -- is 34.
Overall, this reaffirmation from management is a sign of stability. Of course, given the company's challenging backdrop, stabilization is still good news, but probably not good enough to start calling the stock a buy. Until Chipotle's same-store sales growth returns to high single digits or better, I believe this is a stock that deserves a price-to-earnings multiple in the 20s, not the 30s.
Hopefully, when the company reports fourth-quarter results on Feb. 3, management will guide for positive same-store sales growth in 2026 with particularly robust same-store sales growth in the second half of the year. Without guidance like this, I'm not sure if the stock can do well this year.
We'll see.
