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Chipotle Mexican Grill (CMG) is trading roughly flat following its Q4 earnings report, as investors weigh mixed fundamentals against already-muted expectations. The burrito chain continues to face demand headwinds, as a modest EPS beat and in-line revenue were overshadowed by a return to negative comparable sales and a disappointing initial comp outlook for FY26.

• Q4 comparable sales declined -2.5%, reversing the modest +0.3% comp gain in Q3 and following a -4.0% comp in Q2, highlighting ongoing traffic softness. For FY26, CMG guided comps to be "about flat," which came in slightly below Street expectations, particularly given the easy comparison against FY25 comps of -1.7%.
• Management pointed to encouraging underlying trends in January following the launch of its high-protein menu, with additional momentum expected from the return of Chicken al Pastor as a limited-time offer beginning Feb. 10, though visibility remains limited early in the year.
• The company noted a shift in consumer behavior toward value, high-quality protein, fiber, and clean ingredients, aligning with its recent protein-focused offerings. These range from a $3.50 single taco with 15g of protein to a double-protein bowl with over 80g of protein, along with a new High Protein Cup priced around $3.80, catering to smaller portion demand linked to GLP-1 adoption. Early results have been encouraging.
• To further stimulate demand, CMG plans to increase its menu innovation cadence to four LTOs in 2026, beginning with the return of Chicken al Pastor next week, as LTOs tend to attract new guests and increase visit frequency.
• Margins are expected to face pressure in FY26, primarily due to CMG's decision to take less pricing than inflation. Full-year price increases are expected in the 1-2% range, while inflation is projected at 3-4%, with the largest price-cost gap occurring in Q1. Management views this pressure as temporary.

Briefing.com Analyst Insight:

CMG's Q4 results did little to change the narrative that the brand is still working through a difficult traffic environment. The return to negative comps and the underwhelming FY26 comp outlook were disappointing, especially given the easy comparison year ahead. While management is optimistic about improving trends tied to protein-focused menu innovation and increased LTO activity, uncertainty around consumer behavior remains high, particularly as diners continue to emphasize value. CMG's premium price points and lack of a true value menu remain notable disadvantages in the current environment. That said, it is a constructive sign that the stock is holding up relatively well despite the weak comp outlook, suggesting that a significant amount of negativity may already be priced into the shares.