AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Restaurant reach and digital demand are established, but comparative differentiation and barriers to replication remain insufficiently evidenced.
durability · — · The passages do not establish how long a competitive advantage could persist. Growth and equipment initiatives cannot establish durable protection.
customer dependency · — · Transaction growth supports current demand but does not establish dependency, switching friction or persistent customer preference over alternatives.
erosion resilience · — · Sales recovery and realized price benefits coexist with prior comparable sales declines, renewed headwinds and cost pressure; structural resilience cannot be established.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Menu price increases delivered a disclosed labor cost ratio benefit. Second-quarter average check and transactions both increased, following a first-quarter check decline. These demonstrate some pricing realization, with mixed outcomes and no pure price-versus-mix decomposition.
retention · 2/4 · Positive comparable transactions in both early-2026 quarters provide indirect evidence of continuing demand. The 2025 comparable sales decline and renewed headwinds temper that evidence. No repeat-customer rate is supplied; digital share alone does not prove loyalty.
margin resilience · 1/4 · Realized price increases partly cushioned labor pressure, but labor and other operating cost ratios rose and 2025 operating margin declined. The observed protection against cost pressure is weak, although this does not by itself establish an absent moat.
contractual freedom · 3/4 · Point-of-sale transactions and explicit discretion over menu price changes support strong practical freedom to reset customer prices. Competitive resistance constrains economic realization; this is not unlimited pricing power or evidence about every delivery agreement.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 3.92
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 1.22
Financial strength—
Missing required inputs: interestCoverageGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 100.00
- netDebtEbitGrade
- 100.00
- currentRatioGrade
- 38.77
- Debt / FCF (x)
- 0.00
- Net debt / operating income (x)
- -0.18
- Current ratio (x)
- 1.23
Capital allocation99
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 70.73
- 3-year average dilution (%)
- -1.34
- 3-year average SBC / revenue (%)
- 1.14
- cashConversionGrade
- 97.28
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual 2025 operating cash flow substantially exceeded capital expenditure and supported expansion. However, large repurchases exceeded cash remaining after that expenditure, and further first-half 2026 repurchases accompanied declining cash and investment resources. Cash flow growth benefited from tax timing. Outcomes support mixed discipline; repurchase value creation is unproven.
incentive alignment · 3/4 · Implemented multiyear performance equity, disclosed executive ownership guideline compliance and a reduced 2025 company payout factor demonstrate meaningful alignment. Change-in-control provisions allowing PSUs to accelerate at the greater of target or actual performance weaken that alignment. No exceptional grade is warranted.
execution · 2/4 · Actual restaurant openings and improving comparable transactions demonstrate execution, assessed partly through indirect operating outcomes. They coexist with 2025 sales and margin misses and subsequent operating cost pressure. Management's equipment success claims provide supplementary, less conclusive evidence.
governance · 3/4 · The disclosed current independent chair and committee structure, majority voting with a resignation requirement, and adopted compensation recovery policy establish strong governance safeguards. These are actual arrangements rather than proposed awards or assumed leadership qualities; their effectiveness and exceptional durability are not established.
Evidence
As of June 30, 2026, we owned 4,074 Chipotle restaurants throughout the United States and 112 international Chipotle restaurants.
MD&A / restaurant footprint at June 30, 2026 · Filed 31/07/2026
The increase is attributable to a 1.2% increase in average check and a 1.0% increase in transactions.
MD&A / second-quarter 2026 average check and transactions · Filed 31/07/2026
Digital sales represented 38.3% of total food and beverage revenue for the three months ended June 30, 2026, an increase from 35.5% for the three months ended June 30, 2025.
MD&A / digital sales share · Filed 31/07/2026
These increases were partially offset by a 0.4% benefit from menu price increases.
MD&A / menu price contribution to second-quarter labor cost ratio · Filed 31/07/2026
The results in restaurants with the new equipment are compelling with higher taste-of-food and overall guest satisfaction scores, improved throughput and a meaningful increase in comparable sales.
Shareholder letter / management account of equipment results · Filed 28/04/2026
Many of our competitors also offer dine-in, carry-out, online, catering, and delivery services.
Business / competing service channels · Filed 04/02/2026
Among our main competitors are restaurant formats that claim to serve higher quality ingredients without artificial flavors, colors and preservatives, and that serve food quickly and at a reasonable price.
Business / competing ingredient and value positioning · Filed 04/02/2026
Comparable restaurant sales decreased 1.7%.
Compensation discussion / 2025 comparable sales decline · Filed 28/04/2026
We have recently experienced low-single-digit headwinds to our comparable restaurant sales trends that we believe are tied to that environment as customers respond to, among other things, recent U.S.
MD&A / recently experienced comparable sales headwinds · Filed 31/07/2026
Labor Costs Three months ended June 30, Percentage Six months ended June 30, Percentage 2026 2025 change 2026 2025 change (dollars in millions) (dollars in millions) Labor costs $ 836.5 $ 756.3 10.6 % $ 1,641.9 $ 1,474.5 11.4 % As a percentage of total revenue 25.0 % 24.7 % 0.3 % 25.5 % 24.8 % 0.7 % Labor costs increased 0.3% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
MD&A / second-quarter and first-half labor cost ratios · Filed 31/07/2026
Other Operating Costs Three months ended June 30, Percentage Six months ended June 30, Percentage 2026 2025 change 2026 2025 change (dollars in millions) (dollars in millions) Other operating costs $ 499.8 $ 428.7 16.6 % $ 980.4 $ 843.8 16.2 % As a percentage of total revenue 14.9 % 14.0 % 0.9 % 15.2 % 14.2 % 1.0 % Other operating costs increased 0.9% as a percentage of total revenue for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
MD&A / other operating cost ratios · Filed 31/07/2026
The increase is attributable to an increase in transactions of 0.6%, partially offset by a 0.1% decrease in average check.
MD&A / first-quarter 2026 transactions and average check · Filed 30/04/2026
Operating margin was 16.2%, a decrease from 16.9% in 2024.
Compensation discussion / 2025 operating margin comparison · Filed 28/04/2026
Increases in ingredient prices could adversely affect our results if we choose for competitive or other reasons not to increase menu prices at the same rate at which ingredient costs increase, or if menu price increases result in guest resistance.
Market risk / discretion over menu prices and guest resistance · Filed 31/07/2026
Revenue Recognition We generally recognize revenue, net of discounts and incentives, when payment is tendered at the point of sale.
Accounting policies / point-of-sale revenue recognition · Filed 04/02/2026
Cash provided by operating activities was $2.1 billion for the year ended December 31, 2025, compared to $2.1 billion for the year ended December 31, 2024.
MD&A / 2025 and 2024 operating cash flow · Filed 04/02/2026
Our total capital expenditures for 2025 were $666.3 million.
MD&A / actual 2025 capital expenditure · Filed 04/02/2026
During the years ended December 31, 2025, 2024, and 2023 we repurchased $2,417,673, $995,765, and $589,840 of stock at an average price per share of $42.54, $57.21, and $36.55, respectively.
Note 7 / actual annual share repurchases · Filed 04/02/2026
During the six months ended June 30, 2026 and 2025, we repurchased $1,331,572 and $989,580 of stock at an average price of $34.35 and $52.32, respectively.
Note 6 / first-half 2026 share repurchases · Filed 31/07/2026
Cash provided by operating activities was $1.3 billion for the six months ended June 30, 2026, compared to $1.1 billion for the six months ended June 30, 2025.
MD&A / first-half operating cash flow · Filed 31/07/2026
The increase was primarily due to timing of tax-related payments, and to a lesser extent other changes in non-tax operating assets and liabilities.
MD&A / tax timing contribution to cash flow growth · Filed 31/07/2026
Key features: Our LTI mix for 2025 was 60% PSUs with a three-year performance period, 20% seven-year term stock only stock appreciation rights (“SOSARs”) that vest in two equal installments on the 2nd and 3rd anniversaries of the grant date, and 20% in either SOSARs or restricted stock units (“RSUs”), at the executive’s election, that vest in two equal installments on the 2nd and 3rd anniversaries of the grant date.
Compensation discussion / implemented 2025 long-term incentive structure · Filed 28/04/2026
CPF Performance Goals Metric Weighting Threshold Performance Target Performance Maximum Performance 2025 Actual Results 2025 % Payout CRS 40% 2.0% 5.0% 10.0% (1.7)% 0% RCF Margin % 40% 26.25% 27.0% 28.5% 25.62% 0% SARs 20% 438 460 490 490 200% Total CPF 40% Individual Performance Factor (“IPF”) An executive’s AIP payout also depends on his or her achievement of individual performance goals.
Compensation discussion / actual 2025 performance and company payout factor · Filed 28/04/2026
As of December 31, 2025, all of our NEOs who were employed by us at year end satisfied or exceeded these requirements.
Compensation discussion / year-end executive ownership guideline compliance · Filed 28/04/2026
Board Leadership Structure Our current Board leadership structure consists of an independent Chairman of the Board, a position held by Scott Maw; Board committees led by independent directors; executive sessions of the directors at each regular Board meeting; and active oversight by all directors.
Corporate governance / current independent chair and committee structure · Filed 28/04/2026
Directors are elected by a majority of votes cast in uncontested elections and any director who does not receive a majority of votes cast is required to submit his or her resignation for consideration by the Board.
Governance summary / majority voting and resignation requirement · Filed 28/04/2026
Chipotle’s Executive Compensation Recovery Policy requires the Board to pursue reimbursement of incentive-based compensation paid or awarded to an executive officer if the payment or award was based on the achievement of certain financial results that subsequently were the subject of a restatement, and a lower payment or award would have been made to the executive officer based upon the restated financial results.
Compensation discussion / adopted executive recovery policy · Filed 28/04/2026
We opened 334 company-owned restaurants, with 257 locations including a Chipotlane, our digital order drive thru pickup lane, and 11 international partner-operated restaurants.
Compensation discussion / actual 2025 restaurant openings · Filed 28/04/2026
In addition, all unvested LTI held by the named executive officer at the time of termination would vest in full, with PSUs vesting at the greater of (a) target or (b) actual performance, as determined based on the company’s performance through the date of the change in control.
Compensation arrangements / change-in-control equity acceleration terms · Filed 28/04/2026
As of June 30, 2026, we had $810.5 million in cash and cash equivalents, current and long-term investments, and restricted cash, of which the majority are interest bearing.
Market risk / June 2026 cash and investment resources · Filed 31/07/2026
As of December 31, 2025, we had $1.3 billion in cash and cash equivalents, current and long-term investments, and restricted cash, of which the substantial majority are interest bearing.
Market risk / December 2025 cash and investment resources · Filed 04/02/2026
