Chipotle Mexican Grill (CMG) will likely deliver a sales and margin beat relative to guidance and consensus in Q1, while reporting moderate same-store-sales growth given the still challenged consumer sentiment, weather, and broader macro headwinds, UBS Securities said in a note Monday.
The brokerage said it expects management to maintain largely conservative guidance, including for a modest improvement in Q2 same-store-sales growth, while full year comparable sales targets remain nearly flat.
UBS believes Q1 same-store-sales softness was likely driven by macro pressures and weather impacts, with some benefit from the Chicken Al Pastor launch, but with the lap of Honey Chicken a possible headwind in March, according to the note.
While macro challenges persist in 2026, UBS said it expects trends to improve through the year, driven by menu innovation, marketing collaborations, an emphasis on protein, digital initiatives, the high-efficiency equipment package rollout, build-your-own Chipotle platform, and the catering pilot.
Margins should improve in the second half as inflation eases, prices grow, and the inflation gap improves, according to the note. The brokerage models Q1 EPS of $0.25 and 2026 EPS of $1.18.
The company is scheduled to report Q1 results on Wednesday.
UBS maintained a buy rating on Chipotle with a price target of $45.
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