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Chipotle Mexican Grill — Q12026 NON-GAAP RECONCILIATION (company IR deck)
Chipotle Mexican Grill (CMG) · 0 slides · Filed Oct 20, 2026
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Slide 1 — CHIPOTLE MEXICAN GRILL, INC.
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES The following tables provide a reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP. Adjusted net income is net income excluding certain legal proceedings, restructuring expenses and stock-based compensation retention. Adjusted labor is labor expense excluding expenses related to certain legal proceedings. Adjusted general and administrative expense is general and administrative expense excluding expenses related to restructuring, certain legal proceedings, and stock-based compensation retention. The adjusted effective income tax rate is the effective income tax rate adjusted to reflect the after-tax impact of non- GAAP adjustments. Restaurant level operating margin is equal to the revenues generated by our restaurants less direct restaurant operating costs, which consist of food, beverage and packaging, labor, occupancy and other operating costs, expressed as a percent of total revenue. This performance measure primarily includes the costs that restaurant level managers can directly control and excludes other costs that are essential to conduct our business. Management uses restaurant level operating margin as a measure of restaurant performance. Management believes restaurant level operating margin is useful because it highlights trends in our core business that may not otherwise be apparent when relying solely on GAAP financial measures. Adjusted restaurant level operating margin is equal to the restaurant level operating margin excluding certain legal proceedings, expressed as a percent of total revenue. Management uses adjusted restaurant level operating margin as a measure of restaurant performance. Management believes adjusted restaurant level operating margin is useful because it highlights trends in our core business that may not otherwise be apparent when relying solely on GAAP financial measures. We present these non-GAAP measures to facilitate a meaningful evaluation of our operating performance across periods. These adjustments are intended to provide greater transparency of underlying performance and to allow investors to evaluate our business on the same basis as management, which uses these non-GAAP measures in evaluating our performance. Our adjusted net income, adjusted diluted earnings per share, adjusted labor expenses, adjusted general and administrative expenses, adjusted effective income tax rate, restaurant level operating margin, and adjusted restaurant level operating margin measures may not be comparable to other companies’ adjusted measures. These adjustments are not necessarily indicative of what our actual financial performance would have been during the periods presented and should be viewed in addition to, and not as an alternative to, our results prepared in accordance with GAAP. Further details regarding these adjustments are included in the tables below. Certain non-GAAP measures presented on a forward-looking basis during our investor conference call, such as Restaurant Level Operating Margin for our second quarter 2026, were not reconciled to the comparable GAAP financial measures because the reconciliation could not be performed without unreasonable efforts. The GAAP measures are not accessible on a forward-looking basis because we are currently unable to predict with a reasonable degree of certainty the type and extent of certain items that would be expected to impact GAAP measures for these periods but would not impact the non-GAAP measures. Such items may include corporate initiatives, litigation expense, impairments on long lived assets, and other items. The unavailable information could have a significant impact on our GAAP financial results.
Slide 2 — Three months ended
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Adjusted Net Income and Adjusted Diluted Earnings per Share (in thousands, except per share amounts) (unaudited) Three months ended March 31, 2026 2025 Net income $ 302,824 $ 386,599 Non-GAAP adjustments: Legal proceedings-Labor(1) 11,875 - Corporate restructuring costs: Recipe for Growth restructuring(2) 2,140 - Legal proceedings-General and administrative(3) 625 - Stock-based compensation(4) 3,007 11,877 Total non-GAAP adjustments 17,647 11,877 Tax effect of non-GAAP adjustments above(5) (4,249) (1,676) After tax impact of non-GAAP adjustments 13,398 10,201 Adjusted net income $ 316,222 $ 396,800 Diluted weighted-average number of common shares outstanding 1,301,859 1,360,719 Diluted earnings per share $ 0.23 $ 0.28 Adjusted diluted earnings per share $ 0.24 $ 0.29 (1) Estimated liability recognized in labor on the condensed consolidated statements of income for legal matters that we expect to exceed typical costs for legal proceedings. (2) Cost for restructuring including employee severance, recruitment, other third-party restructuring costs, and stock-based compensation, net of forfeitures. (3) Estimated liability recognized in general and administrative expenses on the condensed consolidated statements of income for legal matters that we expect to exceed typical costs for legal proceedings. (4) Stock-based compensation for retention equity awards granted to certain executives in connection with the former CEO's departure. (5) Adjustments related to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates.
Slide 3 — Three months ended
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Adjusted Labor (in thousands) (unaudited) Three months ended March 31, 2026 2025 Labor $ 805,411 $ 718,226 Non-GAAP adjustments: Legal proceedings-Labor(1) (11,875) - Total non-GAAP adjustments (11,875) - Adjusted labor $ 793,536 $ 718,226 Adjusted labor as a percent of total revenue 25.7% 25.0% (1) Estimated liability recognized in labor on the condensed consolidated statements of income for legal matters that we expect to exceed typical costs for legal proceedings.
Slide 4 — Three months ended
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Adjusted General and Administrative Expenses (in thousands) (unaudited) Three months ended March 31, 2026 2025 General and administrative expenses $ 203,720 $ 172,783 Non-GAAP adjustments: Recipe for Growth restructuring(1) (2,140) - Legal proceedings-General and administrative(2) (625) - Stock-based compensation(3) (3,007) (11,877) Total non-GAAP adjustments (5,772) (11,877) Adjusted general and administrative expenses $ 197,948 $ 160,906 (1) Cost for restructuring including employee severance, recruitment, other third-party restructuring costs, and stock-based compensation, net of forfeitures. (2) Estimated liability recognized in general and administrative expenses on the condensed consolidated statements of income for legal matters that we expect to exceed typical costs for legal proceedings. (3) Stock-based compensation for retention equity awards granted to certain executives in connection with the former CEO's departure.
Slide 5 — Three months ended
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Adjusted Effective Income Tax Rate (unaudited) Three months ended March 31, 2026 2025 Effective income tax rate 25.4 % 22.9 % Tax impact of non-GAAP adjustments(1) (0.1) (0.2) Adjusted effective income tax rate 25.3 % 22.7 % (1) Adjustments related to the tax effect of non-GAAP adjustments, which were determined based on the nature of the underlying non-GAAP adjustments and their relevant jurisdictional tax rates.
Slide 6 — Three months ended March 31,
CHIPOTLE MEXICAN GRILL, INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Restaurant Level Operating Margin (in thousands) (unaudited) Three months ended March 31, 2026 Percent of total revenue 2025 Percent of total revenue Income from operations $ 397,063 12.9 % $ 479,250 16.7 % Non-GAAP Adjustments General and administrative expenses 203,720 6.6 172,783 6.0 Depreciation and amortization 96,718 3.1 87,211 3.0 Pre-opening costs 11,641 0.4 8,210 0.3 Impairment, closure costs, and asset disposals 9,819 0.3 6,168 0.2 Total non-GAAP Adjustments 321,898 10.4 274,372 9.5 Restaurant level operating margin 718,961 23.3 753,622 26.2 Legal proceedings-Labor(1) 11,875 0.4 - - Adjusted restaurant level operating margin $ 730,836 23.7 % $ 753,622 26.2 % (1) Estimated liability recognized in labor on the condensed consolidated statements of income for legal matters that we expect to exceed typical costs for legal proceedings.