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Back of Napkin

Chipotle Mexican Grill, Inc. CMG

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Chipotle's customer traffic was negative for four straight quarters and turned positive at +1.0% in the most recent one.

Restaurant-level margin fell from 26.2% to 25.2% over the same period, so the recovery is arriving at a lower profitability than the decline started from.

CMG · price with moving averages

Daily · 6MWeekly · 3Y
$26$37$47$58$68 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Chipotle serves burritos and bowls assembled in front of the customer from a short ingredient list. It owns every restaurant in North America and franchises none of them, which means it captures the full economics and carries the full cost. Just over 4,200 locations, opening roughly 300 a year.

The model works because a limited menu can be executed fast at high volume. When throughput slips, everything slips with it.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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