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Chipotle Mexican Grill Inc. is taking its foil-wrapped burritos and hefty bowls to Latin America for the first time.
The chain, Orange County’s most vulnerable publicly traded company, signed a development agreement with operator Alsea to open its first round of restaurants in Mexico and scout additional markets in the region also.
The first location will open by early 2026.
“The country’s familiarity with our ingredients and affinity for fresh food make it an attractive growth market for our company,” Chief Business Development Officer Nate Lawton said in a statement.
Its newest partner Alsea already operates over 4,700 restaurants across Latin America and Europe, from Domino’s and Starbucks to P.F. Chang’s and The Cheesecake Factory.
The move into Mexico marks Newport Beach-based Chipotle’s latest push into international markets and its second-ever development partner.
“Through this development agreement, we will continue to leverage our vast knowledge of the Mexican consumer and restaurant industry expertise to bring our customers the best food experiences and brands from around the world,” Alsea Chief Executive Armando Torrado said.
Mexico City-based Alsea follows the addition of franchise operator Alshaya Group in 2023, which opened Chipotle’s first restaurants in the Middle East. Along with the three in Kuwait and two in the United Arab Emirates, there are 86 company-owned locations throughout Canada, the U.K., France and Germany.
In total, Chipotle (NYSE: CMG) counts more than 3,700 restaurants in the US and abroad with plans to open between 315 and 345 new locations companywide in 2025. The long-term goal is 7,000 stores.
The company reported 59 new openings so far in the first quarter.
Stephens analyst Jim Salera expects the deal to boost Chipotle’s efforts to enter other countries.
“We believe CMG will continue to evaluate incremental international growth through a mix of company owned and asset-light, franchise style partnerships,” Salera wrote in a note to investors following the April 21 announcement.
The analyst firm maintained a target price of $54 for the restaurant company.
Single-Digit Growth
Chipotle reported first quarter results April 23, a couple days after announcing its plans for Mexico.
The company posted Q1 revenue of $2.9 billion, up 6.4% from a year ago.
Analysts were expecting an average of $2.96 billion in revenue for the quarter, up 9.4% from the year before. The single-digit increase stands out compared to Chipotle’s recent years of reporting double-digit growth in quarterly sales.
To illustrate, the restaurant chain reported a revenue increase of 13% in the fourth and third quarters of 2024, following an 18% jump in the second and a 14% rise in Q1 compared to 2023.
Comparable restaurant sales fell 0.4%, marking Chipotle’s first decrease in same-store sales since 2020, due to slowed foot traffic.
CEO Scott Boatwright said that “first quarter results were impacted by several headwinds including weather and a slowdown in consumer spending.”
“I am confident that we have a strong plan to return to positive transaction comps by the second half of the year, and during these uncertain times, we will continue to invest in the things that make Chipotle a special brand – our people, culinary, value proposition, innovation and growth,” he added.
The company hit a 52-week low of $44.46 during midday trading earlier this month on April 7. In the pending session after the earnings release, shares crept up 1.2% to $49.36 with a $67 billion market cap.
In the face of tariffs and elevated costs, Boatwright pledged in March to keep menu prices constant and told NBC News there were no current plans to raise them unless they become a “significant headwind.”