How CMG (Chipotle Mexican Grill) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a fast-casual restaurant chain like CMG makes money is essential for investors and anyone interested in the business of restaurant and food service. In this post, we break down CMG's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick CMG Overview

CMG operates a network of fast-casual restaurants specializing in burritos, tacos, and bowls, focusing on fresh, customizable Mexican-inspired cuisine. Revenue comes primarily from in-restaurant and digital food sales across company-owned locations. The company does not franchise, so all sales flow directly through its owned stores. Additional context: CMG’s business is concentrated in North America, with a growing digital ordering and delivery segment, but no significant international or franchise revenue.

Revenue Breakdown

• Total Revenue (Q3 2025): $3.00B (+7.5% YoY)
  • Food and Beverage Sales: $3.00B (100% of total)
  • Other Revenue: $19.8M (<1% of total, classified as "Other income")
  • Growth is powered by new restaurant openings, higher same-store sales, and digital order growth.

Gross Profit and Margins

• Gross Profit: $735.6M (24.5% gross margin)
  • Cost of Revenue: $2.27B (+9.0% YoY)
  • CMG maintains robust margins due to its scalable restaurant model, menu pricing power, and operational efficiencies.
• Most costs come from food ingredients, labor, occupancy, and direct operating expenses.

Operating Income and Expenses

• Operating Income: $477.2M (+0.8% YoY, 15.9% margin)
• Operating Expenses: $258.4M (+8.2% YoY)
  • R&D: Not separately disclosed (CMG typically invests in menu innovation and technology, but does not break out R&D)
  • SG&A: $146.7M (+15.9% YoY, 4.9% of revenue) — includes corporate overhead, marketing, and administrative costs
  • CMG continues to invest in digital platforms, restaurant expansion, and marketing while maintaining cost discipline.

Net Income

• Pre-Tax Income: $497.0M (-1.1% YoY, 16.5% margin)
• Income Tax: $114.9M (23.1% effective tax rate)
• Net Income: $382.1M (-1.4% YoY, 12.7% net margin)
• CMG converts a significant portion of sales into profit due to its efficient operations and strong brand pricing power.

What Drives CMG's Money Machine?

• Restaurant Food Sales: Over 99% of revenue comes from direct food and beverage sales at company-owned restaurants.
• Same-Store Sales Growth: Comparable restaurant sales increased, driven by higher traffic and menu price increases.
• Digital and Delivery Investment: CMG invests in digital ordering, loyalty programs, and delivery partnerships to capture changing consumer habits.
• Restaurant Expansion: New store openings are a key future growth area, though upfront costs mean new locations may take time to reach full profitability.

Visualizing CMG's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A and direct restaurant costs) taking the largest chunk.
• Even after significant investments in expansion and digital platforms, 12.7% of revenue drops to the bottom line.

Key Takeaways

• CMG's money comes overwhelmingly from in-restaurant and digital food sales
• High gross and net margins illustrate the power of CMG's scalable, direct-ownership business model
• Heavy investment in digital and restaurant expansion, balanced by efficiency in operating costs
• Ongoing growth is driven by new store openings, menu innovation, and digital sales

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FAQ About CMG's Income Statement

1. What is the main source of CMG's revenue in 2025?

CMG generates over 99% of its revenue from food and beverage sales at company-owned restaurants. Other revenue, such as miscellaneous income, is immaterial.

2. How profitable is CMG in Q3 2025?

CMG reported net income of $382.1M in Q3 2025, with a net margin of approximately 12.7%, reflecting strong profitability driven by operational efficiency and menu pricing.

3. What are the largest expense categories for CMG?

The biggest expenses on CMG's income statement are cost of revenue (ingredients, labor, occupancy) and operating expenses, particularly SG&A, which reached $146.7M in Q3 2025 as CMG prioritizes digital investment and marketing.

4. Why does [segment/division] operate at a loss?

CMG does not report separate unprofitable segments, but new restaurant openings may initially operate at a loss due to upfront costs and ramp-up periods. The company invests aggressively in expansion, believing these will drive long-term growth—even if new locations are unprofitable at first.

5. How does CMG's effective tax rate compare to previous years?

CMG's effective tax rate in Q3 2025 was 23.1%, consistent with prior years. This moderate rate reflects the company's U.S.-centric operations and standard corporate tax treatment.