[Management View]
Chipotle reported Q2 2025 sales of $3.1 billion, reflecting 3% YoY growth, despite a 4% decline in comparable sales. Management emphasized strategic priorities, including digital engagement, menu innovation, operational efficiency, and international expansion. Key initiatives like the rollout of high-efficiency equipment and the introduction of new menu items such as Chipotle Honey Chicken and Adobo Ranch were highlighted as drivers of future growth.

[Outlook]
Management expects full-year FY2025 comparable sales to be flat, citing ongoing consumer volatility. Plans include accelerating international expansion, increasing menu innovation, and leveraging digital tools to enhance customer engagement. The company remains committed to achieving mid-single-digit comp growth and surpassing $4 million in AUVs over the long term.

[Financial Performance]
- Sales: $3.1 billion (+3% YoY)
- Comparable Sales: -4% YoY
- Digital Sales: 35.5% of total sales
- Restaurant-Level Margin: 27.4% (-150 bps YoY)
- Adjusted Diluted EPS: $0.33 (-3% YoY)
- New Restaurants: 61 opened, including 47 Chipotle Lanes

[Q&A Highlights]

**Question 1:** How effective was the "Summer of Extras" digital marketing program?
**Answer:** The program engaged 5 million participants, with 40% transacting. Enrollments increased 14% YoY, and low-frequency users showed higher engagement. Management plans to leverage these learnings for future campaigns.

**Question 2:** Can you elaborate on Q2 trends and expectations for Q3?
**Answer:** April saw strong trends, but May softened due to low consumer sentiment. June rebounded with positive comps and transactions, driven by marketing initiatives. July has been choppy but remains in the 7%-8% two-year comp range. Management expects Q3 comps to stabilize around 8%.

**Question 3:** Is Chipotle's mid-single-digit comp growth target realistic given macro challenges?
**Answer:** Management attributes current headwinds to macro factors, particularly low consumer confidence. Initiatives like menu innovation, rewards programs, and operational improvements are expected to drive recovery.

**Question 4:** How is new store productivity performing?
**Answer:** New store productivity remains strong at slightly above 80%, consistent with historical levels.

**Question 5:** Are there concerns about consumer fatigue with marketing and menu innovation?
**Answer:** Management views recent initiatives as tests to address seasonal lulls. Learnings will inform future strategies, with confidence in the ability to drive consumer engagement.

**Question 6:** How does competition impact Chipotle's performance?
**Answer:** While some share loss occurred in April-May, Chipotle regained share in June-July. Management sees no significant competitive threats and remains focused on core brand strengths.

**Question 7:** What is the outlook for international expansion?
**Answer:** Progress in Canada and Europe is encouraging, with plans to accelerate growth in the Middle East and Mexico. Management sees long-term potential for hundreds of restaurants in existing markets.

**Question 8:** How will high-efficiency equipment impact operations?
**Answer:** Early results show labor efficiencies of 2-3 hours per day, improved culinary consistency, and potential for higher throughput. Full rollout is expected to take three years.

**Question 9:** Is Chipotle's value proposition resonating with consumers?
**Answer:** Management acknowledges challenges in communicating value and plans to emphasize the brand's unique offerings in future campaigns.

**Question 10:** What is the margin outlook for the second half of 2025 and beyond?
**Answer:** Management expects margin expansion through transaction growth, cost efficiencies, and operational improvements. Long-term restaurant-level margins of 29%-30% are achievable with mid-single-digit comp growth.

[Sentiment Analysis]
Analysts expressed cautious optimism, focusing on macro challenges and the effectiveness of Chipotle's initiatives. Management maintained a confident tone, emphasizing long-term growth potential and operational improvements.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|-------------------------|-----------------|-----------------|------------|
| Sales | $3.1 billion | $3.0 billion | +3% |
| Comparable Sales | -4% | +3% | -7% |
| Digital Sales | 35.5% | 37% | -1.5% |
| Restaurant-Level Margin| 27.4% | 28.9% | -150 bps |
| Adjusted EPS | $0.33 | $0.34 | -3% |

[Risks and Concerns]
1. Persistent consumer volatility and low confidence impacting comparable sales.
2. Rising labor costs and wage inflation.
3. Competitive pressures in the fast-casual segment.
4. Execution risks in international expansion and equipment rollout.

[Final Takeaway]
Chipotle's Q2 2025 results reflect modest growth amid macroeconomic challenges, with a focus on digital engagement, menu innovation, and operational efficiency. While comparable sales declined, management's strategic initiatives, including high-efficiency equipment and international expansion, position the company for long-term growth. Analysts remain cautiously optimistic, with attention on the effectiveness of these initiatives in driving recovery and achieving mid-single-digit comp growth.