Item 1. BUSINESS

General

Chipotle Mexican Grill, Inc., a Delaware corporation, together with its subsidiaries (“Chipotle,” “we,” “us,” or “our”) owns and operates Chipotle Mexican Grill restaurants, which feature a relevant menu of burritos, burrito bowls (a burrito without the tortilla), quesadillas, tacos, and salads. We strive to cultivate a better world by serving responsibly sourced, classically cooked, real food with wholesome ingredients and without artificial colors, flavors or preservatives. We are passionate about providing a great guest experience and making our food more accessible to everyone while continuing to be a brand with a demonstrated purpose. Our first Chipotle restaurant opened in Denver, Colorado in 1993. Over 30 years later, our devotion to seeking out high-quality ingredients, raised with respect for animals, farmers, and the environment, remains at the core of our commitment to Food with Integrity.

As of December 31, 2024, we owned and operated 3,644 Chipotle restaurants throughout the United States (“U.S.”) and 82 international Chipotle restaurants. Additionally, we had three international licensed restaurants. We manage our U.S. operations based on ten regions and aggregate our operations to one reportable segment. Our revenue is derived from sales by our restaurants.

Business Strategy

We are a brand with a demonstrated purpose of Cultivating a Better World. Our mission is to win today while we grow our future by focusing on five key fundamental strategies:

• Running successful restaurants with a people accountable culture that provides great Food with Integrity while delivering exceptional in-restaurant and digital experiences;

• Amplifying technology and innovation to drive growth and productivity at our restaurants, support centers and in our supply chain;

• Making the brand visible, relevant, and loved to acquire new guests and improve overall guest engagement;

• Sustaining world class people leadership by developing and retaining top talent at every level; and

• Expanding access and convenience by accelerating new restaurant openings in North America and internationally.

Food with Integrity

Serving high-quality food at reasonable prices is critical to ensuring guests enjoy wholesome food at a great value. In Chipotle-owned and operated restaurants, we strive to serve only animal products that are raised in accordance with criteria we have established in an effort to improve sustainability and promote animal welfare, and without the use of non-therapeutic antibiotics or added growth hormones. We brand our meats as “Responsibly Raised®.” We also seek to use responsibly grown produce, by which we mean produce grown by suppliers whose practices conform to our Food with Integrity standards and our priorities with respect to environmental considerations and employee welfare. For more information about our sustainability and animal welfare initiatives, see our biennial Sustainability Report and interim Update Report on our website www.chipotle.com/sustainability.

Purchasing

Maintaining the high levels of quality and safety we demand in our restaurants depends in part on our ability to acquire high-quality, fresh ingredients and other necessary supplies that meet our specifications from reliable suppliers. We work with 26 independently owned and operated regional distribution centers that purchase from various suppliers we carefully select based on the suppliers' understanding of and adherence to our mission and Food with Integrity standards, quality and price availability. We have also sought to increase the number of suppliers for our ingredients to help mitigate pricing volatility and reduce our reliance on one or several suppliers, which could create supply shortages. In addition, we closely monitor industry news, trade tariffs, weather, exchange rates, foreign demand, geopolitical crises and other world events that may affect our ingredient prices or available supply. Certain key ingredients are purchased from a small number of suppliers.

Quality Assurance and Food Safety

We are committed to serving only safe, high-quality food. Our food safety and quality assurance teams work to ensure compliance with our food safety programs and practices, components of which include:

• naturally derived inhibitors to prevent microbial growth in ingredients;

• advanced technologies and tools that reduce or eliminate pathogens while maintaining food quality;

• enhanced restaurant procedures and protocols for handling ingredients and sanitizing surfaces in our restaurants;

• food safety certifications;

• internal and third-party restaurant inspections;

• small grower support during on-site audits;

• supplier interventions steps to mitigate food safety risks before ingredients reach Chipotle; and

• ingredient traceability.

These and other food safety practices underscore our commitment to be a leader in food safety while continuing to serve high-quality food that our guests love. Our food safety and quality assurance teams establish and monitor our quality and food safety programs and work closely with suppliers to ensure our high standards are met throughout the supply chain. We maintain a limited list of approved suppliers, many of whom are among the top suppliers in the industry. In addition, we have a team approach where our training, operations, culinary, legal and restaurant food safety and quality assurance departments develop and implement operating standards for food quality, food preparation, restaurant cleanliness, employee health protocols, and safety in the restaurants. Our food safety programs are also intended to ensure we not only continue to comply with applicable food safety regulations, but also establish Chipotle as an industry leader in food safety. To help achieve this goal, we have a Food Safety Advisory Council comprised of some of the nation’s foremost food safety authorities. The Food Safety Advisory Council is charged with evaluating our programs and advising us on ways to maintain and elevate our food safety program. Our food safety and quality assurance team members hold board seats and participate in technical working groups with several associations. This gives us the opportunity to learn and share our knowledge and expertise with other food safety professionals and regulatory agencies.

Digital Business and Innovation

Our digital platform continues to be a strategic driver of our growth. Digital sales represent food and beverage revenue for company-owned restaurants generated through the Chipotle website, Chipotle app or third-party delivery aggregators and include revenue deferrals associated with Chipotle Rewards. Digital sales represented 35.1% of food and beverage revenue in 2024, compared to 37.4% in 2023. We have made digital ordering convenient with continued enhancements to our app and by building more Chipotlanes, which is our drive through format for guest pick-up of digital orders. We are also investing in technology and tools to modernize the back of house of our restaurants and to improve the team member experience.

Human Capital

At Chipotle, our vision is to cultivate an environment where our employees can thrive and grow into great leaders. We believe in investing and supporting our people because they are our most important asset. As of December 31, 2024, Chipotle employed 130,504 people worldwide and 1,328 contract workers. Of our employees, 127,820 worked in the United States, and 2,684 worked internationally across Canada, France, Germany, and the United Kingdom. Within the U.S., 126,233 employees worked in our restaurants, and 1,587 in our Restaurant Support Centers and Field Leadership. There were no union petitions or campaigns in 2024, and we continue to bargain in good faith with the one restaurant that voted in 2022 to form a union. We also continue to focus on building a positive people culture where employees feel supported, heard, and are able to grow with Chipotle.

Talent Acquisition

We remain committed to the growth, development, and advancement of our people. In 2024, over 85% of our in-restaurant leadership roles were filled through internal promotions, which remains a critical component to our staffing strategy. To continually attract and hire external talent, we remain focused on creating a best-in-class job seeker and General Manager hiring experience that prioritizes speed, but that also aims to create a transparent process; an experience that identifies shift-specific needs and elevates our talent bar for quality-of-hire. We have seen early success with our new virtual hiring assistant "Ava Cado", almost doubling our application flow. With Ava Cado, approximately 90% of applications are completed, and restaurants are leveraging automated interview rescheduling, freeing up managers to run great restaurants and serve our guests.

To expand our recruitment marketing efforts we continue developing both new and existing partnerships, such as Transition Overwatch and Recruit Military, which assist transitioning Veterans and their spouses. We also prioritize understanding the hiring needs of our international operations in Canada, the United Kingdom, France, and Germany.

Culture and Inclusivity ("C&I")

Our purpose extends beyond serving nutritious food using real ingredients. We are on a journey to create a global culture where everyone is welcome and feels a genuine sense of belonging, and we believe this is achieved through our daily interactions and commitment to model inclusive leadership.

In 2024, Chipotle continued to invest in employee development and training. Our learning programs include inclusive topics and skill-building to provide our leaders with the resources they need to succeed in their current roles and prepare for the future. Our training programs will continue to evolve to respond to a constantly changing world.

Devotion to our culture of inclusivity emanates from our values and the belief that our people make us what we are. We do not see inclusion as a moment, but a movement towards a future where all people can experience success as their best authentic selves. That is why our efforts are not confined to certain roles, departments, identities, or geographies. Driven by a strategy spanning across culture, community, candidate, career, and commerce, we are making meaningful strides towards a future where diversity is understood, embraced, and is a source of our strength.

Maintaining a work environment where all people can succeed as their full authentic self is critical to our success as a business. To deliver meaningful programs that meet the needs of our employees, it is important we understand the dynamic composition of our workforce. As of December 31, 2024, 48.9% of our workforce was male and 49.8% of our workforce was female.

Our most recent Equal Employment Opportunity consolidated report is posted on the Investors page of our website at www.ir.chipotle.com under Corporate Governance – Human Capital Information and additional details about the demographics of our employee population is included in our biennial Sustainability Report and interim Update Report on our website www.chipotle.com/sustainability*.*

We have undertaken a range of activity to promote a culture of inclusion:

• We continue to drive a consistent and structured candidate interview process with interview guides. This ensures top candidates are identified through equitable hiring practices in both internal and external candidate interviews. We also launched an internal job board across multiple communication channels to provide increased visibility and access to internal opportunities.

• In 2024, Chipotle hired a Director of C&I to create and execute a strategy for inclusion, advise across Centers of Excellence, and enhance existing programs with C&I training. This specialized role is also responsible for the continued maturation of our Employee Resource Groups through a new strategy that improves the leader and member experience.

• We have a holistic approach to pay equity to ensure consistent and equitable compensation among our employees. We retain an independent third-party compensation consultant each year to conduct a pay equity analysis of our U.S. and Canadian workforce, including factors of pay (e.g., grade level, tenure in role, most recent promotion) and external market conditions (e.g., geographic location), to ensure equitable treatment among our employees. In 2024, our review included 99% of our U.S. and Canadian employee population, excluding only approximately 50 of our most senior management employees. The analysis identified small, isolated pay gaps for certain segments of the population, and we subsequently made pay adjustments to close those gaps. Since there are not many common roles among our 50 most senior executives, we consider both internal equity by level, as well as individualized market data, to help ensure we maintain pay equity among this group.

Talent Management

We are committed to cultivating a high-performing workforce through a talent development strategy that prioritizes attracting, developing, and retaining exceptional talent at every level of the organization. In 2024, we promoted over 23,000 employees. Importantly, amongst our Field Leadership roles (Field Leaders, Team Directors, Regional Directors of Operations, and Regional Vice Presidents), the internal promotion rate was above 80%.

Our robust hiring, onboarding, and training programs ensure our newly hired and recently promoted employees are set up for success and are aligned with Chipotle's values and goals. We deployed a variety of critical programming ensuring leadership development where most needed. Some notable highlights include:

• Cultivate University is our leadership training program for new Field Leaders and Team Directors navigating multi-unit management for the first time. Leaders are brought together for a four-day immersive leadership experience designed to bolster leadership skills, while validating and grounding attendees in the operational skills necessary to succeed. In 2024, we had 129 leaders complete the program.

• We introduced additional required restaurant leader training at all levels in 2024, building skills around accountability, coaching, feedback, delegation, and resolving conflict. The courses are designed to align with the leadership skills necessary to excel at each level of restaurant management.

• We formalized our Field Leader in Training materials and have seen cohorts launch throughout the business, ensuring that Managers interested in promotion are getting the development they need to take on the next role.

• Leadership Evolution and Development, our leadership development program, is designed to prepare a cross-functional cohort of mid-level managers for the future of work and leadership. During the 6-month program, participants focus on the capabilities of leading oneself, others, and the business with topics designed to stretch capabilities and improve decision-making skills.

In addition, to ensure leadership continuity, we maintain a robust succession planning process, focusing on critical roles across the company. In 2024, we identified successors for 72% of key positions and continued to develop individualized development plans tailored to prepare successors for readiness. Due to Chipotle's growth, we are excited about two newly created regions and three promotions into Regional Director of Operations and Regional Vice President roles, highlighting additional growth and development for our field teams.

Total Rewards

The financial, physical, and mental well being of our employees remains our top priority. We believe we have compelling compensation packages and incentive programs, and a robust suite of benefit offerings that enable us to engage current team members and attract new team members. In 2024, we conducted an Employee Value Proposition survey which was intended to help us understand what employees appreciate in Chipotle as an employer, what needs improvement and what drives value for our employees. We have gathered valuable insights that will help us continue to improve the employee experience and attract and retain the best talent in the industry. Other areas of Total Rewards that help support our employees include:

• We have made substantial investments in our compensation packages, including competitive wages and industry leading incentive programs, such as our annual and quarterly bonus programs.

• We offer a Debt-Free Degree program that provides Chipotle employees' access to nearly 100 degrees at 10 universities, completely tuition free.

• We support Career Certificates, which further enhances our Tuition Assistance benefits by providing on-demand certificate programs to help Chipotle team members advance their careers in as little as eight weeks.

• We offer a student loan payment matching programs via our 401(k) retirement program. This, in addition to a credit optimization service, has helped to bolster our employees' financial well-being.

• We also offer personalized mental health assistance to all Chipotle employees and their family members with support available 24/7 via in-person, phone, or virtual visits with a licensed counselor.

• Starting in 2025, we are expanding our mental health benefits by offering free access to a mental health app to all U.S. employees.

Employee Listening

We value feedback; both positive sentiments and constructive comments help us improve our organization and culture. Many of our best ideas come from Chipotle employees and we use various communication channels to maintain awareness and responsiveness to questions, concerns, and ideas across our workforce. This includes direct daily engagement through meetings with General Managers, lunch and learns, and other one-on-one interactions.

Employees are encouraged to ask questions, voice concerns directly or anonymously report potential violations of Chipotle's Code of Ethics through our Respectful Workplace hotline. Employees also can raise concerns using other mechanisms, including communication with their managers or human resources business partners. We actively encourage our employees to report any issues or concerns without fear of reprisal, intimidation, or harassment.

We also respond to employee issues quickly via our Employee Service Center which is available seven days a week to resolve employee questions about things like restaurant health and safety, compliance, benefits, payroll, etc.

We are eager to improve our employee engagement efforts and build even stronger feedback mechanisms to ensure our employees feel valued, heard and respected.

Government Regulation and Environmental Matters

We are subject to various federal, state and local laws and regulations that govern aspects of our business operations. While costs associated with compliance with laws and regulations have increased as the number and scope of regulations have increased, the total costs incurred have not had, and are not expected to have, a material effect on our capital expenditures, results of operations or competitive position. See “Risk Factors” in Item 1A for discussion of risks relating to federal, state, local and international laws and regulations applicable to our business.

Seasonality

Seasonal factors influencing our business are described under the heading “Quarterly Financial Data/Seasonality” in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Competition

The fast-casual, quick-service, and casual dining segments of the restaurant industry are highly competitive with respect to, among other things, taste, price, food quality and presentation, service, location, convenience, brand reputation, and cleanliness and ambience of each restaurant. Our competition includes a variety of restaurants in each of these segments, including locally-owned restaurants, as well as national and regional chains. Competition from food delivery services, which offer meals from a wide variety of restaurants, also has increased in recent years and is expected to continue to increase. Many of our competitors also offer dine-in, carry-out, online, catering, and delivery services. Among our main competitors are restaurant formats that claim to serve higher quality ingredients without artificial flavors, colors and preservatives, and that serve food quickly and at a reasonable price.

Our Intellectual Property and Trademarks

“Chipotle,” “Chipotle Mexican Grill,” “Food with Integrity,” “Responsibly Raised,” “Chipotle Rewards,” and a number of other marks and related designs and logos are U.S. registered trademarks of Chipotle. We have filed trademark applications for a number of additional marks in the U.S. as well. In addition to our U.S. registrations, we have registered trademarks for “Chipotle” and a number of other marks in Canada, the European Union, the Middle East and various other countries, and have filed trademark applications for “Chipotle Mexican Grill,” “Chipotle” and a number of other marks in additional countries. We also believe that the design of our restaurants is our proprietary trade dress and have registered elements of our restaurant design for trade dress protection in the U.S. as well.

From time to time, we have taken action against other restaurants that we believe are misappropriating our trademarks, restaurant designs or advertising. Although our policy is to protect and defend vigorously our rights to our intellectual property, we may not be able to adequately protect our intellectual property, which could harm the value of our brand and adversely affect our business.

Available Information

We maintain a website at www.chipotle.com, including an investor relations section at ir.chipotle.com, on which we routinely post important information, such as webcasts of quarterly earnings calls and other investor events in which we participate or host, and any related materials. Our Code of Ethics and our Supplier Code of Conduct also are available in this section of our website. You may access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, as well as other reports relating to us that are filed with or furnished to the SEC, free of charge in the investor relations section of our website as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The SEC also maintains a website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

The contents of the websites mentioned above and elsewhere in this report are not incorporated into and should not be considered a part of this report. The references to the URLs for these websites are intended to be inactive textual references only.