Chipotle Mexican Grill, Inc. (CMG) Cash Flow Statement

The OCF/NI ratio has remained above 1.0 in every quarter, with a notable spike to 2.15 in 2026Q1, suggesting that non-cash charges like D&A and favorable working capital movements are boosting cash generation. However, the ratio dipped to 1.29 in 2025Q4, which may reflect seasonal working capital outflows. Overall, the consistent premium of operating cash flow over net income suggests that reported earnings are well-backed by cash, though investors should monitor any sustained decline in this ratio.

FCF margins have been volatile, with a low of 7.7% in 2025Q4 and a high of 16.2% in 2024Q1, but the latest quarter's 13.8% is above the trailing average. This suggests that Chipotle is still converting revenue into cash effectively, even as growth slows. The dip in 2025Q4 may be attributed to higher capex and working capital needs, but the subsequent recovery in 2026Q1 and Q2 indicates that the underlying cash generation remains intact.

The capex-to-revenue ratio has climbed steadily, indicating that Chipotle is investing more heavily in new units and digital infrastructure. This is consistent with a growth strategy, but it also means that free cash flow is being partially reinvested. The increase in capital intensity may pressure near-term FCF margins, but if these investments yield higher returns, they could support long-term growth. Investors should monitor whether this elevated capex translates into sustained revenue growth.

The volatility in working capital changes suggests that Chipotle's cash flow is influenced by seasonal factors and payment timing. For instance, 2026Q1 saw a large positive working capital change of $196.1M, which boosted operating cash flow, while 2025Q3 and 2024Q3 saw negative changes. This pattern is typical for a restaurant chain with significant receivables and payables. The absence of a clear trend implies that working capital is not a major drag on cash flow, but investors should be aware of quarterly noise.

The company has been aggressively returning capital to shareholders through buybacks, with quarterly repurchases ranging from $27.0M to $742.7M. This deployment strategy suggests confidence in the business, but it also means that Chipotle is using debt or cash reserves to fund buybacks, as cumulative buybacks exceed cumulative FCF. This could strain the balance sheet if cash flows deteriorate. Investors should monitor the sustainability of this buyback pace relative to cash generation.

The cumulative gap between operating cash flow and net income is positive, driven by non-cash charges like D&A and favorable working capital movements. This suggests that Chipotle's earnings are of high quality, with cash flows consistently exceeding reported profits. However, the gap has narrowed in recent quarters as working capital changes have turned negative, which may indicate that the company is investing more in working capital to support growth. This trend warrants monitoring to ensure cash conversion remains strong.