Chipotle’s BOGO barrage is paying off

Chipotle’s recruitment of industry veteran Fernando Machado as chief brand officer seems to be paying off so far. Machado, who officially came on board June 1, spent over seven years as chief marketing officer at Restaurant Brands International, where he led award-winning campaigns for Burger King such as the “Moldy Whopper” and “Whopper Detour.”

During the company’s third quarter earnings call Wednesday after market, CEO Scott Boatwright said the company’s marketing on his watch has “connected with consumers in new and culturally relevant ways,” including through its new 100 Creators campaign, launched in August to showcase the first-person perspectives of content creators prepping and seasoning orders in Chipotle restaurants.

Beyond creator content, the company’s new marketing strategy has also focused on sports and entertainment, gaming, and fashion spaces to “meet guests where they are.” During the third quarter, for example, Chipotle worked with Cardi B to launch the Bardi Bowl and introduced the Salish Matter Kid’s Meal to engage with younger customers and families. A unique campaign with the London Vegetable Orchestra shined a spotlight on the company’s 53 real ingredients promise.

“These activations are designed to do more than generate attention,” Boatwright said. “They help us tell the story in fresh ways, broaden our reach and keep the brand top of mind.

“We are supercharging how we communicate our value proposition and connecting what makes Chipotle different with what matters to consumers today.”

Executives said this work has lifted wallet share across income and age cohorts, while lower-income cohorts outperformed higher-income cohorts in the third quarter for the first time this year. Moreover, lower-income consumers’ highest engagement was in September, when promotional activity was slower.

In addition to campaigns like 100 Creators and Salish Matter, Chipotle has also ramped up its limited-time offers, including Pollo Asado and Chili Lime Chips — the first time the chain has introduced two items simultaneously.

Such “supercharging,” however, comes with a price. Promotion-driven traffic increases require a hefty investment and marketing spend is up about 20% year-to-date. Chipotle has offered a steady cadence of buy-one-get-one offers throughout recent quarters to celebrate everything from the FIFA World Cup to tattoos to the U.S. Open tennis tournament.

Chief Financial Officer Adam Rymer said those types of promotions “do more than drive a single day or quarter of sales.”

“They bring in new and lapsed guests into our restaurants, increase frequency among existing guests, and keep Chipotle top of mind,” he said.

Protein LTOs specifically tend to generate “a few hundred basis points of transaction” throughout the promotion.

“We generally sustain part of that lift longer term as many new guests continue to dine with us after the offer ends,” Rymer said. “Our buy-one-get-one activations follow a similar pattern. It is this stickiness that makes these investments so productive over time.”

Boatwright said Chipotle’s mid-3% spend is the right range to create “return-generating opportunities.”

“We think [3%] is what gives us a strong calendar to support a best-in-class LTO platform,” Boatwright said. “There could be opportunities where we want to lean in, where we know there will be a return, so that’s where we’ll spend our dollars.”

That said, these efforts to stimulate traffic and build longer-term customer frequency pressured margins in the third quarter, with restaurant-level operating margins down 120 basis points and company operating margin down about 220 basis points. Executives indicated that, assuming pricing covers inflation, the company needs roughly 4% comparable sales growth to stabilize margins under a 3% inflation scenario.

“We evaluate marketing and promotional investments through a return-focused lens. When we have great ideas that deliver attractive returns, we will lean in as we did this quarter. This discipline gives us the flexibility to respond quickly to shifts in demand while protecting the long-term strength of our economic model,” Rymer said.

Group occasions become a bigger priority

In addition to accelerating its innovation pipeline, Chipotle is also expanding group occasions, including through catering. The channel has been in test but is expected to roll out more broadly in the first quarter of 2027. To support that rollout, Chipotle has been developing bespoke tools to grow the catering business without disrupting its core lunch or dinner business.

Additionally, Family Meals continue to generate a higher mix. Initially introduced in August 2025, the customizable offering designed to serve four-to-six people has since expanded into Canada and is now being supported by an irreverent marketing campaign complete with a “Big Ass Chipotle Bag.”

“This was a fun and distinctive way to connect the brand to culture, drive buzz and showcase value,” Boatwright said. “Early results have shown a step-up of over 30% in Family Meal sales. Together, catering and Chipotle Family Meals represent approximately 3% of sales today. Both remain highly incremental and operationally efficient, giving us another meaningful runway for growth.”

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