Chipotle shares rise 7% after hours as comparable sales grow 2.1%

Chipotle Mexican Grill (CMG) reported adjusted earnings of 27 cents per share for the third quarter, missing the 29-cent consensus estimate compiled by Finnhub. Revenue of $3.29 billion was in line with the $3.32 billion estimate.

Shares rose 6.7% in after-hours trading as of 7:39 p.m. ET, from a regular-session close of $28.75.

The company said in a statement that it opened 84 company-owned restaurants in the quarter ended Sept. 30, 53 of them with a Chipotlane. It also opened five international partner-operated restaurants.

Here's how the company did:

• Revenue: $3.29 billion vs. $3.00 billion a year earlier
• Adjusted EPS: 27 cents vs. 29 cents expected, according to Finnhub
• Net income: $339.9 million vs. $382.1 million a year earlier
• Operating margin: 13.7% vs. 15.9% a year earlier
• Restaurant level operating margin: 23.3% vs. 24.5% a year earlier

Sales growth

Comparable restaurant sales rose 2.1%, including a 1.3% increase in average check and a 0.8% increase in transactions.

The company said digital sales were 38.8% of food and beverage revenue, up from 36.7% a year earlier.

"Three consecutive quarters of positive comparable transaction growth demonstrates that our Recipe for Growth strategy is working," said CEO Scott Boatwright.

Costs and margins

Food, beverage and packaging costs fell to 29.5% of total revenue from 30.0%. The company attributed the decline to menu price increases, tariff relief and favorable limited-time offer mix, partly offset by inflation in beef and freight.

Labor costs rose to 25.7% of total revenue from 25.2%. The company said lower sales volumes, higher employee compensation and increased insurance costs drove the increase.

General and administrative expenses were $185.2 million, compared with $146.7 million a year earlier. Adjusted general and administrative expenses were $183.8 million, against $138.7 million. The company cited stock-based compensation, performance bonuses and outside services related to corporate initiatives.

The effective income tax rate was 25.6%, up from 23.1%, which the company said reflected more nondeductible expenses and smaller tax credits.

2026 and 2027 outlook

The company said it continues to anticipate full-year 2026 comparable restaurant sales growth in the low single digit range. It expects 350 to 370 new restaurant openings, including 10 to 15 international partner-operated restaurants, and an underlying effective tax rate of 24% to 26% before discrete items.

For 2027, the company expects 340 to 360 new company-owned restaurant openings in the U.S. and Canada, and 15 to 25 company-owned and partner-operated restaurants outside those countries.

Share repurchases

In the third quarter Chipotle repurchased $110.0 million of stock at an average price of $34.05 per share. As of Sept. 30, $1.6 billion remained under share repurchase authorizations from its Board of Directors. The company said the authorization may be modified, suspended or discontinued at any time.

The company scheduled a conference call for 4:30 p.m. Eastern time on Oct. 28 to discuss the results and provide a business update for the fourth quarter to date.