Chipotle revenue rises 9.6% to $3.3 billion in third quarter

Key Facts

Chipotle Mexican Grill said revenue in the third quarter ended September 30, 2026, rose 9.6% year over year to $3.3 billion, driven mainly by new restaurant openings and, to a lesser extent, comparable sales growth. Chief Executive Scott Boatwright said, "Three consecutive quarters of positive comparable transaction growth show that our growth strategy is working." But revenue expansion did not prevent profitability measures from declining from a year earlier. Diluted earnings per share fell to $0.27 from $0.29, while net income dropped to $339.9 million from $382.1 million.

Comparable sales growth reflected a combination of higher customer spending per visit and more visits, with the average check rising 1.3% and transactions increasing 0.8%. Digital sales rose to 38.8% of total food and beverage revenue, compared with 36.7% in the third quarter of 2025. Boatwright said the "growth" strategy includes menu innovation, developing digital channels, expanding the use of high-efficiency equipment and global expansion. The company opened 84 company-owned restaurants during the quarter, including 53 locations with a "Chipotlane," and opened five restaurants operated by international partners. The company reported second-quarter earnings per share of $0.33 and revenue of $3.35 billion, according to Reuters' comparison with pre-earnings estimates.

Costs pressured margins despite revenue growth. Operating margin fell to 13.7% from 15.9% in the year-earlier quarter, while restaurant operating margin declined to 23.3% from 24.5%. Labor costs rose to 25.7% of revenue from 25.2% a year earlier; the company attributed the increase to lower sales volumes and higher employee wages, benefits and bonuses, as well as restaurant labor and insurance costs. By contrast, food, beverage and packaging costs fell to 29.5% of revenue from 30.0%. The company linked the improvement to the impact of price increases, reduced tariff impacts and a limited-time offer mix, partly offset by beef and freight inflation and increased use of protein.

General and administrative expenses rose to $185.2 million from $146.7 million in the third quarter of 2025. The company said the increase was related to stock-based compensation, performance bonuses and outside services for its initiatives. Before the announcement, analysts had expected earnings of $0.29 per share and revenue of about $3.28 billion. Reuters also noted that second-quarter results were $0.33 per share and $3.35 billion in revenue. Ahead of the results announcement, the stock rose 3.8% to $29.06 in midday trading on October 28, as investors awaited the report after the market close. The stock had closed at $28.41 on October 26 and then at $27.98 on October 27, according to EL7 data.

Before the results announcement, TD Cowen cut its rating on the stock to hold from buy, citing concerns that October sales might not deliver the anticipated turning point in the fourth quarter. Management maintained its 2026 comparable sales growth outlook in the low-single-digit range, while targeting 350 to 370 restaurant openings during the year. For 2027, the company expects to open 340 to 360 company-owned restaurants in the United States and Canada, and about 15 to 25 restaurants owned or operated by partners outside those markets. It said it would hold an investor call on October 28, 2026, at 4:30 p.m. Eastern time to discuss the results and provide an update on the fourth quarter through that date.