Chipotle Misses Profit Estimates as Margins Shrink, Though Same-Store Sales Rise Again

Chipotle Mexican Grill reported mixed third-quarter results on Wednesday, with profit that trailed analyst expectations even as sales at established restaurants grew for the third consecutive quarter.

Adjusted earnings came to 27 cents per share, below the 29 cents analysts surveyed by LSEG had predicted. Revenue of $3.29 billion matched the consensus forecast.

Net income for the fiscal third quarter was $339.9 million, or 27 cents per share. That compares with $382.1 million, or 29 cents per share, in the same period a year earlier. Excluding restaurant asset impairment charges and stock-based compensation, the company still earned 27 cents per share.

Profitability at the restaurant level weakened. Chipotle's restaurant-level operating margin slipped to 23.3% from 24.5% a year ago.

Net sales climbed 9.6% to $3.29 billion, driven largely by the chain's newly opened restaurants. During the quarter, Chipotle opened 84 company-owned locations along with five international restaurants run by licensees.

The period was not without disruption. In the second half of July, the company said it noticed sales softening as customers grew wary of eating raw lettuce because of cyclospora, although Chipotle's own supply was never connected to an outbreak. In August, the chain disclosed that it had temporarily removed jalapenos from its Minnesota restaurants after learning that its supply was potentially linked to a salmonella outbreak.

Even so, Chipotle posted same-store sales growth for a third straight quarter, putting last year's traffic troubles further behind it. Sales at restaurants open at least 13 months rose 2.1%, helped by a 1.3% increase in average check.

For the full year, the company reiterated its earlier forecast that same-store sales will grow by a low single digit percentage. Looking to 2027, Chipotle expects to open between 340 and 360 new company-owned restaurants in the U.S. and Canada, plus roughly 15 to 25 international locations.