Chipotle stock benefits from sustained sales momentum in the third quarter

Chipotle (CMG) reported better-than-Street expected third-quarter results Wednesday after the market close, as the restaurant chain maintained its sales momentum following slower sales growth since the first quarter of 2025.

Chipotle reported a 2.1% gain in same-store sales, higher than the 1.5% gain Wall Street expected. It posted adjusted earnings of $0.27 per share, slightly lower than the expected $0.29 per share.

“We saw stable to improving share of wallet during the quarter, with broad strength across all age and income groups,” CEO Scott Boatwright told investors on the earnings call.

The stock was up about 7% in after-hours trading. Year to date, shares are down 20%.

The operating margin stood at 13.7%, down from 15.9%. Analysts expected it to be lower due to various marketing efforts, including a buy-one-get-one offer during back-to-school, free double servings of protein during the last week of August and the launch of two limited-time offers: Pollo Asado and Chili Lime Chips.

Sarang Vora, an analyst at Telsey Advisory Group, noted before the results were released that “the persistence of uncertain macroeconomic trends, particularly related to inflation and rising fuel prices, is expected to put some pressure on low-income households.”

During the earnings call, Boatwright said that was not the case.

“We saw low-income cohorts outperform high-income cohorts for the first time this year, with the greatest strength in September, when promotional activity was at its lowest,” he added.

Consumer confidence fell in October as frustration over the higher cost of living weighed on Americans’ views on the economy, according to a University of Michigan survey. The national average gas price also exceeded $4.50 per gallon during the quarter, according to AAA.

Chief Financial Officer Adam Rymer said that to offset inflation, Chipotle raised prices 2.7% in the third quarter.

Rymer said Chipotle would continue to use pricing to offset inflation, but would do so in a “measured and patient” manner, with the intention of absorbing the cost of “temporary or transitory increases in inflation.”

The company also said it will invest in AI-based tools to be tested in 500 restaurants early next year, which will forecast demand to ensure the freshness of its food and then add more drinks to the range, like many others in the industry.

The company reiterated its outlook for the full year.

Chipotle projects single-digit restaurant sales growth for the year as “October trends have softened, consistent with the overall industry,” Rymer said.

It also continues to anticipate opening a total of 350 to 370 new restaurants, including approximately 10 to 15 partner-operated international restaurants.