Chipotle tops quarterly sales expectations as it continues to attract diners

By Neil J Kanatt and ‌Waylon Cunningham

Oct 28 (Reuters) - ​Chipotle ​Mexican Grill reported better-than-expected comparable sales on Wednesday, as marketing efforts, limited-time menu offerings and higher prices helped drive customers to the burrito ‌chain, sending its shares up about 7% in extended trading.

The company said ⁠higher menu prices cushioned the impact from rising costs, contributing to overall sales. It estimates overall ‌price increases across its menu ‌to be around 2% in 2026.

Chipotle has benefited from demand among health-conscious and younger consumers drawn to protein-rich, less-processed meals such as burrito bowls and salads, as ​well as its limited-time offerings including Chipotle Honey Chicken.

This helped the chain navigate pressured consumer spending as daily expenses rise, while recovering from a multistate ⁠cyclosporiasis outbreak that dented confidence in dining out.

"Broader consumer and industry headwinds may continue, but initiatives across our recipe ​for growth strategy are building and giving us more tools to win in any environment," CEO Scott Boatwright said.

Third-quarter comparable restaurant sales ​rose 2.1%, topping estimates of a 1.4% increase, ‌according to data compiled by LSEG.

Boatwright said traffic returned to growth after an industry slowdown early in October and that Chipotle ⁠is seeing "positive signs" from remodel tests in California, Florida and Texas, particularly at its restaurants that are 20 to 30 years old.

"Chipotle’s renewed momentum in the third quarter reflects the company’s ⁠success in winning over younger customers with promotions and loyalty rewards," eMarketer analyst Rachel Wolff said.

The ​company also expanded into Mexico, Saudi Arabia and South Korea during the quarter, while opening additional restaurants in the UAE and Kuwait, bringing its footprint to 11 countries.

Revenue rose 9.6% to $3.29 ‌billion, in line with expectations. Higher costs for labor, freight and beef weighed on earnings, with adjusted profit of 27 cents ‌per share missing estimates of 29 cents.

Chipotle reaffirmed its low-single-digit annual comparable sales growth forecast.

The ⁠results follow Starbucks' statement that it ‌was not buying Chipotle, following ​reports of a potential deal earlier this month.

(Reporting by Neil J Kanatt in Bengaluru and Waylon Cunningham in New York; Editing by ‌Diti Pujara)

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