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Chipotle Q3 Earnings Miss Estimates, Revenues Top, Stock Up
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Key Takeaways
Chipotle's Q3 adjusted EPS fell 6.9% to 27 cents, while revenues increased 9.6% year over year to $3.29B.
CMG's Q3 comparable restaurant sales rose 2.1% as transactions increased 0.8% and average checks grew 1.3%.
Chipotle opened 84 company-operated restaurants in Q3 and reaffirmed plans for 350-370 openings in 2026.
Chipotle Mexican Grill, Inc. (CMG - Free Report) reported third-quarter 2026 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. The top line increased year over year, while the bottom line declined.
Following the results, the company’s shares gained approximately 7% in the after-hours trading session. The positive investor sentiment likely reflected growing confidence in Chipotle’s Recipe for Growth strategy, underscored by three consecutive quarters of positive comparable transaction growth. Moreover, continued emphasis on menu and digital innovation, high-efficiency equipment deployment and international expansion bodes well for the company’s growth prospects.
CMG's Q3 Earnings & Revenue Discussion
For the quarter under review, CMG reported adjusted earnings per share (EPS) of 27 cents, missing the Zacks Consensus Estimate of 29 cents by 6.9%. The bottom line declined 6.9% from 29 cents reported in the year-ago quarter.
Chipotle Mexican Grill, Inc. Price, Consensus and EPS Surprise
Quarterly revenues of $3.293 billion surpassed the consensus mark of $3.288 billion by 0.2%. The top line rose 9.6% on a year-over-year basis, primarily driven by new restaurant openings and comparable restaurant sales growth.
Comparable restaurant sales increased 2.1% compared with 0.3% growth reported in the prior-year quarter. Comps benefited from a 0.8% increase in transactions and a 1.3% rise in average checks.
During the third quarter, digital sales contributed 38.8% to total food and beverage revenues compared with 36.7% in the prior-year period.
CMG's Costs, Operating Highlights & Net Income
In the third quarter of 2026, food, beverage and packaging costs, as a percentage of revenues, came in at 29.5%, compared with 30% in the prior-year quarter. The improvement was driven by menu pricing and tariff relief, partially offset by inflation in beef and freight costs.
Labor costs represented 25.7% of revenues, up from 25.2% in the year-ago quarter. The increase reflected wage inflation, with higher labor usage supporting promotional activities and insurance-related expenses.
Other operating costs increased to 16% of revenues from 15% a year ago, primarily due to higher marketing expenses, delivery mix and inflation across utilities and maintenance.
Restaurant-level operating margin reached 23.3%, down from 24.5% in the prior-year quarter, reflecting increased operating expenses. Operating margin in the quarter declined 220 basis points year over year to 13.7%. We predicted the metric to be 14%.
Adjusted net income amounted to $344.6 million, compared with $389.9 million in the year-ago quarter. Our estimate for the metric was $370.3 million.
CMG's Balance Sheet
As of Sept. 30, 2026, the company reported cash and cash equivalents of $634.2 million, compared with $350.5 million as of Dec. 31, 2025.
Inventory totaled $48.9 million compared with $49.5 million as of Dec. 31, 2025.
Chipotle ended the quarter with approximately $1 billion in cash, restricted cash and investments, with no debt. Year-to-date share repurchases totaled $1.4 billion, with approximately $1.6 billion remaining under authorization.
Chipotle's Restaurant Openings
Strength in new restaurant openings aided the company's performance in the third quarter. Chipotle opened 84 company-operated restaurants, including 53 featuring a Chipotlane. The company also opened five partner-operated restaurants internationally.
During the quarter, Chipotle expanded into Mexico, Saudi Arabia and South Korea, bringing its global presence to 11 countries. Management highlighted strong initial customer demand across these markets.
The company also reached its 1,500th Chipotlane milestone. Management emphasized that Chipotlanes support higher digital sales, convenience and stronger restaurant-level returns.
Chipotle's 2026 & 2027 Outlook
For 2026, management continues to anticipate comparable restaurant sales growth in the low-single-digit range. It expects 350-370 new restaurant openings, including 10-15 international partner-operated restaurants. Around 80% of new company-owned restaurants are expected to feature a Chipotlane.
The company anticipates an underlying effective tax rate between 24% and 26% for 2026. For the fourth quarter, management expects comparable sales growth of approximately 2%, with restaurant-level operating margins slightly below 22%.
For 2027, Chipotle expects to open 340-360 company-operated restaurants in the United States and Canada, alongside approximately 15-25 company-owned and partner-operated restaurants outside these markets.
Management also plans to begin expanding catering nationally in the first quarter of 2027, supported by continued menu innovation and digital initiatives.
CMG’s Zacks Rank
Chipotle currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector:
Five Below, Inc. (FIVE - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 68.3%, on average. FIVE stock has gained 24.5% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Five Below’s 2026 sales and EPS indicates growth of 20.1% and 57.6%, respectively, from the year-ago period’s levels.
Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) currently flaunts a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 228.6%, on average. CBRL stock has surged 179% year to date.
The Zacks Consensus Estimate for Cracker Barrel's fiscal 2027 sales and EPS indicates a year-over-year rise of 1.5% and 95%, respectively, from the prior-year levels.
FIGS, Inc. (FIGS - Free Report) has a Zacks Rank #2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 201.8%, on average. FIGS stock has jumped 81.9% year to date.
The Zacks Consensus Estimate for FIGS’ 2026 sales and EPS indicates growth of 19.8% and 89.5%, respectively, from the prior-year levels.
View the Zacks #1 Rank List
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Chipotle Q3 Earnings Miss Estimates, Revenues Top, Stock Up
Key Takeaways
Chipotle Mexican Grill, Inc. (CMG - Free Report) reported third-quarter 2026 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. The top line increased year over year, while the bottom line declined.
Following the results, the company’s shares gained approximately 7% in the after-hours trading session. The positive investor sentiment likely reflected growing confidence in Chipotle’s Recipe for Growth strategy, underscored by three consecutive quarters of positive comparable transaction growth. Moreover, continued emphasis on menu and digital innovation, high-efficiency equipment deployment and international expansion bodes well for the company’s growth prospects.
CMG's Q3 Earnings & Revenue Discussion
For the quarter under review, CMG reported adjusted earnings per share (EPS) of 27 cents, missing the Zacks Consensus Estimate of 29 cents by 6.9%. The bottom line declined 6.9% from 29 cents reported in the year-ago quarter.
Chipotle Mexican Grill, Inc. Price, Consensus and EPS Surprise
Chipotle Mexican Grill, Inc. price-consensus-eps-surprise-chart | Chipotle Mexican Grill, Inc. Quote
Quarterly revenues of $3.293 billion surpassed the consensus mark of $3.288 billion by 0.2%. The top line rose 9.6% on a year-over-year basis, primarily driven by new restaurant openings and comparable restaurant sales growth.
Comparable restaurant sales increased 2.1% compared with 0.3% growth reported in the prior-year quarter. Comps benefited from a 0.8% increase in transactions and a 1.3% rise in average checks.
During the third quarter, digital sales contributed 38.8% to total food and beverage revenues compared with 36.7% in the prior-year period.
CMG's Costs, Operating Highlights & Net Income
In the third quarter of 2026, food, beverage and packaging costs, as a percentage of revenues, came in at 29.5%, compared with 30% in the prior-year quarter. The improvement was driven by menu pricing and tariff relief, partially offset by inflation in beef and freight costs.
Labor costs represented 25.7% of revenues, up from 25.2% in the year-ago quarter. The increase reflected wage inflation, with higher labor usage supporting promotional activities and insurance-related expenses.
Other operating costs increased to 16% of revenues from 15% a year ago, primarily due to higher marketing expenses, delivery mix and inflation across utilities and maintenance.
Restaurant-level operating margin reached 23.3%, down from 24.5% in the prior-year quarter, reflecting increased operating expenses. Operating margin in the quarter declined 220 basis points year over year to 13.7%. We predicted the metric to be 14%.
Adjusted net income amounted to $344.6 million, compared with $389.9 million in the year-ago quarter. Our estimate for the metric was $370.3 million.
CMG's Balance Sheet
As of Sept. 30, 2026, the company reported cash and cash equivalents of $634.2 million, compared with $350.5 million as of Dec. 31, 2025.
Inventory totaled $48.9 million compared with $49.5 million as of Dec. 31, 2025.
Chipotle ended the quarter with approximately $1 billion in cash, restricted cash and investments, with no debt. Year-to-date share repurchases totaled $1.4 billion, with approximately $1.6 billion remaining under authorization.
Chipotle's Restaurant Openings
Strength in new restaurant openings aided the company's performance in the third quarter. Chipotle opened 84 company-operated restaurants, including 53 featuring a Chipotlane. The company also opened five partner-operated restaurants internationally.
During the quarter, Chipotle expanded into Mexico, Saudi Arabia and South Korea, bringing its global presence to 11 countries. Management highlighted strong initial customer demand across these markets.
The company also reached its 1,500th Chipotlane milestone. Management emphasized that Chipotlanes support higher digital sales, convenience and stronger restaurant-level returns.
Chipotle's 2026 & 2027 Outlook
For 2026, management continues to anticipate comparable restaurant sales growth in the low-single-digit range. It expects 350-370 new restaurant openings, including 10-15 international partner-operated restaurants. Around 80% of new company-owned restaurants are expected to feature a Chipotlane.
The company anticipates an underlying effective tax rate between 24% and 26% for 2026. For the fourth quarter, management expects comparable sales growth of approximately 2%, with restaurant-level operating margins slightly below 22%.
For 2027, Chipotle expects to open 340-360 company-operated restaurants in the United States and Canada, alongside approximately 15-25 company-owned and partner-operated restaurants outside these markets.
Management also plans to begin expanding catering nationally in the first quarter of 2027, supported by continued menu innovation and digital initiatives.
CMG’s Zacks Rank
Chipotle currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Here are some better-ranked stocks from the Zacks Retail-Wholesale sector:
Five Below, Inc. (FIVE - Free Report) presently sports a Zacks Rank #1 (Strong Buy). The company delivered a trailing four-quarter earnings surprise of 68.3%, on average. FIVE stock has gained 24.5% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Five Below’s 2026 sales and EPS indicates growth of 20.1% and 57.6%, respectively, from the year-ago period’s levels.
Cracker Barrel Old Country Store, Inc. (CBRL - Free Report) currently flaunts a Zacks Rank #1. The company delivered a trailing four-quarter earnings surprise of 228.6%, on average. CBRL stock has surged 179% year to date.
The Zacks Consensus Estimate for Cracker Barrel's fiscal 2027 sales and EPS indicates a year-over-year rise of 1.5% and 95%, respectively, from the prior-year levels.
FIGS, Inc. (FIGS - Free Report) has a Zacks Rank #2 (Buy) at present. The company delivered a trailing four-quarter earnings surprise of 201.8%, on average. FIGS stock has jumped 81.9% year to date.
The Zacks Consensus Estimate for FIGS’ 2026 sales and EPS indicates growth of 19.8% and 89.5%, respectively, from the prior-year levels.