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Chipotle’s third-quarter revenue rose 9.6% to $3.3 billion, but profit fell as higher costs and a narrower operating margin offset growing restaurant sales.
The company reported net income of $339.9 million, or 27 cents a diluted share, for the quarter ended September 30, down from $382.1 million, or 29 cents a share, a year earlier.
Comparable restaurant sales increased 2.1%, reflecting a 0.8% rise in transactions and a 1.3% increase in the average check. The check figure is an average spending measure, not a uniform menu-price increase.
Margins narrow despite sales growth
Operating margin declined to 13.7% from 15.9%. Restaurant-level operating margin, a separate measure that excludes costs outside direct restaurant operations, fell to 23.3% from 24.5%.
Labor costs rose to 25.7% of revenue from 25.2%. Chipotle cited employee compensation, wage inflation, performance bonuses, additional restaurant labor and insurance costs among the pressures.
Food, beverage and packaging costs declined to 29.5% of revenue from 30%. The company said menu-price increases, tariff relief and a favorable mix of limited-time offers helped offset inflation in beef and freight and higher protein usage.
New restaurants add to revenue
Chipotle said new restaurant openings were the main driver of the revenue increase, with comparable sales making a smaller contribution. It opened 84 company-owned restaurants during the quarter, including 53 with a Chipotlane drive-through pickup lane, and five international partner-operated restaurants.
Digital sales accounted for 38.8% of food and beverage revenue, compared with 36.7% a year earlier.
Full-year comparable-sales outlook unchanged
Management continued to forecast full-year comparable restaurant sales growth in the low single digits. It expects 350 to 370 new restaurant openings in 2026, including 10 to 15 international partner-operated locations.
The company repurchased $110 million of shares during the quarter. It had $1.6 billion remaining under board share-repurchase authorizations at September 30.
JBizNews Desk | Newport Beach, California
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