Why Chipotle Stock Popped Today
Key Points
Rising digital sales and price hikes are helping Chipotle offset inflation.
The fast-casual leader plans to open as many as 385 new restaurants in 2027.
- 10 stocks we like better than Chipotle Mexican Grill ›
Shares of Chipotle Mexican Grill (NYSE:CMG) climbed more than 8% on Thursday after CEO Scott Boatwright said the restaurant giant's plan to reinvigorate growth was working.
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Prioritizing speed and convenience
Chipotle's revenue rose 9.6% year over year to $3.3 billion in the third quarter.
The burrito baron opened 84 company-owned restaurants and five international partner-operated locations. That brought its total store count to more than 4,200 restaurants as of Sept. 30.
Importantly, sales at Chipotle's existing locations also showed signs of life. Comparable restaurant sales, which measure revenue at locations open for at least 13 full months, grew 2.1%.
Digital sales continue to be a notable growth driver, rising to 38.8% of total food and beverage revenue from 36.7% in the year-ago quarter.
Chipotlanes -- dedicated drive-thru pickup lanes for pre-paid mobile app orders -- were installed at 58 locations during the quarter. Management credited Chipotlanes with helping the company provide a more convenient experience for customers, which, in turn, is boosting sales and profit margins.
Additionally, Chipotle raised menu prices to offset higher beef, freight, and labor costs. Still, the company's restaurant-level operating margin declined to 23.3% from 24.5%.
All told, Chipotle's adjusted net income checked in at $344.6 million, or $0.27 per share.
Plenty of room for further expansion
Looking ahead to 2027, Chipotle plans to open 340 to 360 restaurants in the U.S. and Canada, along with an additional 15 to 25 locations in other international markets.
Management said recent traffic gains suggest Chipotle's new menu items, marketing campaigns, and intensified focus on speed and convenience are resonating with consumers.
"Three consecutive quarters of positive comparable transaction growth demonstrate that our Recipe for Growth strategy is working," CEO Scott Boatwright said.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chipotle Mexican Grill. The Motley Fool recommends the following options: short December 2026 $38 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.
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