Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Chipotle's Q3 Results Crush Estimates

By Daniel Sparks - Oct 22, 2019 at 6:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company just posted its seventh consecutive quarter of accelerating comparable-restaurant sales growth.

As if Chipotle Mexican Grill's ( CMG -1.20% ) strong first half of 2019 wasn't already impressive enough, the fast-casual restaurant saw accelerated momentum in its third quarter, with its year-over-year growth rate for both revenue and comparable-restaurant sales coming in higher than in Q2. Furthermore, this was the company's seventh quarter in a row of accelerating comps growth.

Here's a close look at the results -- and how Chipotle crushed analyst forecasts for the period. 

Chipotle online order bag

Chipotle online order bag. Image source: Chipotle Mexican Grill.

Strong growth

Chipotle's third-quarter revenue jumped 14.6% year over year in Q3 -- an acceleration compared with 13.2% growth in Q2. This growth was driven by an 11% increase in comps, or sales at restaurants in operation for at least 13 months. This was also an acceleration from 10% growth in Q2.

Commenting in its third-quarter report on its strong comps growth, management said the key metric "improved due to a nearly 7.5% increase in comparable restaurant transactions and a 3.5% increase in the average check, which includes a benefit from menu price increases that were implemented during 2018."


Q3 2019

Q3 2018



$1.40 billion

$1.23 billion


Adjusted earnings per share




Restaurant-level operating margin



210 basis points

Data source: Chipotle.

The company's performance easily beat analyst estimates. Revenue came in at $1.4 billion -- ahead of an average forecast for $1.38 billion. Adjusted earnings per share jumped 77% year over year to $3.82, beating a consensus estimate for $3.22. 

Helping the company's earnings was a significant boost to its restaurant-level operating margin. The key metric widened to 20.8%, up from 18.7% in the third quarter of 2018 and 16.1% in the third quarter of 2017. 

Importantly, Chipotle said its digital sales jumped 87.9% year over year during the period, putting total digital sales at 18.3% of revenue.

Looking ahead

Given Chipotle's stronger-than-expected comparable-restaurant sales growth in Q3, management lifted its full-year outlook for the metric. Previously, the company was expecting growth in the high single-digit percentage range. But now management expects this growth to be at the top end of this guidance range, presumably somewhere between 8% and 9.9%.

The company also noted that the success it has seen with its drive-thru Chipotlanes has prompted it to adjust its real estate strategy to look for more locations that can accommodate them. As a result, the longer construction timeline associated with Chipotlane-equipped restaurants means some of the company's new restaurant openings will shift from Q4 to early next year. To this end, the company says its total restaurant openings in 2019 will be equal to or slightly below the bottom of its guidance range for 140 to 155 openings.

But management added that it expects to open 150 to 165 restaurants in 2020.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Chipotle Mexican Grill, Inc. Stock Quote
Chipotle Mexican Grill, Inc.
$1,592.10 (-1.20%) $-19.34

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/03/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.