The bar is about to be raised -- if not braised -- at Chipotle Mexican Grill (CMG -0.04%). The fast-casual chain reports its second-quarter results shortly after Tuesday's market close. This will be the burrito roller's last easy quarter in terms of year-over-year comps, so it will take more than just healthy growth to impress the market right now.

Chipotle has been a master in navigating through the challenging pandemic waters, explaining why the stock was hitting all-time highs just last week. Expectations are high. Chipotle is going to have to soar higher. 

Chipotle employees sitting at a table in the restaurant.

Image source: Chipotle Mexican Grill.

Beyond the numbers

Chipotle's quarterly results are going to seem spectacular at first glance. Analysts see revenue soaring 41% to hit a chain-record $1.88 billion for the three months ending in June. The increase will be even more dramatic at the other end of the income statement, as analysts see a profit of $6.49 a share trouncing the $0.40 a share it earned a year earlier. 

Investors will need to take these year-over-year advances with a grain of kosher salt. Even Chipotle proved mortal early in the wake of the COVID-19 crisis, and comparable-store sales for the second quarter of last year was really a tale of three months:

  • April 2020 was negative 24.4%
  • May 2020 was negative 7%
  • June 2020 was positive 2%

Chipotle's comps turning positive in June of last year beat out most chains by several months, but it all added up to a 9.8% decline in comps and a 4.8% dip in revenue for the entire quarter. The comparisons will be easy this time around, and it also only helps that Chipotle locations are taking eat-in diners now. A year ago it was limited to just takeout and third-party delivery services.

The chain of more than 2,800 eateries was able to thrive through the pandemic-related changes. It was already beefing up its digital ordering platform and its network of drive-thru Chipotlanes before calamity struck the casual dining industry. It had already installed a second assembly line to handle the surge in mobile orders for pickup and delivery. Being an aspirational brand also helped, as folks craved Chipotle. 

It's good to be the king of fast casual. Chipotle has been able to tackle many of the obstacles tripping up the recovery of its lesser rivals. It was able to raise prices without its customers heading for the door when inflationary pressures hit. It lifted its average hourly wage to $15 at the end of last month, helping it combat the staffing shortage that has stung so much of the industry. 

The new normal isn't treating all restaurant stocks the same, even if the year-over-year comparisons are inflated right now for the good and the bad chains. Chipotle will continue to stand out as a quality investment in this niche, but earning fresh highs will require taking its business to another level now. Comps were already positive in all three of the months of last year's third quarter. Momentum should remain positive as the economy and its dining rooms are now wide open, but it's going to take another market-thumping report and encouraging guidance for the current quarter to keep the queso-dipped chips coming now. Chipotle Mexican Grill has a lot to prove this week.