What happened

Shares of Chipotle Mexican Grill (CMG 0.74%) jumped 10% on Wednesday after the burrito-chain's fourth-quarter profits outpaced Wall Street's expectations.

So what

Chipotle's revenue rose 22% year over year to $2 billion. The gains were fueled by new-store openings and a 15.2% rise in comparable-restaurant sales.

People are eating burritos  outside a restaurant.

Image source: Getty Images.

Moreover, Chipotle was able to offset higher food and labor costs with menu price increases. That helped the company's restaurant-level and companywide operating margins improve to 20.2% and 8.1%, respectively, up from 19.5% and 7.3% in the year-ago quarter.

"We're pretty fortunate with the pricing power that we have," CEO Brian Niccol said during an interview with CNBC.  

All told, Chipotle's adjusted net income soared 60% to $159 million, or $5.58 per share. That was well above the consensus analyst estimate, which had called for per-share earnings of $5.25. 

Now what 

Management warned that same-store sales growth could decelerate in the first quarter, due in part to heightened coronavirus case counts related to the omicron variant. Thus, investors should expect comp growth in the "mid to high single digits range."

Yet Chipotle intends to accelerate its store-opening strategy in the coming years. Thanks to the strong performance of restaurants in smaller towns, the company now sees an opportunity to expand to at least 7,000 locations in North America, up from its prior target of 6,000.

To move toward that goal, Chipotle plans to grow its restaurant base by 8% to 10% per year, with up to 250 openings in 2022.