A Chipotle restaurant in Colorado Springs. Source: Chipotle

It was hard to imagine Chipotle Mexican Grill (NYSE:CMG) cooking up a quarter more savory and delicious than the last one. After all, the burrito-maker's second period was fueled by summertime traffic, which led to eye-popping growth across the board.

But Chipotle topped itself once again on Monday October 20, 2014 by besting its previous growth rates in terms of sales, comps, and earnings during the third-quarter:

Chipotle's Year-Over-Year Growth







Comparable-restaurant sales



Earnings per share



Still, even as the company turned in what is probably its best performance as a public company, the market shrugged at the prospect of what will likely be slower growth in 2015. Chipotle shares shed about 7% of their value on Tuesday. Sometimes the best just isn't good enough for Mr. Market, who always has his sights set on what's on the horizon.

Nevertheless, Chipotle's stellar results throughout 2014 have to leave long-term shareholders feeling pretty satisfied. The stock has followed suit with strong business results thus far – it's up 571% in 5 years – and there's little reason to believe that trend won't continue.

Chipotle's management team is tossing in all of the right ingredients to have a great-tasting recipe for years – if not decades – to come.

Here are some of the key points this team chose to emphasize during the conference call for investors:

Our business is thriving, posting the same-store sales increase of 19.8% for the quarter and 17% year-to-date. At the same time, traditional fast food companies are struggling to produce positive same-store sales growth at all. The gimmicks that have driven the fast food sectors for years, dollar menus, limited time offers, and merchandizing partnership are not producing results like they used to as consumers simply want better tasty nutritious food at a more compelling experience – not gimmicks.

--Steve Ells, Chairman and Co-CEO

Chipotle's founder took aim at the state of the fast food industry, which has been a race-to-the-bottom in terms of quality and prices for quite some time. Today, Chipotle's contrarian approach is humming along, while outlets like McDonald's – its former owner – are fumbling along.

Our average check in the quarter is up about 8.5%, driven primarily by an effective price increase of about 6.3% ... We are delighted to see that the price increase we had to take after 3 years of absorbing food inflation had little or no effect on the strong customer loyalty we have worked so hard to build.

--Jack R. Hartung, CFO

Chipotle needs to do two things well to earn consistently high returns on its restaurants. First, it must succeed in passing along higher food prices to customers. The quote above from Jack Hartung speaks to this first challenge: Chipotle's restaurants successfully raised prices 6.3% and customers hardly flinched. Perhaps they were too busy debating the merits of carnitas versus chicken to notice, but either way it's a good sign to see the Chipotle brand wielding pricing power.

Second, Chipotle must attract new customers and provide them with an efficient, satisfying experience. Speedy service – known as "throughput" – is key to prevent customers from being deterred by long lines (we've all been there), and this effort is spearheaded by co-CEO Monty Moran. Here's what he had to say about progress in Chipotle's throughput:

During the quarter, throughput remained strong and actually got stronger with an increase of six transactions during the peak lunch hour and six transactions during the peak dinner hour compared to the same time last year.

--Monty Moran, Co-CEO

Fast-moving Chipotle workers helped the company increase throughput by six transactions during peak hours in the latest quarter. Source: Chipotle

Chipotle not only has a game plan for increasing throughput further, but it also has a lot of room to run. According to Co-CEO Ells, the top Chipotle restaurants run 350 transactions per hour, which is three times the average across all of its restaurants.

Looking ahead, throughput will be key since Chipotle will be loath to raise prices again in the near future. However, it doesn't appear that speed will be enhanced by a faster payment method like Apple Pay just yet:

Right now, we don't have imminent plants to roll out Apple Pay support. It's something that we are considering for 2015 ... We are in the process of readying the launch of our new online app in November and when we do reveal that in the middle of next year, our anticipated time, we might include Apple Pay. It's just a little bit too early for us to tell ...

--Steve Ells, Chairman and Co-CEO

Finally, when pressed on whether real estate was getting harder to come by, Moran noted that smaller markets would help balance out any real estate scarcity issues in major cities:

We expect to see some pressure on rents in major markets, but think that we can offset some of that, with a strong supply of new smaller retail strip centers. In many cases, we are able to find developers who are willing to build 2 or 3 tenant strip for our use and believe that there continues to be great opportunities ahead in some of the smaller, more remote markets that are bit underserved, places such as Corpus Christi, Texas or Greenville, North Carolina where we recently opened restaurants.

As a Corpus Christi native, I expect Chipotle's fast casual concept to resonate even in a fiercely competitive Mexican restaurant market. It's hard to beat delicious, high quality food that's prepped and ready-to-go in seconds flat.

It also wouldn't seem to hard-to-replicate, either, but then again no one's even come close to beating Chipotle at its own game thus far. The latest results only reinforce that this restaurant chain is still sizzling, and it looks poised to do so in the years ahead. Long-term investors might want to consider taking a bite if shares continue to retreat.