$CMG · CHIPOTLE MEXICAN GRILL INC
Chipotle filed its 10-Q for Q3 FY2026, reporting total revenue of $3.293B (+9.6% YoY), net income of $339.9M (down from $382.1M), and diluted EPS of $0.27 (down from $0.29). Comparable restaurant sales increased 2.1%, driven by 0.8% transaction growth and a 1.3% average check increase. Operating margin contracted to 13.7% from 15.9% as labor, occupancy, and other operating costs all rose faster than revenue.
- Total revenue rose 9.6% YoY to $3.293B, with comparable restaurant sales up 2.1% (0.8% transactions, 1.3% average check).
- Net income fell 11.1% YoY to $339.9M; diluted EPS declined to $0.27 from $0.29.
- Operating margin compressed to 13.7% from 15.9% a year ago as labor, occupancy, and other operating costs all grew faster than revenue.
- Food, beverage and packaging costs improved 50 bps to 29.5% of revenue, the lone cost-line tailwind.
- Retained earnings collapsed to $154.5M from $619.9M at year-end 2025, driven by $1.46B in share repurchases over nine months.
Extended-hours trading shows shares up 7.37% to $30.90 vs the regular-session close of $28.78, suggesting the market is rewarding the 2.1% comp beat and 9.6% revenue growth despite the margin compression and EPS decline.
Chipotle's margin story is deteriorating: revenue growth remains strong at 9.6%, but every major cost line except food is growing faster than sales, compressing operating margin 220 bps and erasing earnings power.
Chipotle's 2.1% comp growth and 84 new company-owned openings in the quarter show it continues to outpace the broader fast-casual sector on unit expansion, though margin pressure from labor and occupancy inflation mirrors industry-wide headwinds.
Operating margin fell 220 bps YoY as labor costs (+12.0%), occupancy (+13.3%), and other operating costs (+16.7%) all grew well above the 9.6% revenue increase. Interest and other income dropped from $19.8M to $5.2M, a 74% decline that further pressured pre-tax income.