Chipotle Q3 earnings beat expectations as price hikes boost revenue

Chipotle (CMG) posted third quarter 2022 earnings results Tuesday after market close that slightly beat market expectations.

Here’s what the California-based company reported, compared to Wall Street’s expectations, according to Bloomberg consensus estimates:

  • Income: $2.2 billion versus $2.24 billion expected

  • Adj. earnings per share (EPS): $9.51 versus $9.23 expected

  • Same-store sales: 7.6% versus 7.38% expected

The third quarter that ended on September 30, 2022, proved that customers are willing to pay higher prices, sending shares of the company higher after-hours trading. Total revenue came in at $2.2 billion, 13.7% higher compared to the third quarter of 2021.

Back in August Chipotle raised menu prices 4%. This was the third time in the last 15 months.

“Our performance in the third quarter confirms our brand and value proposition remain strong, even during a challenging economic environment … with consumer discretionary spending tightening, we are focused on running great restaurants and delivering excellent customer and employee experiences,” Brian Niccol, Chipotle Chairman and CEO noted in the report.

“We serve pretty much all income groups,” he told Yahoo Finance’s All Markets Summit. “We’re fortunate that we’re positioned the way we are with our commitment to food with integrity.”

With customers returning to in-person dining, in-restaurant sales increased by 22.1%, but digital sales also got a rise. Those sales alone represented 37.2% of food and beverage revenue. The use of delivery services, for which the company uses third parties, saw a drop — 0.8%, compared to 1.0 percent this quarter in 2021.

In 2022 so far, the cost of labor is up 25.1%, while food and beverage costs are up 29.8%. In particular, the company reported higher costs for dairy, packaging, tortillas and avocados this past quarter.

In the quarter, Chipotle opened 43 new restaurants with 38 locations including a drive-thru, which the company calls Chipotlanes. For 2022 overall, management expects between 235 to 250 new restaurant openings (including 10 to 15 relocations to add a Chipotlane), assuming “construction, permit and material supply delays don’t worsen.” For 2023, management aims to open 255 to 285 new restaurants.

For the overall year, management anticipates the momentum will continue with fourth-quarter same-store sales to grow mid- to high-single digits and estimated underlying effective full year tax rate between 25% and 27%, but may vary depending on discrete items .

Following the results, Morningstar analyst Sean Dunlop told Yahoo Finance, the company is “certainly recession resistant,” adding that in this environment consumers “might trade out of higher price full-service menus” and “trade down to fast casual or QSR-plus “which he calls a “niche” that Chipotle sits in. Dunlop adds that traffic and average check combined is “probably about flat.”

“There’s sort of two levers there, one you’re seeing a return to, sort of, downtown-urban markets, which means you’re seeing a lot more single entree orders and that’s going to pull your average check down. The good news is that means that traffic may continue to be positive in terms of total transaction count, so net-net, the consumer continues bear it [higher menu prices],” Dunlop said.

Year-to-date shares of Chipotle are down 11.2%.

HOUSTON, TEXAS – JUNE 09: Employees speak together at a Chipotle Mexican Grill on June 09, 2021 in Houston, Texas. Menu prices at the Chipotle Mexican Grill have risen by roughly 4% to cover the costs of raising its’ minimum wage to $15 an hour for employees. The restaurant industry has been boosting wages in the hopes of attracting workers during a labor crunch. (Photo by Brandon Bell/Getty Images)

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at

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