Chipotle Mexican Grill, Inc. (NYSE:CMG) has released its third-quarter 2023 results, surpassing both earnings and revenue expectations. The company saw growth in both its top and bottom lines compared to the previous year, with earnings beating the Zacks Consensus Estimate for the third consecutive quarter. Following the earnings announcement, the company’s shares rose by 3.8% during after-hours trading on October 26.
In Q3, Chipotle reported adjusted earnings per share (EPS) of $11.36, exceeding the Zacks Consensus Estimate of $10.46. This represents a 19.5% improvement compared to the same quarter in the previous year.
Revenues for the quarter reached $2,471.9 million, surpassing the consensus estimate of $2,469 million. The top line increased by 11.3% year-over-year, driven by strong comparable restaurant sales growth and the opening of new restaurants. Chipotle opened 62 new restaurants during the quarter, including 54 locations with a Chipotlane.
Digital sales accounted for 36.6% of total food and beverage revenues.
Comparable restaurant sales grew by 5% year over year in Q3, compared to 7.4% in the previous quarter. The cost of food, beverages, and packaging as a percentage of revenues decreased to 29.7%, down 10 basis points from the previous year. The restaurant-level operating margin reached 26.3% during the quarter, up from 25.3% a year ago, primarily due to sales leverage.
Adjusted net income for the quarter was $314.3 million, an 18.2% increase from the prior year.
As of September 30, 2023, the company reported cash and cash equivalents of $602.3 million, compared to $504.9 million as of June 30, 2023. Inventory totaled $40.2 million, up from $36 million as of June 30, 2023. Goodwill as a percentage of total assets reached 0.3% by the end of the quarter.
In the third quarter, CMG repurchased $226.3 million worth of stock at an average price of $1,913.98.
Looking ahead, for the fourth quarter of 2023, management expects comparable restaurant sales growth in the mid to high-single-digit range. The company anticipates opening 255-285 new restaurants in 2023 and expects a tax rate of 25-27% for the year. For 2024, it forecasts 285-315 restaurant openings.
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