Chipotle shares climb after results as third-quarter revenue rises 9.6%

what happened

Shares of Chipotle Mexican Grill (CMG) rose more than 5% overnight, according to Stocktwits. CEO Scott Boatwright called the company a "category leader" and said it still has room to grow despite pressure on consumers.

Third-quarter revenue climbed 9.6% year on year to $3.29 billion, while comparable restaurant sales gained 2.1%. Average customer spending rose 1.3%, and digital orders made up 38.8% of food and beverage revenue. Earnings per share, however, slipped to $0.27 against the $0.29 consensus estimate, per Fiscal.ai. The company opened 84 restaurants and entered Mexico, Saudi Arabia and South Korea.

Boatwright said lower-income customers outperformed higher-income ones for the first time this year. Retail sentiment on Stocktwits turned from bearish to bullish, and message volume rose 350% over the past day.

why it matters

The report suggests demand is stabilizing, which matters for the fast-casual restaurant segment as a whole. The earnings miss, though, shows that revenue growth has not yet fully carried through to profit. The stock is still down about 22% so far this year, so investor reaction will depend on whether the demand recovery looks durable.

market impact

CMG: revenue and demand growth support the stock, while the earnings miss limits gains

• ↔CMG mixed — revenue and demand growth support the stock, while the EPS miss weighs on it

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