Chipotle recorded its third straight quarter of comparable-store sales growth, and its shares rose nearly 9% on Oct. 29, though they remain down more than 15% year to date. Revenue rose nearly 10% to US$3.29 billion, while adjusted EPS fell 7% to US$0.27, broadly in line with analysts' expectation of US$0.29 according to LSEG. Restaurant-level operating margin fell 120 basis points to 23.3% amid wage inflation, higher labor usage and rising prices. The company expects fourth-quarter comparable-store sales growth of 2% or more, plans a 3% price increase in Q4, and intends to add 350 to 370 new restaurants in 2026. The author says margins have not yet stabilized, views the stock as appropriately valued at 23 times 2027 forward P/E estimates, and says he would prefer not to chase the recent rally.
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