Chipotle now has more demand from lower-income diners than higher-income ones

By Bill Peters

The fast-casual chain says menu-price increases helped results. It also notes rising beef costs and 'higher protein usage' as people try to find ways to pack more protein into their diets.

Chipotle reported third-quarter earnings on Wednesday.

Lower-income diners might be dining out less frequently overall, but not at Chipotle Mexican Grill.

Scott Boatwright, the Mexican fast-casual chain's CEO, said on its third-quarter earnings call on Wednesday that over that period, lower-income customers outperformed higher-income ones for the first time this year. The best results on that front, he said, came in September, when promotional deals were actually at their lowest.

"Broader consumer and industry headwinds may continue, but initiatives across our recipe for growth strategy are building and giving us more tools to win in any environment," he said.

Restaurant analysts over recent years have been concerned about the impact of higher costs of living on lower-income-consumer spending. But shares of Chipotle (CMG) jumped 7.6% after hours on Wednesday, as the chain stuck with its expectations for modest sales growth this year despite signs of fast-casual fatigue and an affordability crunch.

The fast-casual Mexican chain on Wednesday said it expects same-store sales - a much-watched measure of sales at older restaurants - to be up "in the low-single-digit range" for 2026, in keeping with the forecast it offered in July.

Items like chili-lime chips and the return of pollo asado helped sales during the third quarter. The company plans to bring smoked brisket back to menus next month, and said other menu additions would be arriving next year.

Chipotle has also tried to take advantage of the ongoing protein craze, and has its own high-protein menu. However, in breaking down costs as a percentage of sales, the company noted rising beef costs and "higher protein usage."

Chipotle said third-quarter revenue increased 9.6% year over year to $3.293 billion. Same-store sales rose 2.1%, while adjusted earnings per share fell 6.9% to 27 cents. The company said menu-price increases helped results.

Analysts polled by FactSet expected Chipotle to report adjusted earnings per share of 29 cents for the third quarter, on revenue of $3.286 billion and a same-store sales increase of 1.5%.

During the quarter, Chipotle opened 84 restaurants, 53 of which included a drive-thru "Chipotlane." The company said those drive-thru lanes "continue to perform well and are helping enhance guest access and convenience, as well as increase new restaurant sales, margins and returns."

Chipotle's stock is down 22.4% so far this year, as the chain tries to stand out among a sea of discounts and promos from sit-down restaurants and fast-food chains. Restaurants have tried to entice customers with value deals after raising prices to cover pandemic-related costs. The chain has also dealt with concerns over this summer's cyclospora outbreak.

The chain's results also arrive after Starbucks (SBUX) said it would not acquire Chipotle, following a report from the Financial Times about the coffee chain's interest in such a move. The prospect of a deal perplexed some analysts.

-Bill Peters

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10-28-26 1826ET