Chipotle Q3 2026: A Six-Quarter EPS Streak Snaps on Margin Squeeze
As seen on the 24/7 Wall St. homepage on October 28, 2026.
Six straight quarters of beating EPS estimates ended here, with earnings missing expectations as operating margin narrowed to 13.7% from 15.9% a year ago. Revenue still edged past estimates on 84 new restaurants and a third consecutive quarter of transaction growth, so the pressure is on costs rather than demand.
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Chipotle's adjusted diluted EPS of $0.27 missed expectations, ending a six-consecutive-quarter run of beating earnings expectations. Revenue of $3.29 billion came in above estimates on 9.7% year-over-year growth, so demand was not the problem.
Costs drove the miss: operating margin narrowed to 13.7% from 15.9% a year earlier, with labor and general and administrative expenses rising, the latter weighed down by stock-based compensation, performance bonuses, and costs tied to the former CEO's departure. Operating income fell 5.28% year over year.
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Not everything moved in the wrong direction. Food, beverage, and packaging costs fell to 29.5% of revenue, helped by menu price increases, tariff relief, and a favorable mix from limited-time offerings. Transaction growth turned positive for a third straight quarter, which CEO Scott Boatwright called evidence that the Recipe for Growth strategy is gaining traction.
Chipotle repurchased $110.0 million of stock in the quarter, leaving $1.6 billion available under its board repurchase authorizations. Management kept its full-year 2026 outlook intact, calling for low single-digit comparable sales growth and 350 to 370 new restaurant openings.
Sources
Mentioned: CMG