Chipotle Q3 sales miss expectations

Company cites inflation, labor challenges as factors in disappointing results

Chipotle Mexican Grill reported third-quarter sales that missed analysts' expectations on Tuesday, as inflation and labor challenges continued to weigh on the restaurant chain.

The company said revenue rose 13.7% to $2.2 billion in the quarter ended September 30, but that was below the $2.23 billion analysts had expected, according to Refinitiv data.

Comparable restaurant sales, a key metric in the restaurant industry, rose 7.6% in the quarter, also below the 8.2% increase analysts had expected.

Chipotle said the miss was due in part to inflation, which has driven up the cost of food and labor.

The company also said it has been facing labor challenges, including a shortage of workers and higher turnover.

Despite the challenges, Chipotle said it remains optimistic about the future and expects to continue to grow in the long term.

The company said it plans to open 235 to 250 new restaurants in 2023, including 50 to 60 international restaurants.

Chipotle also said it is testing a new loyalty program and a new digital ordering platform.

Analysts said the results were disappointing, but that they remain optimistic about Chipotle's long-term prospects.

"We believe Chipotle is well-positioned to continue to grow in the long term, despite the near-term headwinds," said BTIG analyst Peter Saleh in a note to clients.

"The company has a strong brand, a loyal customer base, and a track record of innovation," Saleh said.