Key Highlights

● Chipotle's comparable sales grew faster than expected.

● Total revenue also increased during the quarter.

● Earnings per share and restaurant margins both fell.

● The company kept its full-year outlook unchanged.

Chipotle Mexican Grill shares climbed in extended trading on Wednesday, October 28, after the burrito chain's same-store sales topped Wall Street estimates.

Chipotle Mexican Grill (NYSE:CMG) was one of the brighter spots among S&P 500 companies reporting after the closing bell on Wednesday. Shares jumped in extended trading after the fast-casual chain said comparable restaurant sales grew faster than analysts had expected in the third quarter.

Sales Beat the Bar

Comparable sales, which strip out the effect of newly opened restaurants, are the single most closely watched number for restaurant operators. They show whether existing locations are drawing more customers or getting more from each visit, and for Chipotle they have become the clearest gauge of demand.

According to one closing recap, Chipotle's comparable sales rose and came in ahead of consensus forecasts. Total revenue also increased. The quarter was not spotless: earnings per share and restaurant margins fell, the same recap said. The company kept its full-year outlook unchanged.

Investors Look Past the Softer Margins

Investors appeared willing to look past the softer profit figures and focus on the sales beat. With questions about consumer spending in focus across the market, evidence of steady demand appeared to carry weight.

The report capped a busy day for restaurant stocks. Earlier in the regular session, Brinker International (NYSE:EAT), the owner of Chili's, rallied after raising its full-year earnings and revenue guidance, and Wingstop (NASDAQ:WING) climbed after its earnings per share beat estimates even though revenue missed. Wendy's (NASDAQ:WEN) jumped after a report that Trian Fund Management submitted a non-binding proposal to take the company private at $7.35 per share. Not every consumer name had a good night: Sprouts Farmers Market (NASDAQ:SFM) tumbled after its earnings, revenue and same-store sales all missed estimates.

The Broader Session

The S&P 500 finished Wednesday at 7,743.98, up 21.38 points, for a third straight gain. Gains were narrow: an equal-weighted version of the S&P 500 slipped slightly, and trading volume ran below its 20-day average.

The Federal Reserve left its benchmark rate range unchanged in a 10-2 vote, with two officials dissenting in favor of a hike. Oil prices added to the backdrop for consumer spending, with West Texas Intermediate crude settling at $102.78 a barrel after Yemen's Houthis claimed an attack on a Saudi refinery.

What to Watch

The after-hours gain will face its first real test when regular trading opens on Thursday, October 29. Investors will listen for management commentary on traffic trends, menu pricing and the margin pressures flagged in the quarter.

Thursday also brings the advance estimate of third-quarter GDP and September PCE inflation data at 8:30 a.m. ET, both of which will shape the picture of consumer health. Mastercard (NYSE:MA) reports before the open alongside Merck (NYSE:MRK) and Caterpillar (NYSE:CAT). Amazon (NASDAQ:AMZN) reports after the close.