Chipotle soared due to improved profit margins.

Chipotle Mexican Grill (NYSE: CMG) surged on Wednesday due to overtime trading in response to strong financial results. The 18.3% increase in total sales was due to an 8.7% increase in existing store transactions and a 2.4% increase in existing store average checks. Existing store sales increased 11.1%, which greatly exceeded the consensus forecast of a 7.0% increase. Digital sales surged to account for 35.3% of total food and beverage sales.

Operating profit surged to 19.7% from 17.2% in the same period last year. The operating profit margin also exceeded the consensus forecast of 16.3%. EPS is $0.32 by consensus, $0.34 compared to $0.25 the previous year.

The restaurant-level profit margin on sales was 28.9%, up 140 bps from the same period last year, which exceeded the consensus forecast of 27.5%. This improvement was mainly due to the leveraging effect on sales, which was partially offset by wage and food inflation.

The cost of food, beverages, and packaging was 29.4% of sales on par with the same period last year. The benefits of last year's menu price increases were partially offset by avocado inflation and, albeit slightly, by an increase in the amount of oil used in frying chips and an increase in beef usage due to the continued success of marketing initiatives for stewed beef barbacoa. The ratio of labor costs to sales fell by 20 basis points to 24.1%.

Chipotle (CMG) opened 52 new stores during the quarter, of which 46 were Chipotrain stores, bringing the total number of stores to 3,479. Chipotle expects to grow between 285 and 315 stores throughout the year.

“The second quarter was an outstanding performance, driven by successful brand marketing, including the revival of Chicken Al Pastor, driven by strong demand for stores. In the second quarter, successful brand marketing, including the revival of chicken al pastor, fueled strong demand for stores, and training focused on throughput came to fruition.

CEO Brian Nicol stated: Chipotle (CMG)'s full-year existing store sales grew from the middle to the latter half of the single-digit range. The company is expected to open 285 to 315 new stores this year, and over 80% will have Chipotren.

The stock price of the company, which is headquartered in Newport Beach, fell 1.47% in the regular session and then rose 13.07% to $58.55 due to overtime trading. Noodles (NDLS), Shake Shack (SHAK), and CAVA Group (CAVA) rose more than 2% in the back field. Yum! Brands (YUM) and McDonald's (MCD) also rose slightly.