Chipotle (CMG) is devouring expectations, even as the restaurant industry struggles with cautious consumers.

On Wednesday, after the market close, the burrito chain reported earnings that beat Wall Street's estimates across the board, including on revenue, earnings, and same-store sales.

Shares rose 3.8% in Thursday's premarket trade, having jumped almost 14% in the immediate wake of the results. The give back in the stock price reflects some concern on slowing same-store sales trends and price resistance in California expressed on the earnings call, analysts pointed out.

But the quarter still rose above the general malaise seen elsewhere in the fast food industry at the moment.

Revenue jumped 18.2% year over year to $2.97 billion, versus expectations of $2.94 billion. Adjusted earnings per share came in at $0.34, compared to an estimate of $0.32.

Same-store sales jumped 11.1% year over year, versus the 9.23% Wall Street anticipated. In Q1, same-store sales were up 7%.

CEO Brian Niccol called the quarter "outstanding," thanks to "successful brand marketing" alongside the return of the popular Chicken al Pastor. The company plans to bring back another limited-time offering — smoked brisket — this fall, which could get new customers in the door.

Foot traffic jumped 8% in the quarter, more than the 6.3% expected, with growth across all income cohorts.

While some chains are pushing out bundle deals, Niccol said the company is not going to lean into promotional pricing.

"Obviously we've got to let other people play how they wanna play; we're going to play out offense throughout this whole process," he added.

Prior to the report, UBS analyst Dennis Geiger called the company "one of the best positioned concepts to sustain sales momentum in a tough macro given customer brand affinity and a solid value for the money proposition."

But choosier customers and value meals from fast food players like McDonald's (MCD) could pose a threat, wrote Wedbush analyst Nick Setyan in a client note.

"On the other hand, we'd rather err on the side of caution and view quick-service restaurant's aggressiveness as a near-term (even if on the margin) headwind at Chipotle, Wingstop, and Shake Shack," he wrote in a note to clients.

This quarter, some on Wall Street had their eyes on portion sizes at Chipotle, like Wells Fargo analyst Zachary Fadem, who tracked the portion size at eight Chipotle locations in New York City and ordered the same burrito bowl 75 times.

The company was able to ride out the wave. On the call, Niccol said it is always Chipotle's intention to provide "correct and generous" portion sizes, a key value for the brand.

He said 90% of the stores were executing sizes properly, while 10% were "outliers" that were re-coached to ensure "the right standards."

With foot traffic up despite this distraction, CFO Jack Hartung said, "We do have pricing power."

Menu prices for the quarter were up 3% year over year, but there are no plans to raise prices for the rest of 2024.

The team will be closely watching how inflation and the state of the consumer change in the next few months, but said it is typically the last one to get hit in times of economic uncertainty and the first one for consumers to return to.

Bernstein analyst Danilo Gargiulo, who has an Outperform rating and price target of $80 on the stock, wrote that there are more levers the fast-casual restaurant could pull to keep the flame burning long term.

They include adding late night or breakfast hours, revamping its loyalty program, and leaning into its Gen Z fans as the demographic increasingly becomes household decision-makers.

In June, the company conducted its first 50-for-1 stock split. Shares have since fallen nearly 18% in the last month.

Here's what Chipotle posted in Q2 2024, compared to Bloomberg consensus data:

• Revenue: $2.97 billion versus $2.94 billion

• Adjusted earnings per share: $0.34 versus $0.32

• Same-store sales growth: 11.1% versus 9.23%

In June, sales growth came back down to 6%, driven by positive foot traffic, with expectations for it to trend the same throughout the summer and early days of Q3.

For 2024, the company expects sales growth of mid- to high-single digits for the full year, which was up from the previous guidance of mid-single-digit growth set in Q4 of last fiscal year.

Chipotle ended Q2 with 3,530 stores, slightly less than the 3,540 locations anticipated. In Q2, Chipotle opened 52 new restaurants, with 46 locations featuring its drive-through Chipotlane. This year, it expects to open 285 to 315 new locations, with more than 80% of them having the drive-through concept. Long term, it plans to operate 7,000 restaurants in North America.

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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