Live news: Chipotle tops expectations on strong demand as margins face pressure

Chipotle topped earnings expectations in the second quarter thanks to strong demand, but the burrito chain warned it expects margins to be under pressure for the next couple of quarters as it contends with higher costs.

The company reported transaction growth of more than 8 per cent in the three months to June 30, helping same-store sales to rise 11.1 per cent in the second quarter from a year ago, beating Wall Street’s expectations.

“Growth is coming from all income cohorts,” chief executive Brian Niccol told the Financial Times.

Chipotle earned 34 cents an adjusted share, beating analysts’ forecasts of 32 cents. 

Chief financial officer John Hartung said on a investor call that margins are under pressure from higher costs for dairy, avocados and protein.