UPDATE 2-Chipotle sales beat expectations on new items, digital ordering

Hilary Russ

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NEW YORK, Oct 22 (Reuters) - Chipotle Mexican Grill Inc reported higher-than-expected quarterly sales on Tuesday, boosted by new menu items, healthier meals and expanded drive-thru and delivery options.

Comparable sales at stores open for at least 13 months rose 11% in the third quarter ended Sept. 30, beating analysts' estimate of 9.27%, according to IBES data from Refinitiv.

Revenue grew 14.6% to $1.4 billion year over year, beating analyst expectations of a 12.7% increase to $1.38 billion.

The California-based Mexican fast-casual chain also reported adjusted earnings per share of $3.82, a full 60 cents above a mean forecast of $3.22, according to Refinitiv data.

Chipotle's share price has nearly doubled since the start of this year, even as the restaurant industry has faced pressure from increasing competition.

The company has continued to recover from its E. Coli bacteria outbreaks that sickened customers in 14 states through early 2016.

Chief Executive Brian Niccol, who was brought on board in February 2018, struck a modest tone about the positive news.

"We are still in the early stages of our journey, and we need to stay focused on our priorities," he said during a call with investors.

"I couldn't be prouder of where we are, but I'm also really excited about where we're going," he said.

Digital sales took off, growing nearly 88% in the quarter and accounting for 18.3% of total sales.

Net income rose to $98.6 million, or $3.47 per share, from $38.2 million, or $1.36 per share, a year earlier.

The company's new loyalty program, launched in March, has enrolled 7 million members, Niccol said.

"We're seeing all the things you'd want to see in a rewards program," he said, adding that it brought in new users and that members have responded positively to incentives. (Reporting by Nivedita Balu in Bengaluru and Hilary Russ in New York; Editing by Richard Chang and Sandra Maler)