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CMG - Chipotle


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BREAKING NEWS!

 

Chipotle will be starting up a burger chain!!!!!!

 

Better Burger is the name they've trademarked!

 

http://www.cnbc.com/2016/03/30/chipotle-trademarks-better-burger-for-new-food-chain.html

 

A news diversion to point investors away from the fact sales are not recovering.

 

I highlydoubt that this is a new idea. I imagine it's been in the works for months prior to the current scandal and that they're just prepared now to release some of the details.

 

That being said, why you would release this information now when people are still questioning the current stores and sales/lines haven't returned is beyond me. Get your house in order before you worry about the ancillary businesses...

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I'm happy they opened a Chipotle closer to my home in Mississauga last week.

I was there on opening day and there was a steady stream of clients coming in for dinner.

I spoke to the manager and he mentioned they have a location opening up soon in Oakville and a couple more in Toronto in the next few months.

What would make me really happy is if Shake Shack was more reasonably priced and Chipotle acquired them.

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Chipotle adding new fountain drinks which include Coke Life (sweetened with stevia extract and cane sugar instead of corn syrup) and Blue Sky sodas (which is partially owned by Coca-Cola). This is the first time either Coke Life or the Blue Sky brand have been available anywhere in a fountain version, according to Chipotle.

 

http://www.westword.com/restaurants/broadway-and-sixth-avenue-chipotle-selected-as-test-market-for-new-beverage-program-7755729

 

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The BI debate is good.

 

https://www.google.com/trends/explore#q=chipotle%20sick&data-ipsquote-timestamp=7%2F2009%2073m&cmpt=q&tz=Etc%2FGMT%2B4

 

This shows that  "chipotle sick" had been trending higher for a while, which might mean that more people were getting sick at Chipotle (or maybe just more people were eating at Chipotle) even before the outbreaks that began in August 2015. It starts with zero search traffic in July 2009 to 100 in June 2015. Clearly quality control was on the decline before the outbreaks.

 

Edit:

 

Actually if compared with "Taco Bell sick" there doesn't appear to be a trend. "McDonalds sick" also trends up after the recession in 2009. Maybe all of these places were just relaxing their hiring standards after the recession.

 

https://www.google.com/trends/explore#q=chipotle%20sick%2C%20taco%20bell%20sick&data-ipsquote-timestamp=7%2F2009%2073m&cmpt=q&tz=Etc%2FGMT%2B4

 

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The Chipotle's in NYC have been running a campaign where if you buy a $25 giftcard, you get a free burrito on your next visit if you show them the receipt.

 

I imagine that this will pull forward quite a bit of demand and that this quarter's results won't be as bad as lasts. That being said, the stores I frequent (one in midtown, on the Upper East side) still have significantly less traffic than they used to so the results may not last.

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[shadow=red,left][/shadow]

The Chipotle's in NYC have been running a campaign where if you buy a $25 giftcard, you get a free burrito on your next visit if you show them the receipt.

 

I imagine that this will pull forward quite a bit of demand and that this quarter's results won't be as bad as lasts. That being said, the stores I frequent (one in midtown, on the Upper East side) still have significantly less traffic than they used to so the results may not last.

 

dont think that's limited to nyc, I see the offer here in SF

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Business is still booming around a college campus in my area. The Ecoli epidemic was just temporary, but I still saw a fairly large number of students buy food there, line length was/is still the same. Chipotle also gave out online coupons, with a free burrito/burrito bowl and another coupon with free chip and guacamole.

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Over a $1 billion of share buybacks.

 

http://www.bloomberg.com/news/articles/2016-05-11/chipotle-spends-1-billion-on-stock-buybacks-as-recovery-lags

 

I'm seeing steady lineups at the location that I usually go to. Just got a coupon the other day for a buy one get one free burrito.

 

Lots of new locations opening up. This is a great link showing you all the new locations opening soon.

https://jobs.chipotle.com/search-jobs/new%20restaurant/282/1

 

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Their store traffic increases seasonally, so busier stores should be expected from that alone. So anecdotal observations are interesting, but aren't going to help figure out year-over-year comps. The store traffic will come back with time, but the pace at which it occurs is unknowable. I agree with the bull in that debate... because he is me.

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Their store traffic increases seasonally, so busier stores should be expected from that alone. So anecdotal observations are interesting, but aren't going to help figure out year-over-year comps. The store traffic will come back with time, but the pace at which it occurs is unknowable. I agree with the bull in that debate... because he is me.

 

The guy you're replying to periodically posts in this thread to pump up the stock, so I wouldn't take anything he says too seriously.

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Hey all:

 

Here is what I simply don't understand about CMG.

 

Do they have good food?  Well yes, especially for a mega-chain. 

 

Do they have a good business?  Well yes, especially for a mega-chain restaurant.

 

Should they trade for a premium?  Well yes, they probably should....

 

AFTER THE E-COLI SCARE, the stock is now trading for 9X book and 44X earnings?

 

They have about 2,000 locations.  Are they going to DOUBLE the number of locations?  Are they going to double them again in 10 years or so?  That would put them at about 8,000 locations. 

 

Can they expand into custom pizza and maybe Asian?  Most likely yes...but how many custom Asian locations can you have?  100?  500?  1,000?

 

Same goes for custom Pizza...

 

I would hazard that there is a REAL risk that permanent harm has been done to the brand.  Any more problems and I think that will almost be certain.

 

So I think that you've got an inverted risk/reward ratio here.  A good business, yes!  But in my opinion current investors are simply paying too much.  People could hold CMG for 5-6 years and be looking at a price somewhat lower than today's if the P/E ratio contracts....

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I visited a food court for lunch today and didn't see many people at CMG. Lots at the sushi place and Wich Wich and at McD but not too many at CMG. Half the customers were under 18 so how many of them had even heard of the food problems? And it occurred to me that the concept is a little tired. People are interested in new stuff and 1000 calorie burritos is not new. It was five or ten years ago but not now. Maybe CMG could launch bibimbap bowls. I would definitely try that.

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I visited a food court for lunch today and didn't see many people at CMG. Lots at the sushi place and Wich Wich and at McD but not too many at CMG. Half the customers were under 18 so how many of them had even heard of the food problems? And it occurred to me that the concept is a little tired. People are interested in new stuff and 1000 calorie burritos is not new. It was five or ten years ago but not now. Maybe CMG could launch bibimbap bowls. I would definitely try that.

If this were true wouldn't SSS have been declining pre-ecoli? I think it's the Deutsche Bank analyst that keeps repeating this... I'm just not sure what it's based on other than personal taste. A sample set of people eating sandwiches and burgers rather than burritos doesn't seem all that conclusive.

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Their store traffic increases seasonally, so busier stores should be expected from that alone. So anecdotal observations are interesting, but aren't going to help figure out year-over-year comps. The store traffic will come back with time, but the pace at which it occurs is unknowable. I agree with the bull in that debate... because he is me.

 

The guy you're replying to periodically posts in this thread to pump up the stock, so I wouldn't take anything he says too seriously.

 

No need for me to pump up the stock. Besides I'm up $57 per share so far on CMG. If you prefer, we can talk about the Toronto Raptors instead!  ;D

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I visited a food court for lunch today and didn't see many people at CMG. Lots at the sushi place and Wich Wich and at McD but not too many at CMG. Half the customers were under 18 so how many of them had even heard of the food problems? And it occurred to me that the concept is a little tired. People are interested in new stuff and 1000 calorie burritos is not new. It was five or ten years ago but not now. Maybe CMG could launch bibimbap bowls. I would definitely try that.

If this were true wouldn't SSS have been declining pre-ecoli? I think it's the Deutsche Bank analyst that keeps repeating this... I'm just not sure what it's based on other than personal taste. A sample set of people eating sandwiches and burgers rather than burritos doesn't seem all that conclusive.

 

I think the evidence speaks for itself. But don't these chains usually come out with new menu items to create new interest? I haven't visited Chipotle in years but nothing had changed. Exact same menu. That's fine as long as it's working but Chipotle is no longer a new chain. There are now lots of places that provide better and healthier food compared with five or ten years ago (Zoes and Noodles etc, for example) when Chipotle was relatively fresh.

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