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Monday, July 23, 2012

Why u should buy Chipotle Mexican Grill Inc. ( CMG ) on the dip down ?

I'm along term player in CMG , anything under 300 a share i am buying .Chipotle Mexican Grill, Inc. and its subsidiaries (Chipotle) operate restaurants throughout the United States, as well as two restaurants in Toronto, Canada and two in London, England. As of December 31, 2011, Chipotle operated 1,230 restaurants, which includes one ShopHouse Southeast Asian Kitchen. The Company’s restaurants serve a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. The Company manages its operations and restaurants based on six regions that all report into a single segment. As of December 31, 2011, the Company delivered ingredients and other supplies to its restaurants from 22 independently owned and operated regional distribution centers. Chipotle categorizes its restaurants as either end-caps (at the end of a line of retail outlets), in-lines (in a line of retail outlets), free-standing or other i will belooking for the dips down the next 6 - 8 months. CMG has a bright future and cult like guest will keep enjoying CMG food . CMG will need to watch the corn prices the next year or so ,food costs are rising, and fast. Chipotle has temporarily been able to stifle this macro economic set back by raising prices (throughout 2011, thus still showing an impact in 2012's YOY earnings).
In terms of full year inflation, while costs have been relatively stable overall so far this year, the recent extreme weather will likely put pressure on our food costs later in the year and into 2013.

Even Chipotle's management is starting to admit that rising food costs have the potential to be a real problem.However, because of lower same store sales, it's clear that Chipotle realizes it cannot continue to pass these commodity costs off to consumers for much longer.
By not continuing to raise prices in 2012 and try to hedge they food prices on the dips low. If u are looking for the long term this stock will explode to @ least 450 a share by 1 - 2 years from now 75% profit ! sounds yummy to me , buy , buy, buy !!!!
Chipotle Mexican Grill Inc. ( CMG ) has reported second-quarter 2012 earnings of $2.56 per share, comfortably ahead of the Zacks Consensus Estimate of $2.30 as well as the year-earlier earnings of $1.59. The better-than-expected results were driven by double-digit top-line growth and margin expansion.Chipotle was rolled over like one of its signature burritos after delivering a mixed quarterly report. Earnings and margins came in better than expected, but the quick-service eatery chain missed on the top line despite an enviable 8% spike in unit-level comps

Revenues rose 20.9% year over year to $690.9 million in the reported quarter, based on new restaurant openings and higher comparable store sales (comps). However, reported revenue fell below the Zacks Consensus Estimate of $706 million.
Chipotle Mexican Grill, Inc.
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Chipotle Mexican Grill, Inc.

(Public, NYSE:CMG) Watch this stock
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Dow Jones12,674.35-1.16%
S&P 5001,343.41-1.41%
Real-time: 11:10AM EDT
NYSE real-time data -Disclaimer
Currency in USD
Range301.10 - 311.70
52 week271.53 - 442.40
Vol / Avg.880,676.00/947,978.00
Mkt cap14.90B
Div/yield -
Inst. own64%

Quarter Highlights

Comps grew 8.0% during the quarter on the back of higher traffic and menu price increases witnessed last year. Higher menu prices added about 4.6% in the quarter under review. However, comps slipped 470 basis points (bps) sequentially and 200 bps annually.

The restaurant operating margin expanded 340 bps to 29.2%, attributable to a 100-bp cut in labor, 30-bp drop in occupancy costs and 130-bp decrease in other operating costs and 80-bp slip in food, beverage and packaging costs (as a percentage of total revenue).

Total operating margin expanded to 19.4% from 14.7% in the year-ago quarter, benefiting from lower expenses. General and administrative expenses were 6.1% of revenue, down 120 bps year over year, driven by favorable sales leverage, lower employee bonus accruals and lower legal expenses.

Stores Update

During the quarter under review, Chipotle opened 55 restaurants, including first restaurant opening in Paris, France. The company currently operates 1,316 outlets.

Chipotle has remained largely unruffled by the recent economic slowdown. The company remains on track to open 155-165 new restaurants in fiscal 2012.

Financial Position

Chipotle ended the quarter with cash and cash equivalents of $404.8 million and shareholders' equity of $1,261.2 million as compared with $401.2 million and $1,044.0 million in 2011, respectively.


For 2012, the management reaffirmed its outlook of mid single-digit comparable store sales growth.

Our Take

Though the top-line miss by the fast-food restaurant chain came as a disappointment for some investors, we believe Chipotle is well positioned to generate improved earnings, margins and returns on invested capital. With a strong debt-free balance sheet, healthy cash flow, excellent unit economics, strategic international expansion, the successful 'Food With Integrity' program and continued marketing initiatives, we believe that the stock provides relative safety and consistent growth.

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