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Chipotle Mexican Grill, Inc. Message Board

  • jdim1123 jdim1123 Apr 5, 2006 10:21 AM Flag

    watch employee activity & vendor prices

    Once the 180-day lock-up period ends and employees are allowed to transact, watch out for all the selling. Sell before the insiders have an opportunity to sell.

    Also - you better pray that cmg maintains favorable vendor pricing terms as they received under McDonald's ownership. Without the volume discounts received under McDonald's ownership, you can except them to pay higher prices for goods, which will result in lower EPS.

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    • "Also - you better pray that cmg maintains favorable vendor pricing terms as they received under McDonald's ownership. Without the volume discounts received under McDonald's ownership, you can except them to pay higher prices for goods, which will result in lower EPS."

      I know the prospectus warns of this, but you don't really expect it to be an issue, do you?

      • 2 Replies to edison_2_0
      • They have already separated from MCD on the most expensive items anyway - meat. Natural-raised pork, beef and chicken. Where else (except Coke) does MCD offer superior pricing advantage? Tortillas? Rice? Beans? I don't think so.

        I see this as a non-issue.

        I like to focus on this - "Chipotle is looking to up operating earnings by about 25% per year over the longer term based on a combination of new-store openings and strong margins. This year, Chipotle forecasts a the mid- to high-single-digits rise on a percentage basis." - CBS Market Watch.

        Yeah, Baby! Better than Vegas!

      • CMG has built its own network and continues to build its own network of suppliers for organic pork, chicken & increasingly, beef, beans, etc. The "Food With Integrity" initiative is one of CMG's competitive advantages & is independent of MCD's network. As for the price of other inputs, my view is that this is a non-issue given that CMG with $700 million in sales has enough bulk to generate favorable contracts on its own. Given that the CFO is a 22 year McDonald's veteran, CMG is probably up to the task of negotiating decent contracts if that is necessary.

    • We've already plowed this ground several times - the 180 day lockup ends July 26th. If you are short (and I suspect you are), you need to come up with a more near-term threat to drive the price down.

      Why not try the bird-flu/mad-cow route? It hasn't worked for marktrail/rolex/clown, but maybe it will for you.

 
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