Update: went to Nkrth Brunswick NJ location last night for dinner. 7:30PM. When I got there line was halfway to the door. By the time I sat down to eat it was not only to the door but past it. A constant influx of patrons flowed in keeping the line to the door during my 15 minutes there. This was another location a few months ago that was almost empty at this time.
This is now two data points for me personally witnessing. I now have a much higher level of confidence people are indeed returning and dramatically so in the last month.
I will be adding to my position.
It was a sealed pre-cut fruit bowl with safety seal on it prepared somewhere else but ultimately Costco sold it. Point is you can get sick anywhere and from anything.
I had a buddy in NYC get severe food poisoning at a Ruby Tuesdays salad bar just 2 months ago. He nearly died from it. Did you hear about that all over the news? Probably not.
1000's of people get sick every day from food poisoning at restaurants. You just hear about Chipotle because they traded off the better quality food mantra. Made for a juicy story for media. That will fade however and people are already returning
Yes Chipotle should have had safety protocols and didn't. Ells and Moran should be giving back the 200M plus they raked from the shareholders personally for failing to operate properly. Procedures are now in place as they overcompensate for previous shortfalls. This will serve them well in the future.
I think the board and senior management need to go and bring in some seasoned operators who don't cost the company 50M a year in exec comp.
Actually I think the exact opposite. If comps were bad they would be required to preannounce. Due to the buyback in place it is in their favor if they keep the share price down and maximize the buyback leverage. If things are indeed improving no reason to let the public know and shoot the price up thus lowering the amount of shares they can take back in.
Yes my one store is just one data point. I clarified this in my original post that started this thread if you go back and read that. However this one store was dead a few months ago and now it has lines to the door. Before the outbreak the line would be out the door so not quite back to normal yet but an enormous improvement especially considering my observations were post lunch rush.
As I said shorts can toss this as one data point or read into it that perhaps the drop has stopped and people are returning to various degrees at chipotle locations around the world
True but this is why it will take longer than typical for traffic patterns to return to more normal levels. A single incident or single cluster would have been short lived. A few incidents as they had are going to take longer. However it appears at least in some stores people are indeed returning.
People forget and go back to old patterns as long as no new danger signals present themselves. Chipotle knows they have to have a perfect record right now or they are toast. They know the stakes are high and are spending accordingly and have put protocols in place (which should have already been the case).
Management was highly negligent in their duties for allowing this to happen on their watch. Considering Ells and Moran combined as Co-CEO's were among the highest paid executives in the entire world (top 1% I believe) you would think they would have run a better food safety program.
Anyway, I have some confidence after their come to jesus moment that they will keep the food safe, people will eventually forget about what happened and return (they already are starting) and the stock price and earnings will eventually follow. If they drop the ball and more food scares occur I will mark them for dead.
BTW Chipotle is held to a much higher standard. When Costco had salmonella in their precut fruit bowls it didn't make any news or headlines. If that was Chipotle's Guacamole it would be on every major network that night and talked about for weeks on financial media. Such is the game...
Shorts only hear what they want to hear. I'm just telling you shorts what I observed. Good luck with your positions. I'm fine if you don't believe the report and urge you to go to the stores yourself and find out. Hoping chipotle stores are all empty and not recovering is not a good investment strategy because hope and reality are separate.
Best of luck
You obviously did not read what I wrote. I didn't say it was where it was 1 to 2 years ago. Yes it is off from there but it is dramatically up from where it was just a few months ago. If you had ready my post you would have realized this.
The trend is improving. I cannot tell you when it will be back to prior levels I can just say at this store it was up dramatically from where it was not too long ago post crisis.
FYI you run that risk at every restaurant and grocery store you go to. I got salmonella from a fruit platter at Costco. Do you go there?
Went by Bridgewater NJ store which a few months ago had no line at all at 12:30PM to 1:30PM. I walked right in on two visits and ordered. Happened to be in the area this past Friday at 1:30 so looked in and saw a line was just a few people short all the way to the door. This is after the heavy 12PM to 1PM "lunch rush" time too.
I was leaving the area around 2:15PM and checked again and the line was right up to the door. Night and day compared to just a few months ago. Just one store and one data point but take that FWIW
Correct. For now quants have negative correlation programmed until that pattern breaks. Longs can relax as buy orders go back in when market pulls back
They are doing something. Selling stock. All top apple executives show their lack of conviction as they sell all granted stock options hand over fist the moment they vest. Nobody holds any significant stake. Go back to 2010 to now and look at the dumping and timing. Look at their holdings. They don't believe so why should we
This is too much. Worst dow performer of the last year and getting worse. Icahn out. All tech and mainstream media hating on apple. Tim Cook just making thinner products of same stuff. Burning capital on a car that likely won't ever happen and if it does may not move the needle or even be successful. Cook refusing to acquire any major company and lets cash sit dead in the bank overseas.
This is not Steve Jobs Apple anymore and it is starting to show. I'm done. Out. Can't take it anymore. Every other stock going up and is loved like Amazon. Everyone hates apple stock.
So I just got back from lunch at Bridgewater NJ Chipotle location. Typically this is one of their busiest stores before the outbreak debacle. Lines most of the day out the door even as late as half hour before closing.
I went in there twice in the last two months not to eat but to see if they were busy and it was pretty dead the first time, like a ghost town. The second time it was a little busier but no more than one or two people on the line and maybe 15% of the tables occupied.
After the latest analyst note I was interested to see how they were doing today since I was in that area. I figured I would stop there and actually eat and watch the traffic. I got in there and maybe 5 people ahead of me on line. I ordered within one minute of walking in.
The line stayed pretty steady ( I arrived around 1PM) and actually grew over the next twenty minutes to the longest I've seen since this happened. Maybe about 15 people on the line and pretty steady with new patrons coming in. I would say about 2/3 of the tables were occupied by the time I left.
Just one data point at one location but it was a stark contrast to just a couple months ago when at peak lunch and dinner there was anywhere between 1-2 people online and just a couple tables occupied.
Hard to read much into just one location but I do find the mass psychology observation useful in these types of channel checks.
Because it isn't splitting before next week so it will never see 85 until after the split (when the stock is 170)
Yes. After the 2 for 1 split I can get it for $60 but don't feel the need to wait. I will buy it here.
Not sure I agree with that thesis. Chipotle has been around for 22 years. Over that time same store sales have been rising even on stores 15+ years old. If people were tiring from the taste those stores would be flat or in decline but they weren't (prior to the e. coli).
In time people will forget and move on and start eating there again. Nobody today doesn't eat at Taco Bell or Jack in the Box because they fear getting sick. IF they don't eat at those places it is for wholly other reasons
How long the climb back will be is unknow. It could be 6 months, a year or perhaps two. I suspect if there are no more incidents and their marketing is on point they will surprise everyone with just how fast people return for the flavor they seem they can't do without.
100% agree. I was shocked because the magnitude was off the charts. I thought there would be a line but just maybe not to the door. I figured at peak lunch at least 50% to 2/3 of the tables occupied. The only time I have ever seen it even close to this was when I got there 5 minutes before it once opened and even then within 5 minutes it was busier.
The unknown here is not just if, but when patrons will return. I think that most will but there will be some permanent loss. I think some amount of the brand they promoted is forever damaged. Buffett says it takes a lifetime to earn your reputation and 5 minutes to destroy it. CMG is learning this lesson.
Now they have mass uncertainty and lawsuits galore. I agree 30x is a bit rich unless people return way faster than everyone expects. I like the stock at 300/share but you never know if investors will give a shot at that. This stock has always traded at a premium so we'll see
Why does that location baffle you? People still terrified of getting sick from eating there and not going. I went to Shake Shak in NJ which is right next to my Chipotle which I used to go 3 to 4 times a week. Shake Shack was packed. Literally standing room only.
This Chipotle is the busiest one I used to go to. I've been there as early as 11am and as late as 9:30PM where all tables are taken and line to or out the door. Last Sunday 12:30PM I was blown away as I have not even been by this location since the outbreak. There were only 2 tables taken in the entire restaurant and 1 person on line. By the time I left Shack it was a little better around 1:10PM with maybe 40% of the tables occupied and 3 people on the line.
I've never been to this location as I said without lines to or out the door and anxiety of how long we would have to wait for a table. This was pretty eery how dead it was. If Chipotle comps are not off at least 50% or more I will be shocked. Granted you won't see this for the last quarter but for January and possibly december months I think so.