Chipotle Mexican Grill
Net income dipped 3.2% to $17 million, or $0.52 per share. Revenue looked more impressive, surging 19.5% to $345.3 million, and comparable restaurant sales ticked up by 3.5%. Restaurant level operating margin dropped 100 basis points to 21.1%.
Of course, there's more to the sales figures than meets the eye. Chipotle said its increase in comps growth was due to higher menu prices offset by a decline in customer visits -- we can look at that fact and say "hmm." Some restaurant chains are resorting to raising their prices -- my Foolish colleague Kristin Graham pointed out that last quarter, Panera
I think Chipotle's a great company for many reasons, but I'm less enthusiastic about it than I used to be. Its former parent, McDonald's
Of course, temporary performance can be the perfect time for investors to load up on shares of any stock, but I think the stock seems awfully pricy when the business may need a bit of reheating. It's trading at 22 times earnings, which seems high compared to restaurant peers like McDonald's. Plus, Chipotle's 2007 full-year earnings only grew 10.8%. I'd say those with a craving for Chipotle should wait for a cheaper price -- and more signs of life -- to gobble up this stock.
Reheat some Foolishness about Chipotle:
- Colleen Paulson thought Chipotle was undercooked in October.
- I pondered mystery meat at Chipotle when it warned in September.