Tuesday, January 11, 2011

Food Costs Go "BOO!" to Chipotle

Despite evidence presented to the contrary, Chipotle’s (CMG-$223.67) CFO Jack Hartung told analysts on the third-quarter 2010 earnings call that the company is planning operations this year with “overall food-cost inflation in the low-to- mid-single digit range.” Additionally, the company planned to be patient with pricing strategy, and would monitor competitor traffic patterns in response to their menu price hikes.

Hartung remained resolute in his belief that Chipotle had more “pricing power” than some of its competitors; all stores are company-owned, and it could more readily absorb higher food costs than franchise-operated chains (which pay royalties to the parent companies).

“Wait-and-See”? Yes – or No? Read More at CBSi > > >

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.