You’d be forgiven if, after hearing the CEO of Chipotle describe its first ShopHouse Asian Kitchen restaurant concept that was opened in DuPont Circle a few years ago, you agreed with the cohort of Wall Street’s finest that declared ShopHouse might become the next leg of growth for the then-plenty-fast-growing-already purveyor of burritos and tacos “With Integrity.”
You’d be forgiven because the CEO of Chipotle repeatedly—and by that, we mean more than a dozen times over the next few years—promoted the concept and often compared that first ShopHouse restaurant with the early days of Chipotle itself.
Chipotle reports next week and we’ll finally get to see how the company’s “buzz-worthy” (their word, not ours) marketing efforts (like the online game “Friend or Faux,” the “Chiptopia” rewards program, and the online animated movie “A Love Story”) have been working to bring customers back after last year’s food-borne illness outbreaks linked to various Chipotle restaurants caused comp-store sales to tank, spurred a CDC investigation and forced the self-styled “Food with Integrity” chain to spend a lot of money upgrading the integrity of its food-handling procedures.
Wall Street, for the most part, seems convinced the storm will blow over—if a 100-times next-year EPS multiple is any indication.
In the world of Shake-Shack, everything is about “The Shack.”
Where most restaurants report “same-store sales” and “store-level operating margins” and “store economics,” SHAK reports “same-shack” sales and “shack-level operating margins” and “shack-onomics.”
It’s a cute, quirky culture the company has built from modest roots—the now-famous hot-dog stand in Madison Square Park—into an international phenomenon, in 12 short years.
Of course, 12 years in today’s world is actually a long time, but things didn’t get serious until 2004 when the first Shake Shack restaurant opened, starting the launching pad that would shoot the rocket ship into orbit following the wildly hyped IPO just 16 months ago to the point where, by the end of the first quarter, there would be 88 such “Shacks,” with an inordinately large number—36 to be exact—licensed to other operators outside the U.S., mainly in the Middle Continue reading "Well That Was a Shack-ingly Brief Run"
It’s bad enough when analysts thank CEOs for letting them ask a question on an company earnings call, at least when they do it in a way that goes beyond a simple act of politeness and more towards a cringe-making act of fawning, which too many analysts have a way of doing these days.
This is, after all, a business: it’s an analyst’s job to ask questions; it’s a CEO’s job to answer them. Get on with it.
What’s worse, however—much worse—is when an analyst who asks a good question gets schmoozed by the CEO, and instead of following up and getting an answer, surrenders.
It happened tonight on the Apple call.
After thanking the company for “fitting me in” (really?) the analyst asked Tim Cook—all quotes are from the indispensable Seeking Alpha—a very reasonable question about the “top two or three things” Continue reading "When Analysts Surrender"