Chipotle Mexican Grill, Inc. (CMG)

MCD operated 31,377 restaurants in 118 countries ($67B)


CMG had 704 restaurants in 33 states ($2.6B)


SBUX operated 8,505 retail stores ($11B)





I haven't actually looked up the numbers, but my guess is that operational costs (if you split out product costs) for CMG are much lower than MCD and more on par with SBUX. Product cost are probably higher than MCD because their purchasing power is lower and the type of meat they use.





When I lived in Austin, lines were out the door during lunch and I ate there 3-4 times a week. Now I live in Raleigh, and I question the placement of some stores. I was in DC a while back and couldn't help but notice that they were everywhere.





Overall, I can't see them not being a $10B company over the next 5-10 years because they are so much better than their direct competition (Qdoba, etc.) and their burritos are totally addicting. The mid-term downside risk is in store placement. If this group is weak, it will detract from their growth--although they'll still grow. The long-term downside is that they WILL open many stores that they shouldn't and will end up closing them, just like MCD, SBUX, etc.





I think they will outperform over the next 5 years or so if they are smart about entering new markets, however, they are under a lot of pressure to grow. They also need to manage expectations since 40% yoy growth is unsustainable.