Feb. 3 at 8:08 PM
$CMG Earnings Preview: Protein Power?
The story has been the same for similar "slop bowl" companies (
$CAVA,
$SG) etc...for that is simple.
They did not align with the "K-Shaped Economy. "
(Our pick written here does though: https://kryptonresearch.substack.com/p/a-k-shaped-pick)
Fast food did well in recent times as poorer, young, consumers began trading for cheaper options as inflation and job concerns weighed.
On the other hand, wealthier consumers began trading up to more expensive restaurants and novelty offerings, which helped fuel those stocks higher.
Those left in the middle
$10-
$30 price point for food were left with lower demand.
Chipotle combated this by introducing their new protein menu with cheaper options in a bid to regain traction in the young gym cohort.
We still see the stock as rather expensive, at least until they can prove stronger same store sales growth, and would not touch until we see the low
$30S again. There is still room for multiple compression unless any signs of organic growth emerge.
