Chipotle misses EPS and Revenues by a hair. Will the ever advertise?
Earnings are out for Chipotle Mexican Grill ( CMG ). The numbers just missed estimates by a hair. The street wanted 2.30 in EPS and they earned $2.27. Revenues were generally in line. Same Store sales were just ok at 4.8%. However guidance for same store sales for 2013 were forecast for flat to mid single digits. That is NOT good.
So what can they do to remedy this flat same store sales growth? Well it is easy. Chipotle needs to start marketing and start now. I see five Taco Belle television commercials each day. I have never seen one Chipotle commercial. They need to start TV, radio marketing, branding and promotion in select areas.
I’m not sure why Chipotle thinks that they can live strictly off of word of mouth for traffic. They have gotten by so far to date on this but at some point you do need to market and advertise. Coke and Apple are top brands on the planet. They spend a ton marketing. Apple has plenty of free press and word of mouth and still runs TV ads galore.
If Chipotle thinks they can just let people find them and not advertise other than billboards that just isn’t going to cut it anymore. They need to hire a new marketing officer who gets it. Facebook marketing alone isn’t going to cut it. If I don’t see some kind of attempt to start advertising and marketing I am afraid I’m out of the stock. Flat same store sales could turn into declining same store sales.
It is no wonder that local restaurants and pizza places near me even advertise. Everyone has to. Why does Chipotle think they are above all that? McDonalds advertises. Wendy’s does. Domino’s does. Pizza Hut does. Taco Belle does. Arby’s does. Chipotle why are you so special?