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What to Watch When Chipotle Mexican Grill, Inc. Reports Earnings

CMG Operating Margin (TTM) Chart
CMG Operating Margin (TTM) Chart

CMG Operating Margin (TTM) data by YCharts .

These negative trends likely combined to push operating income down to just one third of the prior-year's result, which shows just how far Chipotle must climb before it can reach the near-30% restaurant operating margins it enjoyed just before its crisis hit.

The company has no shortage of important spending priorities ahead, including a huge new one tied to food safety. Chipotle may also need to boost wages, given that it's now asking employees to spend a chunk of their time following some of the industry's strictest food-handling procedures. Meanwhile, these team members are asked to stay engaged enough in customer service to make the stores more enjoyable places to eat than they have been recently. Without solidly profitable existing locations, it's possible Chipotle may need to consider scaling back on its store growth plans, which could make 2017 another difficult year for the business.

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Demitrios Kalogeropoulos owns shares of Chipotle Mexican Grill. The Motley Fool owns shares of and recommends Chipotle Mexican Grill. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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