NEW YORK (Real Money) -- If you give 'em what they want, you can raise the price and they want more! That's the takeaway of two different earnings reports last night: Chipotle (CMG - Get Report) and Netflix (NFLX - Get Report). And it's a particularly glorious one at that.
First of all, Chipotle put up some numbers that made all other publicly traded restaurants look like they are serving rancid chicken and beef. These numbers -- comp sales up 17% when we were looking for 10% -- are insanely fabulous and much of it wasn't because of price.
It was because of throughput. It was because of skillful management that has enabled Chipotle to handle crowd management. Oh, and let's be sure, that's what it is: crowd management. If you can put through eight more transactions during the peak lunch and dinner hours, you can get a number that is well in excess of what anyone is looking for.
That's how you get to $3.50 a share in earnings instead of the Street estimate of $3.09. That's how you get to a comparable-sales number that is literally the second best ever, the first being eight years ago when the company had fewer than a third the stores it has now and the stores were making one-third less than they do.
These were mesmerizing numbers, done without specials and with a consistency that continues in July despite some pretty hefty price increases to cover increasing costs of pretty much everything they serve.
How did they do it? The bean counters won't want to hear this, but they did it by relying on Food with Integrity. They really don't do much advertising other than the online shorts that talk about how they are different. It's resonating.
The group that's really come on strong is teenage males. How fitting is it that teenage males used to live at McDonald's (MCD). I bet many of the teenage males eating at Chipotle these days wouldn't be caught dead at a McDonald's. They would be embarrassed because it is what their know-nothing, moronic, pre-Web parents ate. Eating at Chipotle is a statement, a statement that says, "Listen up food chain, we are on to you and we have had it with you."