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from the FIRE-sector-doing-bad-math-again dept.
The Intercept reports:
Bank of America Merrill Lynch downgraded Chipotle and warned investors that the stock will "underperform", complaining that the restaurant chain is paying its workers too much, and that cutting labor costs further will be difficult for the chain.
[...] Chipotle spokesperson Chris Arnold called Bank of America's analysis "flawed and inaccurate", adding that the restaurant chain hasn't cut employee hours but recently increased hours in conjunction with the addition of queso to the menu.
"That analysis is making estimates and conclusions about our management practices over a 12-year time frame from 2006 to 2017", Arnold told The Intercept. "Obviously, the scale of our business and labor wages have changed dramatically over that time frame. Drawing conclusions from 2006 and applying them as a directional change to our business over the past 12 months is simply flawed."
[...] "We continue to pay wages and offer benefits that are competitive and that reflect the priorities of our employees", Arnold said. "And with a commitment to developing and promoting people from within, we are providing significant opportunities for advancement."
The downgrade is a symptom of Wall Street's maniacal obsession with labor costs.
(Score: 2) by JoeMerchant on Monday October 23 2017, @02:05AM
So, I'm all for fair, level playing field, etc. - but... in an organization like Chipotle, total annual revenue around $4B, annual gross profit between $500M and $1B, Ells taking $25M in pay for a good year (where they earned $500M more than a poor year), isn't any kind of a problem for the organization, or even "fairness" - sure, I'd like a lot of than money to be going to the rank and file as part of "fairness" - but, with 64,000 employees, you could divide up the entire $25M evenly among them all and it would come out to just over $1 per person per day, $390 for the year, figure those employees average 1000 hours worked per year (lots of part timers), and that's a $0.39/hr bump in pay... wheee, let's all run out and buy Ferraris with our raises, right?
Sounds like the employees are getting better than that bump over "market rate" unless the bank is worried about nickle and dime differences - so, again, kudos to Chipotle, and may their successes continue. Me, personally, I'd rather pay $8 for a plate of beans, rice and pork from a restaurant well staffed with happy employees, instead of $7 for the same plate of food served up by disgruntled wage slaves who may well be spitting in the food in the back room 'cause what have they got to lose, their crappy job? How much do I care about the IRR to shareholders of the restaurant where I eat my lunch? Not at all.
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