Chipotle's report should be easy to swallow

Although I hold a very negative short term view for the restaurant sector due to a wide variety of macroeconomic pressures, I think that Chipotle Mexican Grill Inc. (NYSE: CMG) is not going to disappoint the Street after the bell today -- a view I've held since my first post on troubles in the restaurant space.

My positive view on Chipotle is rather easy to understand. Basically, I think the company's results for the second quarter are going to be roughly in-line with what the Street is expecting, easily appeasing it. However, more importantly, I expect the company to reiterate its guidance of 25%+ long term EPS growth. This move, in my opinion, will please investors -- especially those who had been hesitant to buy the stock due to weakness of the restaurant sector as a whole.

How can the company fight the current macro pressures facing the entire dining industry? Essentially, I think the company has been, and will continue to, raise prices. This quarter the company rolled out its all natural strategy in Colorado -- a move which I believe will allow the company to raise prices in this state and other states as the move is mimicked. In addition, the company is actually cutting costs on the labor front as a result of G&A leverage. Even though the company will note higher commodity costs, I think Wall Street will be satisfied that the company is managing to operate very well even in this tough environment.

It's all about sentiment on Wall Street and I think Chipotle is going to deliver a report that keeps investors happy.