Chipotle Mexican Grill is unfazed by potential tariffs on Mexican imports, citing a diversified supply chain that reduces its reliance on Mexico for avocados and other key ingredients.
The company expects its cost of sales to rise 60 basis points if tariffs aimed at Mexico, Canada, and China go into effect. However, this increase is largely driven by the impact on avocado imports from Mexico, which account for only half of Chipotle’s total supply chain.
CEO Scott Boatwright revealed that about half of Chipotle’s avocados are sourced from Colombia, Peru, and the Dominican Republic. The company has taken steps to diversify its avocado supply in recent years.
Chipotle’s sales are less affected by international imports, with only 0.5% of sales coming from Canada and China. In contrast, Mexico supplies around 90% of avocados consumed in the US.
Despite uncertainty surrounding tariffs, Chipotle reported strong same-store sales growth of 5.4% for the fourth quarter, driven by a traffic increase of 4%. The company’s earnings exceeded Wall Street estimates, but shares fell 5% following a conservative forecast that did not include the impact of potential tariffs.
Source: https://www.cnbc.com/2025/02/04/chipotle-earnings-trump-tariffs-may-raise-avocado-costs.html