Chipotle downplays potential Trump tariffs, saying barely half of its avocados come from Mexico

Chipotle Mexican Grill anticipates minimal cost increases if tariffs on major imported products are implemented next month. The company sources almost half of its avocados from Mexico.

A day ago, President Donald Trump halted his intentions to impose 25% tariffs on Mexican and Canadian imports. If imposed after the one-month moratorium, imports such as avocados and cattle would be more expensive for eateries, who would most likely try to pass on the higher cost to their customers.

In fact, whereas Mexico provides over 90% of the avocados consumed in the United States, Chipotle sources roughly half of its avocado supply from Colombia, Peru, and the Dominican Republic, according to CEO Scott Boatwright. Chipotle has taken steps in recent years to source more avocados from countries other than Mexico, he told analysts.

Beyond Chipotle’s guacamole supply, fewer than 0.5% of Chipotle’s revenues come from Canada and China. Trump has already slapped a tariff of 10% on Chinese goods.

In recent quarters, Chipotle has demonstrated pricing power, even as diners become more value-conscious.

For the fourth quarter, the company recorded a 5.4% gain in same-store sales, driven by a 4% increase in traffic. Chipotle’s profits beat Wall Street expectations, but a cautious prediction for same-store sales growth drove shares down 5% in extended trade.

Tariffs were not factored into the outlook.