As Wall Avenue worries about what potential tariff hikes in Mexico imply for world commerce, Chipotle CEO Scott Boatwright advised CNBC’s Jim Cramer on Tuesday that about 50% of the burrito maker’s avocados come from the nation.
“Our provide chain group has executed a outstanding job over the previous couple of years with vendor diversification throughout all substances, particularly avocado,” Boatwright mentioned. “We have moved into different nations of origin, like Peru, Dominican Republic, in addition to Colombia. And right this moment, solely about 50% of avocados are sourced from Mexico.”
President Donald Trump over the weekend slapped a 25% tariff on imports from Mexico. However on Monday, he postponed the levies for a month and mentioned he would proceed to barter with the Mexican authorities, after officers agreed they might ship extra troops to the border in an effort to forestall drug trafficking. Boatwright conceded that what these tariffs imply for the meals provide stays “high of thoughts” for a lot of.
Chipotle posted its quarterly report Tuesday after shut, beating on earnings and assembly income expectations. Nonetheless, traders had been disenchanted by the chain’s same-store gross sales forecast for 2025, and shares dipped greater than 5% in prolonged buying and selling. The corporate reported that meals, beverage and packaging prices rose this 12 months, largely as a result of it “targeted on guaranteeing constant and beneficiant parts,” the success of its restricted smoked brisket protein providing, and “to a lesser extent, inflation throughout a number of gadgets together with increased avocado and dairy prices.”
Boatwright mentioned Chipotle opened 304 new eating places final 12 months, a report quantity for the corporate. He defined {that a} new synthetic intelligence assistant launched in partnership with software program outfit Paradox, often called “Ava Cado,” helps Chipotle rent the workers wanted for these new places. As soon as an applicant applies by way of Chipotle’s digital system, Boatwright continued, the AI assistant asks them preliminary questions and schedules an interview with the final supervisor.
“We leaned into AI hiring assistant by Paradox about six months in the past that has put us on higher footing from a staffing perspective,” Boatwright mentioned. “And we have been, within the eight years I have been within the group, pushing previous numbers we thought had been all-time highs simply final 12 months.”
