Chipotle says Mexican tariffs could cost it an additional $15 million, possibly forcing price rises
Chipotle Mexican Grill said its 2019 costs could rise by about $15 million this year if President Donald Trump’s proposed tariffs on Mexican imports are enacted, and that could mean price increases.
“If the tariffs become permanent, we would look to offset these costs through other margin improvement efforts already underway,” CFO Jack Hartung said in a statement. “We could also consider passing on these costs through a modest price increase, such as about a nickel on a burrito, which would cover the increased cost without impacting our strong value proposition.”
Chipotle said its net income last year rose to $176.6 million, $6.31 per share, on revenue of $4.9 billion. Excluding asset impairments and restructuring costs, the company earned $253.4 million, or $9.06 per share. The company’s results were helped by price increases it put in place late in the year.
Chipotle was already expecting food costs in the second quarter to be 1% higher than the first quarter due to rising avocado prices. Tariffs would mean prices could be even higher.
https://www.cnbc.com/2019/06/03/chipotle-says-mexican-tariffs-could-boost-costs-by-15-million-in-2019.html
