Here's Why Your Bowls And Burritos At Chipotle Won't Cost Higher Due To Tariffs: 'It's Unfair To The Consumer', Says CEO Boatwright

Chipotle CMG CEO Scott Boatwright spoke about the company’s financial stability and growth potential despite the current market uncertainties.

What Happened: Boatwright stated that Chipotle would not hike prices on its menu due to tariffs. The CEO emphasized that the strength of Chipotle’s balance sheet, low debt, and substantial cash reserves are the key contributors to the company’s resilience. The company is well-positioned to absorb the full tariff impacts imposed by the Trump administration, which would cost about 60 basis points of margin on the year, indicated Boatwright in a recent interview with Fortune.

“I think it's unfair to the consumer to pass those costs off to the consumer, because pricing is permanent,” stated Boatwright. The CEO also expressed that he is unsure which parts of the tariffs are temporary and which will remain in place permanently.

Addressing concerns about the future of the restaurant industry amid political uncertainties, Boatwright acknowledged a market pullback and cautious consumer behavior. However, he expressed optimism about Chipotle’s position.

Boatwright also highlighted positive transaction trends following the launch of Chipotle Honey Chicken. He also credited the company’s AI-powered virtual team member, Ava Cado, for significantly reducing onboarding time and improving staffing efficiency, despite industry headwinds.

SEE ALSO: Kevin O’Leary Isn’t Satisfied With Trump Raising China Tariffs To 125%: The Shark Says, ‘This Isn’t About Politics, It’s About Fairness’ – Benzinga

Why It Matters: Chipotle’s resilience and growth prospects are underpinned by strategic initiatives undertaken by the company. In February, Chipotle launched a campaign to hire 20,000 new employees ahead of the busy “Burrito Season,” which runs from March to May. This move was aimed at increasing staffing across its 3,700+ locations. The company also introduced new employee perks and TV commercials featuring its actual staff members to attract more applicants.

That being said, the CEO acknowledged that the current environment is highly uncertain and there is a “bit of slowdown” in the industry. “We drove comp sales last year at 7.4%, largely driven by a great transaction flow. As we got into the new year, there was a lot of things, or headwinds, I should say, within the industry, specifically,” stated the CEO.

Nevertheless, Boatwright is confident about Chipotle’s brand positioning. The employee-centered initiatives, coupled with the launch of Chipotle honey chicken and the introduction of AI-powered Ava Cado, demonstrate Chipotle’s commitment to innovation and growth, even in the face of market uncertainties.

On Wednesday, RBC Capital Markets maintained its ‘Outperform’ rating on Chipotle stock with a price target of $70.

Chipotle holds a growth rating of 72.59% and a quality rating of 88.16%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.

• READ MORE: Ray Dalio Says Don’t Make The Mistake Of Thinking What’s Happening Now Is Due To Trump Tariffs – Benzinga

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.