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Chipotle CFO Guides To 'Minor Impact' From Mexican Tariffs

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Chipotle CFO Guides To 'Minor Impact' From Mexican Tariffs

The casual fast food chain Chipotle Mexican Grill, Inc. (NYSE: CMG) is unlikely to be hit hard by potential Mexican tariffs, according to company CFO Jack Hartung.

'Very Manageable'

Chipotle imports some food items from Mexico, but they represents a small amount relative to the $1.6 billion the company spends on ingredients each year, Hartung told CNBC's Jim Cramer in a Tuesday interview.

Chipotle would see a "minor impact" Mexican tariffs if they're enacted, the CFO said: $15 million in 2019 and "a little bit more" in 2020.

"It's a very manageable part of the business," he said.

Digital 'Really Paying Off'

Chipotle showed in its first-quarter earnings report that digital sales doubled year-over-year, Hartung said.

Orders placed online now account for 16 percent of sales, and the company's investments in digital are "really paying off," as consumers crave greater convenience, the CFO said.

The key to succeeding in the digital world is to ensure that orders are not only made fresh but arrive fresh, he said.

The company's digital strategy is to allocate a second assembly line for delivery orders so that orders are ready at the same time a driver arrives to pick up the food, Hartung said. 

Chipotle shares were up 2.51 percent at $679.48 at the close Wednesday. 

Related Links:

Chipotle Warns Of Potential Impact From Mexican Tariffs

Is A Chipotle Short Squeeze Ahead?

Photo courtesy of Chipotle Mexican Grill. 

Posted-In: Jack Hartung tariffsRestaurants Media General Best of Benzinga

 

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