By coinnews 
00:00 Speaker A
Shares of Chipotle fallen as the market sell off accelerates, the company set to report first quarter earnings on Wednesday. For more, we’re bringing in Yahoo Finances’ senior reporter, Brooke DePalma. Brooke?
00:11 Brooke DePalma
Yeah, good afternoon to you both. Chipotle results expected to be a bit overshadowed here, of course, by those President Trump’s trade war. It certainly is wondering, or leaving Wall Street wondering the impact on both Chipotle’s cost of goods as well as the impact on consumer behavior. And if you take a closer look at the numbers, we are still expected to see a slight, ever so slight, year over year increase for both adjusted earnings per share as well as revenue. But same-store sales growth far lower, as well as expectations go, than what we saw last year. Same-store sales expected to grow nearly just 2% in this environment, as consumers are perhaps pinching a bit of their wallet. Traffic growth, expected to see a modest decline for the first time since 2022. Now, higher average check could offset that a bit. We are expecting to see a bit of an increase when it comes to the average check size, roughly an increase of 2.69%. Now, some key things that investors are watching for here includes the performance of that LTO offering, that honey chicken, uh, protein offering they had. It had a great test run, but Wall Street certainly does not think that it played out as well as it did in the test run. Also, guidance for 2025. The company previously said that they expect same-store sales to increase in the low to mid-single digit range, and of course, President Trump’s tariffs are expected to be top of mind for Wall Street going into this report. We know that about 2% of sales of Chipotle sales are sourced from Mexico. That includes half of Chipotle’s avocados. It also includes other ingredients like tomatoes, limes, and peppers. We know that right now, most of the produce coming from Mexico is exempt under that United States-Mexico-Canada agreement. Tomatoes into the summer will go off that exempt list. We also know that they have diversified so much, so much of their sourcing of avocados now are coming from the Dominican Republic, Guatemala, Colombia, Peru, as well as Brazil. And so perhaps as they diversified where they were getting their avocados from, now the 50% that they’re getting from Mexico’s are exempt at this very moment.
03:33 Speaker A
Well, and speaking of diversifying, now there’s a report that they are diversifying geographically as well. They’re planning their first location in Mexico, right?
03:43 Brooke DePalma
In Mexico, exactly. And they’re planning to open up one location as far as we know with Alsea, it’s a restaurant operator that’s primarily known in Latin America, as well as Europe. That’s expected to open in early 2026. And then the idea is that they’ll sort of assess where they go from there. Alsea known to have other franchise models in Mexico, including Domino’s, Starbucks, Burger King, Chili’s. So certainly one to watch. This is not the first international expansion for Chipotle. We know that they expanded, expanded in the Middle East back in July of 2023, partnering with another restaurant operator there, but certainly something to watch. I mean, expanding internationally during this time, definitely an interesting move.
04:29 Speaker B
Yeah, and it’s also interesting, aren’t most of their locations, especially in the US, owned by and operated by Chipotle themselves, okay?
04:37 Brooke DePalma
Company owned, exactly. So this is a new business model that they’re certainly testing the waters on here, uh, but all company owned in the US. They also have long-term goals to have 7,000 locations in both the US and Canada. Right now they have about 3,500.
04:56 Speaker B
Oh, doubling. All right. Thank you so much, Brooke. Appreciate it.