Chipotle customers, you were warned.
Earlier this year the company noted rising prices for many of its most important ingredients—avocados at first, followed by beef and cheese. Now executives have announced that burrito prices will rise, too, for the first time in three years. The average increase will be in the mid-single digits, according to Chipotle’s (CMG) leaders, and will go into effect over the next several months.
Chief Financial Officer John Hartung was more specific about the cost of ingredients during an earnings call on Thursday, saying the price of steak has increased 25 percent in the past three months. Cheese prices could rise 10 percent this year, and so could pork prices. The dreaded avocado shortage, brought on by the drought in California, could result in a 30 percent drop in production.
Overall, Chipotle’s food costs stood at 34.5 of revenue the past three months, an increase of 150 basis points. Revenue was $904.2 million for the quarter, surpassing analysts’ estimates, and the company issued a bullish sales-growth forecast.
There was no word from Chipotle on the price of tofu, but the company did say its new Sofritas will be available in all of its restaurants by the end of the year.