A recent surge in avocado prices could have “material ramifications” for Chipotle Mexican Grill’s (CMG) third quarter earnings results, according to a research note from Credit Suisse.

Credit Suisse analysts Jason West and Jordy Winslow note that avocado prices have increased about 75% since mid-July and are up about 50% year-over-year because of a shortage in Mexico and a weaker harvest in California.

This spike puts pressure on the fast casual chain’s food costs. Chipotle’s management warned that avocado prices were creeping higher during their July earnings conference call.

“Food costs during the quarter were 34.1% of sales, mostly in line with last year,” CFO John Hartung said. “The short supply environment for avocados continue to pressure our food costs by about 140 basis points compared to last year and by 70 basis points compared to last quarter.”

Avocado is the central ingredient in guacamole. Chipotle charges customers extra if they want it in their burritos, burrito bowls, or salads.

According to Credit Suisse’s estimates, avocados make up about 10% of Chipotle’s cost of goods basket. They estimate that each 10% change in avocado prices impacts EPS by about 30 cents, or about 4% for the year.

Credit Suisse lowered its 2017/2018 EPS to $6.38/$9.57 from $6.95/$9.71 and lowered their third quarter EPS estimates to $1.15/$1.30, about 40/30% below consensus estimates. They also lowered their price target to $320 from $335.

Shares of Chipotle were last trading up 2.3% at $308.65 per share on Friday.

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Julia La Roche is a finance reporter at Yahoo Finance.

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