BBB Foods, Inc. Q3 FY2024 earnings call

• Opened 131 net new stores in the third quarter of 2024, with total store count at 2,634 as of September 30th. Same-store sales grew 11.6% year on year. Total revenues increased 29.8%.
• Third quarter EBITDA was PS.688 million, a 54% year-on-year increase. For the first nine months, net cash from operating activities was ~PS.2.3 billion, a 22.4% year-on-year increase.
• Store expansion is strong: 346 net new stores in the first nine months of 2024, a 42% increase vs last year. On track to meet 2024 store opening guidance (380-420).
• Gross profit margins flat at 15.8% year on year. SG&A as a percentage of total revenue decreased by 51 basis points year over year.
• Cash generation is self-funded, with a net cash position of ~PS.1.3 billion and PS.2.9 billion in short-term U.S. bank positions.

Total revenues for the third quarter increased by 29.8% to reach PS.14.8 billion. Same-store sales grew by 11.6% year on year. Third quarter EBITDA was PS.688 million, a 54% year-on-year increase. For the first nine months, net cash flows provided by operating activities reached approximately PS.2.3 billion, a 22.4% increase year on year. The quarter ended with a net cash position of approximately PS.1.3 billion and an additional PS.2.9 billion in short-term U.S. bank-denominated positions.

• Will solidly meet 2024 store opening guidance (380-420).
• Confident in continuing to grow store count, with the potential to reach up to 20,000 stores over time.

Q: About sequential gross margin decline, operating leverage, store base in trade area, pace of store openings for 2025.

A: Gross margin fluctuations due to pricing decisions, 1,500 nettles in trade area with strong performance, on track to meet 2024 guidance, and 2025 store openings focus on meeting guidance.

Q: Cash balance, dividends, productivity of newer stores.

A: Too early to talk about dividends, newer stores performing solidly.

Q: Same-store sales breakdown by ticket and traffic, normalized gross margin, store openings seasonality.

A: Transactions and ticket size driving same-store sales, gross margin fluctuates due to pricing decisions, store openings consistent annually.

Q: Price changes lag, impact of consumer wallet tightness, FX gain.

A: Price changes have lag, 3B performing strongly, FX gain due to short-term deposits.

Q: Unit economics, CapEx, supplier relationships.

A: Target unit economics for stores, reinvesting in growth, good supplier relationships with scale.

Q: Diluted share count, impact of rain on demand.

A: Diluted share count based on accounting standards, rain had no significant impact.

Q: Gross margin, peso weakness impact on pricing.

A: Peso weakness impact on costs takes 8-18 months to pass to consumers.