Financial Data and Key Metrics Changes - Total revenues for Q4 2024 increased by 32.7% to 16.3 billion pesos, while full-year revenues increased by 30.3% to 57.4 billion pesos [5][8] - Same-store sales growth for Q4 was 11.8%, and for the full year, it was 13.4% [5][10] - Net cash flows generated by operating activity reached 3.749 million pesos, a 19.4% increase year over year [5] - The company ended the year with a net cash position of approximately 1.4 billion pesos and retained about 150 million USD since the IPO [6] Business Line Data and Key Metrics Changes - The company opened 138 net new stores in Q4 and a total of 484 new stores for the full year, representing a 21% increase over 2023 [5][7] - Private labels now represent 54% of total sales, up from 47% in 2023 [14] Market Data and Key Metrics Changes - The company significantly outperformed the Antad numbers, with Q4 same-store sales growth of 11.8% compared to Antad's 2.6% [10] Company Strategy and Development Direction - The company plans to open between 500 and 550 new stores in 2025, with same-store sales guidance between 11% and 14% and total revenue growth in the range of 26% to 29% [22] - The company continues to focus on enhancing its value proposition through continuous improvement in product quality and features [11][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience during economic downturns and anticipated a strong year in 2025 despite uncertain conditions [21][23] - The company has a robust strategy for real estate expansion, focusing on increasing store density in existing markets while exploring new geographies [31][32] Other Important Information - SG&A as a percentage of revenue increased by 96 basis points to 15.2% in Q4 2024, driven by sales and administrative expenses [15][16] - EBITDA for Q4 2024 reached 845 million pesos, representing a 51% growth year-over-year [19] Q&A Session Summary Question: Expansion strategy and balance of growth across new and existing areas - Management confirmed a decentralized approach to real estate, focusing on increasing store density and exploring new geographies [31][32] Question: Drivers behind the increase in private label penetration - The increase is attributed to improved value offerings in private labels, leading to higher sales [80] Question: Gross margin expansion and competition outlook - Management noted that gross margin improvements are driven by increased purchasing power and operational efficiencies, and they have not observed significant changes in competition [66][72] Question: Same-store sales growth sustainability - Management expressed cautious optimism about maintaining high same-store sales growth rates, driven by continuous improvements in the value proposition [51][52] Question: Store opening guidance and operational bottlenecks - Factors affecting store openings include real estate availability, capital, and human resources, with confidence in achieving the projected numbers for 2025 [59][62] Question: Optimal expense levels as a percentage of sales - Management indicated that expenses should decrease as a percentage of sales over time as the company scales [88][90] Question: Future of remittances and supplier relationships - Management confirmed that remittances are on the table as a potential service, and long-term planning with suppliers has mitigated current market uncertainties [113][118]

[Report Overview](index=1&type=section&id=Report%20Overview) [Company Information](index=1&type=section&id=Company%20Information) BBB Foods Inc. (Tiendas 3B) is a leading Mexican discount grocery retailer, listed on the NYSE in February 2024 with ticker TBBB, embodying the 'Bueno, Bonito y Barato' philosophy - BBB Foods Inc. (Tiendas 3B) is a leading discount grocery retailer in Mexico, listed on the NYSE in February 2024 with ticker **TBBB**[6](index=6&type=chunk)[70](index=70&type=chunk) - The company name '3B' originates from the Mexican proverb 'Bueno, Bonito y Barato' (Good, Nice, and Cheap), reflecting its mission to offer quality products at affordable prices[70](index=70&type=chunk) [Key Highlights](index=3&type=section&id=Key%20Highlights) Tiendas 3B achieved strong growth in Q4 and full-year 2024, opening 138 new stores in Q4 with total revenue up 32.7% and EBITDA up 51.1%, and 484 new stores for the full year with total revenue reaching **Ps. 57.44 billion** and EBITDA growth of **51.2%** Q4 2024 Key Performance Highlights | Metric | 4Q24 Data | Y-o-Y Growth | | :--- | :--- | :--- | | New Store Openings | 138 stores | - | | Total Stores | 2,772 stores | - | | Total Revenue (Ps. million) | 16,347 | 32.7% | | Like-for-like Sales Growth | 11.8% | - | | EBITDA (Ps. million) | 845 | 51.1% | Full Year 2024 Key Performance Highlights | Metric | 2024 Data | Y-o-Y Growth | | :--- | :--- | :--- | | New Store Openings | 484 stores | - | | Total Revenue (Ps. million) | 57,439 | 30.3% | | Like-for-like Sales Growth | 13.4% | - | | EBITDA (Ps. million) | 2,847 | 51.2% | | Negative Working Capital (Ps. million) | 2,633 | - | | Operating Cash Flow (Ps. million) | - | 16.6% | [Message from Chairman and CEO](index=4&type=section&id=Message%20from%20Chairman%20and%20CEO) Chairman and CEO K. Anthony Hatoum highlighted rapid growth and strong performance in 2024, with **484 new stores** and **13.4% like-for-like sales growth**, outperforming the market, and expressed commitment to continued expansion and value provision in 2025 - In 2024, the company achieved rapid growth and strong performance, opening **484 new stores**, bringing the total to **2,772 stores**[9](index=9&type=chunk) - Like-for-like sales grew **13.4%**, again outperforming the market, driven by increasing value for customers, rigorous execution, and efficient store expansion[9](index=9&type=chunk) - In 2025, the company will focus on expanding its footprint, enhancing capabilities, and continuously providing exceptional value to Mexican households[12](index=12&type=chunk) [Financial Performance - Fourth Quarter 2024 (4Q24)](index=5&type=section&id=Financial%20Performance%20-%20Fourth%20Quarter%202024%20%284Q24%29) In Q4 2024, total revenue grew **32.7%** to **Ps. 16.35 billion**, gross margin improved to **16.5%**, EBITDA increased **51.1%** to **Ps. 845 million**, and net loss significantly narrowed by **75.7%** to **Ps. 24 million** [4Q24 Consolidated Income Statement](index=5&type=section&id=4Q24%20Consolidated%20Income%20Statement) Q4 2024 saw total revenue increase **32.7%** to **Ps. 16.35 billion**, driven by existing store sales and new openings, with gross margin improving to **16.5%** and EBITDA growing **51.1%** to **Ps. 845 million** Q4 2024 Consolidated Income Statement Key Data | Metric | 4Q24 (Ps. million) | 4Q23 (Ps. million) | Growth (%) | % of Revenue (4Q24) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue (Ps. million) | 16,347 | 12,316 | 32.7% | 100.0% | | Cost of Sales (Ps. million) | (13,649) | (10,305) | 32.4% | 83.5% | | Gross Profit (Ps. million) | 2,698 | 2,011 | 34.2% | 16.5% | | Selling Expenses (Ps. million) | (1,913) | (1,392) | 37.4% | 11.7% | | Administrative Expenses (Ps. million) | (561) | (354) | 58.4% | 3.4% | | Other (Expenses) Income – Net (Ps. million) | 54 | (37) | 246.3% | 0.3% | | Operating Profit (Ps. million) | 278 | 228 | 22.0% | 1.7% | | EBITDA (Ps. million) | 845 | 559 | 51.1% | 5.2% | | Net Financial Costs (Ps. million) | (182) | (311) | (41.6%) | - | | Income Tax Expense (Ps. million) | (120) | (14) | 773.7% | - | | Net Loss (Ps. million) | (24) | (97) | (75.7%) | 0.1% | [4Q24 Total Revenue](index=5&type=section&id=4Q24%20Total%20Revenue) Total revenue for Q4 2024 increased **32.7%** to **Ps. 16.35 billion**, primarily driven by sales from stores operating over one year and incremental sales from new store openings - Total revenue for Q4 2024 was **Ps. 16,347 million**, a **32.7%** increase compared to Q4 2023[15](index=15&type=chunk)[72](index=72&type=chunk) - Revenue growth was primarily driven by sales from stores operating for over one year, followed by incremental sales from the **484 new stores** opened in 2024[15](index=15&type=chunk) [4Q24 Gross Profit and Margin](index=5&type=section&id=4Q24%20Gross%20Profit%20and%20Margin) Gross profit for Q4 2024 grew **34.2%** to **Ps. 2.70 billion**, with gross margin improving **18 basis points** to **16.5%** due to better supplier terms from increased scale - Gross profit for Q4 2024 was **Ps. 2,698 million**, a **34.2%** increase compared to Q4 2023[16](index=16&type=chunk)[72](index=72&type=chunk) - Gross margin improved by **18 basis points** to **16.5%**, primarily due to improved supplier terms from increased scale[16](index=16&type=chunk)[72](index=72&type=chunk) [4Q24 Operating Expenses](index=5&type=section&id=4Q24%20Operating%20Expenses) Operating expenses in Q4 2024 saw selling expenses rise **37.4%** to **Ps. 1.91 billion** and administrative expenses increase **58.4%** to **Ps. 561 million**, impacted by store expansion, personnel, and IPO-related costs - Selling expenses increased **37.4%** to **Ps. 1,913 million**, representing **11.7%** of total revenue, mainly due to increased personnel from store expansion, wage inflation, and non-recurring non-cash accounting recognition[17](index=17&type=chunk)[72](index=72&type=chunk) - Administrative expenses increased **58.4%** to **Ps. 561 million**, representing **3.4%** of total revenue, primarily due to headquarters personnel recruitment to support growth, public company readiness costs, regional operational expansion, and non-recurring expenses related to a subsequent offering in 2025[18](index=18&type=chunk)[19](index=19&type=chunk)[72](index=72&type=chunk) - Other (expenses) income – net was a net income of **Ps. 54 million**, compared to a net expense of **Ps. 37 million** in the prior year period, primarily driven by incremental income from balance sheet clean-up (e.g., write-off of inactive liabilities and historical cash surpluses)[20](index=20&type=chunk)[72](index=72&type=chunk) [4Q24 EBITDA and Margin](index=6&type=section&id=4Q24%20EBITDA%20and%20Margin) Q4 2024 EBITDA reached **Ps. 845 million**, a **51.1%** increase, with EBITDA margin improving **63 basis points** to **5.2%** due to sales growth, better gross margin, and other income - Q4 2024 EBITDA reached **Ps. 845 million**, a **51.1%** increase compared to Q4 2023[21](index=21&type=chunk)[72](index=72&type=chunk) - EBITDA margin improved by **63 basis points** to **5.2%**, primarily due to sales growth, improved gross margin, and increased other income from balance sheet clean-up, partially offset by higher administrative expenses[21](index=21&type=chunk)[72](index=72&type=chunk) [4Q24 Financial Costs and Net Loss](index=7&type=section&id=4Q24%20Financial%20Costs%20and%20Net%20Loss) Financial income increased to **Ps. 46 million**, financial costs decreased **35.8%** to **Ps. 333 million** due to debt repayment, and net loss narrowed to **Ps. 24 million** from **Ps. 97 million** in Q4 2023 - Financial income increased to **Ps. 46 million**, primarily from interest income on IPO cash proceeds[25](index=25&type=chunk)[72](index=72&type=chunk) - Financial costs decreased **35.8%** to **Ps. 333 million**, mainly due to the repayment of promissory notes and convertible notes using IPO proceeds, partially offset by increased interest expense on lease liabilities[26](index=26&type=chunk)[72](index=72&type=chunk) - Recorded a foreign exchange gain of **Ps. 105 million**, primarily benefiting from the depreciation of the Mexican Peso against the US Dollar[27](index=27&type=chunk)[72](index=72&type=chunk) - Income tax expense increased to **Ps. 120 million**, leading to a net loss narrowing from **Ps. 97 million** in Q4 2023 to **Ps. 24 million**[27](index=27&type=chunk)[72](index=72&type=chunk) [4Q24 Additional Disclosures](index=6&type=section&id=4Q24%20Additional%20Disclosures) Q4 2024 saw **Ps. 69 million** in non-recurring cash expenses for offering preparation, **Ps. 91 million** in non-recurring non-cash gains from balance sheet clean-up, and a **Ps. 93 million** one-time IFRS 16 depreciation charge - Non-recurring cash expenses totaled **Ps. 69 million**, primarily for subsequent offering preparation and other corporate, legal, compliance, and regulatory matters[23](index=23&type=chunk) - Non-recurring non-cash gains totaled **Ps. 91 million**, including the write-off of **Ps. 123 million** in legacy balance sheet items, partially offset by **Ps. 33 million** in fixed asset write-off depreciation[23](index=23&type=chunk) - These non-recurring items collectively increased reported EBITDA by **Ps. 56 million**[23](index=23&type=chunk) - A one-time recognition of **Ps. 93 million** in IFRS 16 right-of-use asset depreciation was made, correcting prior underestimation[23](index=23&type=chunk) - Building lease cost payments for Q4 2024 were **Ps. 403 million**, an increase from **Ps. 293 million** in Q4 2023[24](index=24&type=chunk) [Financial Performance - Full Year 2024](index=7&type=section&id=Financial%20Performance%20-%20Full%20Year%202024) For the full year 2024, total revenue reached **Ps. 57.44 billion**, up **30.3%**, gross margin improved to **16.3%**, EBITDA grew **51.2%** to **Ps. 2.85 billion**, and the company achieved a net profit of **Ps. 334 million** [Full Year 2024 Consolidated Income Statement](index=7&type=section&id=Full%20Year%202024%20Consolidated%20Income%20Statement) Full-year 2024 total revenue grew **30.3%** to **Ps. 57.44 billion**, driven by increased transactions and average ticket size, with gross margin improving to **16.3%** and EBITDA rising **51.2%** to **Ps. 2.85 billion** Full Year 2024 Consolidated Income Statement Key Data | Metric | 2024 (Ps. million) | 2023 (Ps. million) | Growth (%) | % of Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue (Ps. million) | 57,439 | 44,078 | 30.3% | 100.0% | | Cost of Sales (Ps. million) | (48,063) | (37,039) | 29.8% | 83.7% | | Gross Profit (Ps. million) | 9,376 | 7,040 | 33.2% | 16.3% | | Selling Expenses (Ps. million) | (6,122) | (4,823) | 26.9% | 10.7% | | Administrative Expenses (Ps. million) | (1,987) | (1,387) | 43.3% | 3.5% | | Other (Expenses) Income – Net (Ps. million) | 61 | (36) | 268.6% | 0.1% | | Operating Profit (Ps. million) | 1,329 | 794 | 67.3% | 2.3% | | EBITDA (Ps. million) | 2,847 | 1,883 | 51.2% | 5.0% | | Net Financial Costs (Ps. million) | (611) | (895) | (31.7%) | - | | Income Tax Expense (Ps. million) | (383) | (205) | 86.7% | - | | Net Profit (Loss) (Ps. million) | 334 | (306) | n.m. | 0.6% | [Full Year 2024 Total Revenue](index=8&type=section&id=Full%20Year%202024%20Total%20Revenue) Total revenue for 2024 reached **Ps. 57.44 billion**, a **30.3%** increase, primarily driven by a **25.8%** rise in transaction volume and a **3.6%** increase in average ticket size - Total revenue for 2024 was **Ps. 57,439 million**, a **30.3%** increase compared to 2023[29](index=29&type=chunk)[73](index=73&type=chunk) - Sales growth was primarily driven by a **25.8%** increase in transaction volume (from **533 million** to **671 million**) and a **3.6%** increase in average ticket size (from **Ps. 82.4** to **Ps. 85.4**)[29](index=29&type=chunk) [Full Year 2024 Gross Profit and Margin](index=8&type=section&id=Full%20Year%202024%20Gross%20Profit%20and%20Margin) Gross profit for 2024 increased **33.2%** to **Ps. 9.38 billion**, with gross margin improving **35 basis points** to **16.3%** due to enhanced supplier terms from increased scale - Gross profit for 2024 was **Ps. 9,376 million**, a **33.2%** increase compared to 2023[30](index=30&type=chunk)[73](index=73&type=chunk) - Gross margin improved by **35 basis points** to **16.3%**, primarily due to improved supplier terms from increased scale[30](index=30&type=chunk)[73](index=73&type=chunk) [Full Year 2024 Operating Expenses](index=8&type=section&id=Full%20Year%202024%20Operating%20Expenses) Operating expenses in 2024 included selling expenses up **26.9%** to **Ps. 6.12 billion** and administrative expenses up **43.3%** to **Ps. 1.99 billion**, impacted by store growth, personnel, and IPO-related costs - Selling expenses increased **26.9%** to **Ps. 6,122 million**, with its share of total revenue decreasing from **10.9%** in 2023 to **10.7%** in 2024, mainly due to increased store count and wage inflation[31](index=31&type=chunk)[73](index=73&type=chunk) - Administrative expenses increased **43.3%** to **Ps. 1,987 million**, with its share of total revenue rising from **3.15%** in 2023 to **3.46%** in 2024, primarily due to headquarters personnel recruitment to support growth, public company readiness costs, regional operational expansion, and IPO-related non-recurring expenses[32](index=32&type=chunk)[73](index=73&type=chunk) - Other (expenses) income – net was a net income of **Ps. 61 million**, compared to a net expense of **Ps. 36 million** in 2023, primarily reflecting non-recurring gains from balance sheet clean-up, while 2023 included store impairment losses due to Hurricane Otis[33](index=33&type=chunk)[73](index=73&type=chunk) [Full Year 2024 EBITDA and Margin](index=8&type=section&id=Full%20Year%202024%20EBITDA%20and%20Margin) Full-year 2024 EBITDA reached **Ps. 2.85 billion**, a **51.2%** increase, with EBITDA margin improving **68 basis points** to **5.0%** due to sales growth, better gross margin, and reduced selling expenses - 2024 EBITDA reached **Ps. 2,847 million**, a **51.2%** increase compared to 2023[34](index=34&type=chunk)[73](index=73&type=chunk) - EBITDA margin improved by **68 basis points** from **4.3%** in 2023 to **5.0%** in 2024, primarily due to sales growth, improved gross margin, and reduced selling expenses, partially offset by non-recurring factors and public company transition costs[34](index=34&type=chunk)[35](index=35&type=chunk)[73](index=73&type=chunk) [Full Year 2024 Financial Costs and Net Profit](index=9&type=section&id=Full%20Year%202024%20Financial%20Costs%20and%20Net%20Profit) Financial income increased **498%** to **Ps. 156 million**, financial costs decreased **17.7%** to **Ps. 1.26 billion** due to debt repayment, and the company achieved a net profit of **Ps. 334 million** - Financial income increased to **Ps. 156 million**, a **498%** year-over-year increase, primarily from interest income on IPO cash proceeds[36](index=36&type=chunk)[73](index=73&type=chunk) - Financial costs decreased **17.7%** to **Ps. 1,257 million**, mainly due to the repayment of promissory notes and convertible notes, partially offset by increased interest expense on lease liabilities[37](index=37&type=chunk)[73](index=73&type=chunk) - Recorded a foreign exchange gain of **Ps. 490 million**, primarily from USD-denominated investments[38](index=38&type=chunk)[73](index=73&type=chunk) - Income tax expense increased to **Ps. 383 million**, and the company achieved a net profit of **Ps. 334 million**, reversing a net loss of **Ps. 306 million** in 2023[40](index=40&type=chunk)[73](index=73&type=chunk) [2024 Additional Disclosures](index=9&type=section&id=2024%20Additional%20Disclosures) Full-year 2024 saw **Ps. 139 million** in non-recurring cash expenses for IPO and offering preparation, **Ps. 91 million** in non-recurring non-cash gains from balance sheet clean-up, and a **Ps. 93 million** one-time IFRS 16 depreciation charge - Non-recurring cash expenses totaled **Ps. 139 million**, primarily related to IPO, subsequent offering preparation, and other corporate, legal, compliance, and regulatory matters[39](index=39&type=chunk) - Non-recurring non-cash gains totaled **Ps. 91 million**, including the write-off of **Ps. 123 million** in legacy balance sheet items, partially offset by **Ps. 33 million** in fixed asset write-off depreciation[39](index=39&type=chunk) - These non-recurring items collectively decreased reported EBITDA by **Ps. 16 million**[39](index=39&type=chunk) - A one-time recognition of **Ps. 93 million** in IFRS 16 right-of-use asset depreciation was made, correcting prior underestimation[39](index=39&type=chunk) - Building lease cost payments for 2024 were **Ps. 1,542 million**, an increase from **Ps. 1,072 million** in 2023[39](index=39&type=chunk) [Financial Position and Cash Flow](index=10&type=section&id=Financial%20Position%20and%20Cash%20Flow) As of December 31, 2024, cash and cash equivalents increased to **Ps. 1.45 billion**, with **Ps. 3.06 billion** in short-term USD bank deposits, total assets reaching **Ps. 22.78 billion**, and shareholders' equity turning positive at **Ps. 4.04 billion** [Balance Sheet and Liquidity](index=10&type=section&id=Balance%20Sheet%20and%20Liquidity) As of December 31, 2024, cash and cash equivalents increased to **Ps. 1.45 billion**, with **Ps. 3.06 billion** in short-term USD bank deposits, and shareholders' equity turned positive to **Ps. 4.04 billion** Balance Sheet Key Data as of December 31, 2024 | Metric | 2024 (Ps. thousand) | 2023 (Ps. thousand) | | :--- | :--- | :--- | | Cash & Cash Equivalents (Ps. thousand) | 1,447,166 | 1,220,471 | | Short-term Bank Deposits (Ps. thousand) | 3,058,691 | - | | Inventory (Ps. thousand) | 3,038,373 | 2,357,485 | | Total Current Assets (Ps. thousand) | 8,554,139 | 4,393,160 | | Property, Furniture, Equipment & Leasehold Improvements – Net (Ps. thousand) | 6,455,625 | 4,606,300 | | Right-of-Use Assets – Net (Ps. thousand) | 7,028,346 | 5,520,596 | | Total Assets (Ps. thousand) | 22,776,813 | 14,963,802 | | Suppliers (Ps. thousand) | 8,835,875 | 7,126,089 | | Short-term Debt (Ps. thousand) | 926,765 | 744,137 | | Lease Liabilities (Current) (Ps. thousand) | 750,127 | 537,515 | | Total Current Liabilities (Ps. thousand) | 11,187,416 | 8,951,941 | | Related Party Debt (Non-current) (Ps. thousand) | - | 4,340,452 | | Lease Liabilities (Non-current) (Ps. thousand) | 7,415,363 | 5,706,707 | | Total Liabilities (Ps. thousand) | 18,742,031 | 19,598,650 | | Share Capital (Ps. thousand) | 8,283,347 | 471,282 | | Accumulated Losses (Ps. thousand) | (5,623,409) | (5,957,831) | | Total Shareholders' Equity (Ps. thousand) | 4,034,782 | (4,634,848) | - As of December 31, 2024, cash and cash equivalents were **Ps. 1,447 million**, an increase from **Ps. 1,220 million** as of December 31, 2023[41](index=41&type=chunk)[74](index=74&type=chunk) - The company held **Ps. 3,059 million** in USD-denominated short-term bank deposits[41](index=41&type=chunk)[74](index=74&type=chunk) - The negative working capital cycle continued to generate significant cash flow, supporting the expansion of new stores and distribution centers[42](index=42&type=chunk) [Cash Flow Statement (Full Year 2024)](index=10&type=section&id=Cash%20Flow%20Statement%20%28Full%20Year%202024%29) Operating cash flow increased to **Ps. 3.75 billion** in 2024, investing cash outflow significantly rose to **Ps. 4.91 billion** for bank investments and fixed assets, and financing cash flow turned positive with a **Ps. 1.29 billion** inflow from IPO proceeds Full Year 2024 Cash Flow Statement Key Data | Metric | 2024 (Ps. million) | 2023 (Ps. million) | Growth (%) | | :--- | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities (Ps. million) | 3,749 | 3,140 | 19.4% | | Net Cash Outflow from Investing Activities (Ps. million) | (4,907) | (1,779) | 175.9% | | Net Cash Inflow (Outflow) from Financing Activities (Ps. million) | 1,288 | (1,096) | n.m. | | Net (Decrease) Increase in Cash & Cash Equivalents (Ps. million) | 129 | 266 | (51.3%) | - Net cash inflow from operating activities increased to **Ps. 3,749 million**, primarily due to a favorable inventory days to accounts payable days ratio[43](index=43&type=chunk)[77](index=77&type=chunk) - Net cash outflow from investing activities was **Ps. 4,907 million**, primarily for short-term bank investments from IPO proceeds, and fixed asset investments related to new stores and two distribution centers[44](index=44&type=chunk)[77](index=77&type=chunk) - Net cash inflow from financing activities was **Ps. 1,288 million**, primarily from IPO proceeds, partially offset by the repayment of promissory notes and convertible notes[45](index=45&type=chunk)[77](index=77&type=chunk) [Operational Metrics and Store Performance](index=12&type=section&id=Operational%20Metrics%20and%20Store%20Performance) In 2024, the company opened **484 new stores**, expanded to **16 distribution centers**, achieved **13.4% like-for-like sales growth**, and increased private label sales to **53.6%** of merchandise sales [Key Annual Operating Metrics](index=12&type=section&id=Key%20Annual%20Operating%20Metrics) In 2024, the company opened **484 new stores**, increased distribution centers to **16**, achieved **13.4% like-for-like sales growth**, and saw private label sales rise to **53.6%** of merchandise sales 2024 Key Annual Operating Metrics | Metric | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | New Store Openings | 484 stores | 396 stores | 22.2% | | Number of Distribution Centers | 16 | 14 | 14.3% | | Like-for-like Sales Growth (%) | 13.4% | 17.6% | n.m. | | Private Label Sales as % of Merchandise Sales (%) | 53.6% | 46.5% | 710 bps | | Average Ticket Size (Ps.) | 85.4 | 82.4 | 3.6% | | Number of Transactions | 26,821 | 25,635 | 4.6% | - In 2024, **484 new stores** were opened, a **22.2%** increase from **396 stores** in 2023[46](index=46&type=chunk)[47](index=47&type=chunk) - Full-year 2024 like-for-like sales grew **13.4%**, with Q4 like-for-like sales growing **11.8%**, a slowdown primarily reflecting decreasing inflation[46](index=46&type=chunk)[47](index=47&type=chunk) - Private label sales as a percentage of merchandise sales increased from **46.5%** in 2023 to **53.6%** in 2024[46](index=46&type=chunk)[48](index=48&type=chunk) [Store Performance by Vintage](index=12&type=section&id=Store%20Performance%20by%20Vintage) Store sales curves from 2005 to 2023 show continuous growth across all vintages, with early-opened stores increasing productivity over time and new stores demonstrating synergistic effects without negatively impacting older ones - Store sales curves show a continuous upward trend in sales for stores opened in each vintage from 2005 to 2023[52](index=52&type=chunk) - Inflation-adjusted data indicates that earlier-opened stores consistently increased their productivity over time[52](index=52&type=chunk) - New store openings did not negatively impact sales of older stores, instead demonstrating the company's rigorous strategy in store expansion[52](index=52&type=chunk) [2025 Outlook and Guidance](index=14&type=section&id=2025%20Outlook%20and%20Guidance) The company projects opening **500 to 550 new stores** in 2025, with like-for-like sales growth between **11% and 14%**, and total revenue growth between **26% and 29%**, based on general consensus for the Mexican economy [2025 Guidance](index=14&type=section&id=2025%20Guidance) The company forecasts opening **500 to 550 new stores** in 2025, with like-for-like sales growth between **11% and 14%**, and total revenue growth between **26% and 29%**, subject to economic performance 2025 Performance Guidance | Metric | Range | | :--- | :--- | | Like-for-like Sales Growth (%) | 11% - 14% | | Revenue Growth (%) | 26% - 29% | | New Store Count | 500 - 550 | - The company plans to open **500 to 550 new stores** in 2025[55](index=55&type=chunk) - This guidance is based on a general consensus for the Mexican economic outlook and may be adjusted with changes in economic performance[55](index=55&type=chunk) [Non-IFRS Measures and Definitions](index=15&type=section&id=Non-IFRS%20Measures%20and%20Definitions) This report defines and calculates non-IFRS financial measures such as EBITDA, like-for-like sales, and inventory/accounts payable days, used for management decisions and performance evaluation, not as substitutes for IFRS results [Non-IFRS Measures and Other Calculations](index=15&type=section&id=Non-IFRS%20Measures%20and%20Other%20Calculations) This section provides definitions and calculation methodologies for non-IFRS financial measures including EBITDA, like-for-like sales, and inventory/accounts payable days, used for internal management and performance assessment - EBITDA is calculated as net profit (loss) for the period plus income tax expense, net financial costs, and total depreciation and amortization[60](index=60&type=chunk) - EBITDA margin is calculated by dividing EBITDA by total revenue for the same period[60](index=60&type=chunk) - Like-for-like sales measure merchandise sales revenue from stores that have been operating for at least 12 months in the relevant period[61](index=61&type=chunk)[62](index=62&type=chunk) - Days inventory outstanding measures the average number of days the company holds inventory before selling products[65](index=65&type=chunk) - Days payable outstanding measures the average number of days the company takes to pay suppliers after receiving goods or services[66](index=66&type=chunk) [Corporate Information](index=17&type=section&id=Corporate%20Information) This section provides details on the upcoming conference call, forward-looking statements, company background, and investor relations contact information [Conference Call Details](index=17&type=section&id=Conference%20Call%20Details) Tiendas 3B will host a conference call on April 10, 2025, to discuss Q4 and full-year 2024 results, with participation details and replay information available on the company's investor website - Tiendas 3B will host a conference call on **April 10, 2025**, at 12:00 PM ET (10:00 AM Mexico City time) to discuss Q4 and full-year 2024 results[67](index=67&type=chunk) - Investors can register for the webinar via the provided Zoom link or participate by dialing the specified phone number[67](index=67&type=chunk) - An audio replay of the conference call will be available on the Tiendas 3B website[68](index=68&type=chunk) [Forward-Looking Statements](index=18&type=section&id=Forward-Looking%20Statements) This report contains forward-looking statements based on current beliefs and expectations, which are not guarantees of future performance and may differ materially due to various factors, with no obligation for public updates - This report contains forward-looking statements, based on the company's current beliefs, expectations, and projections of future events and trends[69](index=69&type=chunk) - Forward-looking statements are not guarantees of future performance, and actual results may differ materially from expectations due to various important factors[69](index=69&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, and investors should not rely on these statements for investment decisions[69](index=69&type=chunk) [About Tiendas 3B](index=18&type=section&id=About%20Tiendas%203B) BBB Foods Inc. (Tiendas 3B) is a pioneering and leading discount grocery retailer in Mexico, committed to providing value through high-quality, affordable products, and listed on the NYSE in February 2024 - BBB Foods Inc. (Tiendas 3B) is a pioneer and leader in the discount grocery model in Mexico, and one of the fastest-growing retailers in the country[70](index=70&type=chunk) - The company name '3B' stands for 'Bueno, Bonito y Barato' (Good, Nice, and Cheap), aiming to provide quality products at affordable prices and contribute to the economic well-being of Mexican households[70](index=70&type=chunk) - Tiendas 3B was listed on the New York Stock Exchange in **February 2024** under the ticker symbol **'TBBB'**[70](index=70&type=chunk) [Investor Relations Contact](index=18&type=section&id=Investor%20Relations%20Contact) Investors can contact the investor relations department via email for further information - Investor Relations Contact: Andrés Villasis, Email: **ir@tiendas3b.com**[71](index=71&type=chunk)

Group 1 - BBB Foods Inc. is well-positioned to benefit from the developing hard retail market in Mexico [1] - The company focuses on lower-income groups and has a strong portfolio of private label products [1]

Financial Data and Key Metrics Changes - Total revenues increased by 29.8% year-on-year to reach PS 14.8 billion in Q3 2024 [4][7] - EBITDA for Q3 reached PS 688 million, a 54% year-on-year increase [4][10] - Net cash flows from operating activities for the first nine months reached approximately PS 2.3 billion, a 22.4% increase year-on-year [5] - The company ended the quarter with a net cash position of approximately PS 1.3 billion [5] Business Line Data and Key Metrics Changes - Same-store sales grew by 11.6% year-on-year [4][7] - The company opened 131 net new stores in Q3 2024, bringing the total store count to 2,634 [4][6] - For the first nine months of 2024, the company opened 346 net new stores, a 42% increase compared to the same period last year [6] Market Data and Key Metrics Changes - The company reported flat gross profit margins at 15.8% compared to the same quarter last year [7] - Adjusted negative working capital was 10.3% of total revenue as of September 30, 2024, reflecting operational efficiency [11] Company Strategy and Development Direction - The company aims to meet its guidance of opening between 380 to 420 new stores in 2024 [6][25] - The management expressed confidence in the market's capacity to sustain up to 20,000 stores over time [25] - The company continues to focus on providing the best value for money to customers, which is a key driver of its success [7][21] Management's Comments on Operating Environment and Future Outlook - Management noted that the company continues to perform strongly despite industry deceleration, with same-store sales trends remaining robust [62] - The management emphasized the importance of continuously optimizing pricing strategies to enhance value propositions [80] - The company remains self-funded and is focused on growth without immediate plans for dividends [34][78] Other Important Information - SG&A as a percentage of total revenue decreased by 51 basis points year-on-year from 13.9% to 13.4% [9] - The company has not seen significant impacts from weather conditions, such as rain, on shopping behavior [108] Q&A Session All Questions and Answers Question: Sequential gross margin decline and operating leverage - Management explained that gross margin fluctuations are a result of individual pricing decisions and emphasized that their strategy remains unchanged [20] Question: Store base and competition with Neto - The company has about 1,500 stores near Neto locations and continues to perform strongly against competition [21] Question: Long-term outlook for dividends - Management stated it is too early to discuss dividends but acknowledged significant cash generation potential in the future [34] Question: Productivity of newer stores - Management confirmed that all store vintages continue to perform solidly, with newer stores showing strong trends [36] Question: Breakdown of same-store sales between ticket and traffic - Management indicated that the increase in same-store sales is primarily driven by a notable increase in transactions and average ticket size [44] Question: Impact of rain on demand - Management noted that while rain can affect shopping behavior, they have not seen significant impacts on their sales [108] Question: Relationship with suppliers - Management highlighted that scaling improves supplier relationships, leading to better terms and product offerings [100][101]

Company Overview - BBB Foods Inc. is a Mexican discounted grocery chain with over 2,500 stores across 15 states in Mexico [1] - The name "BBB" stands for "Bueno, Bonito y Barato," which translates to "Good, Nice and Affordable" [1] Investment Potential - The company has been identified as a potential investment opportunity due to its business model focusing on affordability and value [1] - Analysts typically look for companies with above-average dividend yields, undervalued companies, or struggling companies with turnaround potential, which may apply to BBB Foods Inc. [1]

Financial Data and Key Metrics Changes - Total revenues increased by 27.5% year-on-year to reach PS 13.6 billion for the quarter [3][5] - EBITDA reached PS 689 million, reflecting a growth of 43.2% year-on-year [3][7] - Net cash flows from operating activities rose to PS 1.256 billion, an increase of 25% year-on-year [4] - The company ended the quarter with a net cash position of approximately PS 1.2 billion and PS 2.8 billion in short-term bank deposits [4] Business Line Data and Key Metrics Changes - Same-store sales grew by 10.7%, indicating strong underlying demand despite a slowdown compared to the previous year [3][5] - Gross profit margins improved by 60 basis points to reach 16.7% for the second quarter, driven by better supplier terms [5][7] Market Data and Key Metrics Changes - The company opened 121 net new stores in the second quarter, bringing the total store count to 2,503 [3][4] - The company aims to open between 380 and 420 new stores in 2024, with a total of 215 net new stores opened since the beginning of the year [4][9] Company Strategy and Development Direction - The company maintains a decentralized approach to store openings, which has proven effective [9] - The business model focuses on opening new stores, providing excellent value to customers, and continuously improving the value proposition [9] - The company is optimistic about growth opportunities in Mexico, indicating a strong runway for expansion [4][9] Management's Comments on Operating Environment and Future Outlook - Management noted that quarterly sales were slightly impacted by various factors, including the timing of Easter and government payments [5][9] - The company expects to maintain its guidance for sales growth of 28% to 32% [9] - Management emphasized that the strength of the business model lies in its simplicity and efficiency [9] Other Important Information - The company reported an increase in administrative expenses by 45.8%, primarily due to higher personnel costs related to expansion [7] - Adjusted negative working capital stands at 10.2% of total revenue, reflecting operational efficiency [8] Q&A Session Summary Question: Inquiry about gross margin dynamics - Management explained that scaling leads to cost benefits on purchasing, and pricing decisions are made on a product-by-product basis [10][12] Question: Performance of fresh and meat categories - Management stated that tests for meat and fresh produce are encouraging, but no official projections have been shared [16][17] Question: Details on dilution in selling expenses - Management clarified that as the number of stores and sales grow, there will be continued dilution of expenses across the base [20][22] Question: Impact of peso depreciation on cost of goods sold - Management indicated that the impact of peso depreciation on costs is typically a delayed effect [34][40] Question: Percentage of imports versus local production - Management noted that most raw materials are dollarized, and the non-dollarized costs are primarily labor-related [41][42] Question: Return on investment for new stores - Management expressed confidence that returns on new stores will continue to improve due to better brand recognition and value proposition [43][45] Question: Non-cash gains from exchange rate variation - Management confirmed that the company will maintain its overseas investments for the remainder of the year [47][48]

Group 1 - BBB Foods reported earnings per share of 17 cents, exceeding the analyst estimate of -5 cents [1] - The company achieved revenue of $788.12 million, which is 12.99% higher than the analyst estimate of $697.54 million [1]

Financial Data and Key Metrics Changes - In Q1 2024, revenues reached Ps. 12.7 billion, representing a 30.9% growth compared to the same quarter last year [7] - Same-store sales grew by 14.8% and operating cash flow increased by 36.4% [4] - EBITDA grew by 57.9% from Ps. 396 million to Ps. 626 million, with EBITDA margin increasing from 4.1% to 4.9% [9] - The company ended the quarter with a net cash position of Ps. 4.3 billion due to IPO proceeds and organic cash flow generation [4] Business Line Data and Key Metrics Changes - The company opened 94 new stores in Q1 2024, bringing the total to 2,382, a 27% increase in store openings compared to Q1 2023 [5] - The compound annual growth rate of store openings from 2019 to 2023 was maintained at over 15% [5] Market Data and Key Metrics Changes - The company maintains a view that Mexico has the potential for at least 12,000 successful 3B stores [6] - The minimum wage increases have positively impacted the target customer segments [11] Company Strategy and Development Direction - The company aims to continue its growth trajectory by opening between 380 and 420 stores in 2024 and increasing sales by 28% to 32% [11] - The business model focuses on a cycle of opening new stores, enhancing value for customers, and generating cash flow [13] - The company emphasizes maintaining operational efficiency and cost reduction as it scales [12] Management's Comments on Operating Environment and Future Outlook - Management noted a positive halo effect post-IPO, with increased motivation from suppliers and better terms being negotiated [17] - The management believes that the growth in older store vintages will continue due to improved value offerings [27] - The company is committed to organic growth, although it does not rule out potential M&A opportunities in the future [36] Other Important Information - The gross margin increased by 80 basis points, attributed to better supplier terms and scale [7] - The company is continuously testing new SKUs, with around 50 to 60 in pilot mode at any time [60] Q&A Session Summary Question: Are there any tangible benefits post-IPO? - Management noted a significant positive halo effect from suppliers and increased motivation [17] Question: Are there any concerns about the quality of new store openings? - Management stated that all new store openings are performing well and maintaining discipline in their approach [20] Question: Will gross margins trend upwards? - Management indicated that the increase in gross margin is a normal fluctuation and should not be over-interpreted [23] Question: What is the outlook for mature store performance? - Management confirmed that older vintages continue to perform well, driven by improved customer value [27] Question: Is there any change in the competitive landscape? - Management reported no notable changes from competitors adopting their discount model [35] Question: What is the strategy regarding new categories and fresh products? - Management stated that only fully tested products will be introduced, maintaining a disciplined approach [43] Question: How is the company addressing higher labor costs? - Management confirmed ongoing efficiency projects to offset costs, with no new initiatives specifically tied to the IPO [48]

Financial Reporting - BBB Foods Inc. filed its Annual Report on Form 20-F for the fiscal year ended December 31, 2023, on April 30, 2024[4] Company Overview - The company is a leading grocery hard discounter in Mexico, recognized for its rapid sales and store growth rates[5] - Tiendas 3B was listed on the New York Stock Exchange in February 2024 under the ticker symbol "TBBB"[5]

Business Expansion and Growth - The company has expanded its private label offerings to 95 different brands and over 422 SKUs, representing 46.5% of total sales for 2023[57]. - The company has experienced rapid growth since its inception in 2005, primarily in 15 densely populated states in Mexico, but future growth rates are uncertain[47]. - The company became the leading hard discount retailer in Mexico with 2,288 stores and 21,924 employees as of December 31, 2023[174]. - The number of stores increased from 1,249 as of January 1, 2021, to 2,288 as of December 31, 2023, representing a CAGR of 35.3%[184]. - In 2023, the company averaged a new store opening every 22 hours, indicating rapid expansion capabilities[195]. - The company has an estimated white space for at least 12,000 additional Tiendas 3B stores in Mexico, indicating significant growth potential[195]. Financial Performance and Risks - From 2021 to 2023, the company's total revenue grew at a compounded annual growth rate (CAGR) of 38.2%, reaching Ps.44.1 billion (US$2.6 billion) for 2023[184]. - The company maintains a negative working capital position, which is a significant driver of cash flow from operating activities and is used to finance store expansion[67][69]. - If revenues decrease materially or key suppliers change payment terms, the company may not have enough available cash to meet obligations or fund expansion, potentially requiring delays or reductions in business development efforts[70]. - The company faces significant risks related to competition in the fragmented retail food industry, characterized by narrow profit margins and intense pricing pressures[52]. - Economic factors such as unemployment, inflation, and changes in disposable income may adversely affect customer spending and profitability[42]. Supply Chain and Operations - The company relies on a distribution network that is critical for timely and cost-effective delivery of goods, and any disruptions could negatively impact sales and profits[76]. - As of December 31, 2023, all 14 distribution centers were leased, and any delays in opening new facilities or lease terminations could adversely affect financial performance[77]. - The company’s operational results may be impacted by the introduction of new product categories, particularly perishables, which require substantial investment and effective supply chain management[59]. - The company has experienced threats to its information systems, which could result in data loss, litigation, and reputational harm if security breaches occur[80][81]. - The logistics operation is managed by a Distribution Center manager who oversees all logistics and fulfillment matters[228]. Regulatory and Compliance Challenges - The company must navigate various regulatory requirements and potential changes in labor laws that could increase operational costs[55]. - Changes in governmental regulations could materially increase the cost of doing business, with potential penalties for noncompliance that could adversely affect financial performance[89]. - The company is subject to the provisions of the Mexican Industrial Property Law, which may impose additional compliance costs that could adversely affect operations and financial condition[101]. - The company may face increased regulatory and compliance costs if it loses its foreign private issuer status, requiring adherence to more extensive U.S. reporting requirements[149]. Market and Economic Conditions - The company's operations are entirely based in Mexico, making its financial condition and results of operations highly dependent on the economic conditions prevailing in Mexico[105]. - Recent downward revisions of Mexico's sovereign debt rating by major rating agencies could adversely affect the Mexican economy and, consequently, the company's business and financial condition[106]. - The Mexican peso's fluctuations against the U.S. dollar may materially impact the company's earnings, assets, and cash flows, especially since most suppliers' raw materials are dollarized commodities[126]. - Political instability in Mexico, including upcoming presidential elections in June 2024, could significantly affect the company's business operations and financial results[119]. - High inflation rates in Mexico, currently exceeding those of key trading partners like the U.S. and Canada, may negatively impact the company's operations and financial condition[133]. Customer Demographics and Behavior - Approximately 85.0% of the customer base consists of women, primarily aged 30 to 60, with homemakers making up 46.0% of the demographic[219]. - Customers typically visit stores three to four times a week, purchasing enough for a maximum of two days[220]. - The company maintains a no-questions-asked return policy to enhance customer confidence in private label products[222]. Corporate Governance and Structure - The company's principal shareholder, Bolton Partners Ltd., holds approximately 46.4% of the voting power, significantly influencing corporate decisions[135]. - The company does not anticipate paying cash dividends in the foreseeable future, focusing instead on retaining earnings for growth[142]. - The multiple class capital structure may lead to exclusion from major indices, potentially affecting the trading price and market activity of the company's Class A common shares[143]. Internal Controls and Reporting - The company identified material weaknesses in its internal control over financial reporting, which could impact the accuracy of its financial results and trading price of its securities[152]. - The company is in the process of implementing the Internal Control—Integrated Framework (2013 Framework) and aims to remediate identified weaknesses by 2024 without incurring material costs[155]. - The company has been subject to reporting requirements under the Exchange Act and the Sarbanes-Oxley Act since its IPO, which may strain its management and operational resources[156].