Company Overview - BBB Foods operates Tiendas 3B, a small-box supermarket concept that combines elements of Aldi and Costco, focusing on providing good, pretty, and cheap products [2][3] - The company has rapidly expanded to 2,772 locations across North America, making it the fastest-growing player in its sector [1][3] Financial Performance - Revenue increased by 30% last year, reaching nearly $2.8 billion, with a further 33% growth in the latest quarter [5] - Same-store sales surged by 17.6% in 2023, building on a 13.3% increase from the previous year [5] - The company turned profitable last year, achieving operating free cash flow for the first time [6] Market Position - BBB Foods' net margin was 0.6% last year, which is low compared to industry leaders like Costco, but the company is expected to improve profitability as it scales [9] - The gross margin for BBB's stores is 16.3%, which is competitive compared to traditional supermarket chains [11] Growth Strategy - The company opened 484 net new stores last year, indicating a strong focus on expansion [5] - Private label products have increased from 46.5% to 53.6% of sales, suggesting growing consumer trust and negotiation power with suppliers [10] Valuation - BBB Foods' stock is trading at 79 times forward earnings and 55 times next year's target, indicating a premium valuation compared to traditional supermarket operators [13] - The market cap is roughly equivalent to its trailing sales, which is higher than traditional supermarkets but lower than Costco's valuation [13][14]

Core Viewpoint - Kroger may be riskier now than in many years, suggesting a shift in the grocery retail landscape that could impact investor confidence [1] Group 1: Company Analysis - Kroger's current risk profile is highlighted, indicating potential challenges that may affect its stock performance [1] - BBB Foods is presented as a more favorable grocery stock option for investors, implying a comparative analysis of growth potential and stability [1] Group 2: Market Context - The discussion reflects broader trends in the grocery industry, emphasizing the need for investors to reassess their positions in light of changing market dynamics [1]

Core Viewpoint - The announcement of a tariff plan by the president has led to a significant drop in the stock market, increasing the likelihood of a recession in the United States according to many experts [1]. Group 1: Market Reaction - The stock market has experienced a considerable decline following the president's tariff announcement [1]. - Experts believe that the probability of a recession in the United States has sharply increased due to the market's reaction [1]. Group 2: Investment Opportunities - Despite the likelihood of a recession, contributors from Fool.com discuss stocks that they would consider buying at this time [1].

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]