BBB Foods(TBBB) - 2025 Q1 - Quarterly Report

Report Overview Company Information 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][70] - 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] Key Highlights 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 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] - Like-for-like sales grew 13.4%, again outperforming the market, driven by increasing value for customers, rigorous execution, and efficient store expansion[9] - In 2025, the company will focus on expanding its footprint, enhancing capabilities, and continuously providing exceptional value to Mexican households[12] Financial Performance - Fourth Quarter 2024 (4Q24) 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 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 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][72] - 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] 4Q24 Gross Profit and Margin 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][72] - Gross margin improved by 18 basis points to 16.5%, primarily due to improved supplier terms from increased scale[16][72] 4Q24 Operating Expenses 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][72] - 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][19][72] - 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][72] 4Q24 EBITDA and Margin 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][72] - 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][72] 4Q24 Financial Costs and Net Loss 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][72] - 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][72] - Recorded a foreign exchange gain of Ps. 105 million, primarily benefiting from the depreciation of the Mexican Peso against the US Dollar[27][72] - 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][72] 4Q24 Additional Disclosures 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] - 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] - These non-recurring items collectively increased reported EBITDA by Ps. 56 million[23] - A one-time recognition of Ps. 93 million in IFRS 16 right-of-use asset depreciation was made, correcting prior underestimation[23] - Building lease cost payments for Q4 2024 were Ps. 403 million, an increase from Ps. 293 million in Q4 2023[24] Financial Performance - Full Year 2024 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 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 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][73] - 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] Full Year 2024 Gross Profit and Margin 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][73] - Gross margin improved by 35 basis points to 16.3%, primarily due to improved supplier terms from increased scale[30][73] Full Year 2024 Operating Expenses 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][73] - 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][73] - 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][73] Full Year 2024 EBITDA and Margin 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][73] - 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][35][73] Full Year 2024 Financial Costs and Net Profit 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][73] - 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][73] - Recorded a foreign exchange gain of Ps. 490 million, primarily from USD-denominated investments[38][73] - 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][73] 2024 Additional Disclosures 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] - 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] - These non-recurring items collectively decreased reported EBITDA by Ps. 16 million[39] - A one-time recognition of Ps. 93 million in IFRS 16 right-of-use asset depreciation was made, correcting prior underestimation[39] - Building lease cost payments for 2024 were Ps. 1,542 million, an increase from Ps. 1,072 million in 2023[39] Financial Position and Cash Flow 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 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][74] - The company held Ps. 3,059 million in USD-denominated short-term bank deposits[41][74] - The negative working capital cycle continued to generate significant cash flow, supporting the expansion of new stores and distribution centers[42] Cash Flow Statement (Full Year 2024) 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][77] - 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][77] - 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][77] Operational Metrics and Store Performance 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 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][47] - 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][47] - Private label sales as a percentage of merchandise sales increased from 46.5% in 2023 to 53.6% in 2024[46][48] Store Performance by Vintage 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] - Inflation-adjusted data indicates that earlier-opened stores consistently increased their productivity over time[52] - New store openings did not negatively impact sales of older stores, instead demonstrating the company's rigorous strategy in store expansion[52] 2025 Outlook and Guidance 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 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] - This guidance is based on a general consensus for the Mexican economic outlook and may be adjusted with changes in economic performance[55] Non-IFRS Measures and Definitions 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 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] - EBITDA margin is calculated by dividing EBITDA by total revenue for the same period[60] - Like-for-like sales measure merchandise sales revenue from stores that have been operating for at least 12 months in the relevant period[61][62] - Days inventory outstanding measures the average number of days the company holds inventory before selling products[65] - Days payable outstanding measures the average number of days the company takes to pay suppliers after receiving goods or services[66] Corporate Information This section provides details on the upcoming conference call, forward-looking statements, company background, and investor relations contact information Conference Call Details 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] - Investors can register for the webinar via the provided Zoom link or participate by dialing the specified phone number[67] - An audio replay of the conference call will be available on the Tiendas 3B website[68] Forward-Looking Statements 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] - Forward-looking statements are not guarantees of future performance, and actual results may differ materially from expectations due to various important factors[69] - 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] About Tiendas 3B 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] - 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] - Tiendas 3B was listed on the New York Stock Exchange in February 2024 under the ticker symbol 'TBBB'[70] Investor Relations Contact Investors can contact the investor relations department via email for further information - Investor Relations Contact: Andrés Villasis, Email: ir@tiendas3b.com[71]