BBB Foods(TBBB) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2025, total revenues increased by 34% year-over-year to MXN 22 billion, while full-year revenues grew by 36% to MXN 78 billion [4][6] - Same-store sales grew by 16.6% in Q4 and 18.3% for the full year [4][6] - Reported EBITDA for Q4 was MXN 79 million, but adjusted EBITDA, excluding non-cash share-based compensation and a one-time asset write-off, increased by 23% to MXN 1.2 billion [4][11] - For the full year, adjusted EBITDA increased by 30% to MXN 4.4 billion, with a CAGR of 42% over the last four years [5][12] Business Line Data and Key Metrics Changes - The company opened 184 net new stores in Q4, totaling 574 net openings for the year, exceeding guidance of 500-550 stores [4][5] - Private label products represented 58% of total merchandise sales in 2025, up from 54% in 2024 [9] Market Data and Key Metrics Changes - The company is positioned as one of the fastest-growing retailers in Latin America, with a revenue CAGR of 35% over the last four years [6] - The gap in same-store sales performance compared to ANTAD remains significant, exceeding 15 percentage points [6][7] Company Strategy and Development Direction - The company continues to focus on rapid and disciplined store expansion while enhancing its value proposition for customers [3][4] - The strategy includes densifying existing regions and gradually expanding into new ones, supported by the opening of new distribution centers [5][6] - The company is targeting a payback period of about 26 months with a cash-on-cash return of roughly 55% by year three for new stores [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth opportunities, highlighting the resilience of the business model across economic cycles [15][93] - The company expects same-store sales growth between 13% and 16% and revenue growth between 29% and 32% for 2026 [13] Other Important Information - Cash flow generated from operating activities reached MXN 4.7 billion, representing a nearly 25% increase year-over-year [5] - The company recorded a one-time charge of MXN 230 million related to the write-off of an accounts receivable balance due to a terminated relationship with a payment terminal provider [11] Q&A Session Summary Question: Stock-based compensation and future awards - Management confirmed that the stock options granted in 2025 are the total number expected for the year, with no additional awards anticipated [20][21] Question: Traffic and ticket dynamics - Management indicated that two-thirds of same-store sales growth is driven by volume and one-third by average price, with a positive trend in ticket size [28] Question: New unit economics and CapEx - Management clarified that the new unit economics do not currently account for potential incremental revenue from new initiatives associated with higher CapEx [23] Question: Operating leverage and G&A expenses - Management expects G&A expenses to decline as a percentage of sales over the long term, despite recent structural investments [63][64] Question: Expansion and new regions - Management reported consistent performance across all regions and expressed excitement about growth opportunities without identifying underperforming areas [89]