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01/11 08:15
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary highlights strong revenue growth, positive same-store sales trends, and an optimistic outlook for new store openings. Management's confidence in maintaining growth, coupled with strategic allocation of savings and expansion plans, supports a positive sentiment. Despite some uncertainties in guidance, the overall tone is favorable, with no significant competitive threats and strong brand recognition. The positive sentiment is further reinforced by the anticipated operational leverage and successful product mix adaptation, leading to a likely stock price increase in the short term.
Net new stores opened 131 net new stores opened in the quarter, totaling 3,162 stores. This is part of a larger trend of increasing store openings, with 390 stores opened in the first 9 months of 2025 compared to 346 stores in the same period last year.
Distribution centers 2 new distribution centers opened in the quarter, bringing the total to 18.
Same-store sales growth Same-store sales grew by 17.9% year-over-year, driven by continuous improvement in the value proposition to customers and increased consumer awareness.
Total revenues Total revenues increased by 36.7% year-over-year to reach MXN 20.3 billion, supported by strong same-store sales growth and rapid revenue growth.
EBITDA Reported a loss of MXN 404 million. However, excluding noncash share-based payments, EBITDA increased by 43.6% to reach a positive MXN 1.2 billion, driven by sales and margin growth as well as operational efficiency.
Cash flow from operating activities Cash flow generated by operating activities reached MXN 3 billion for the first 9 months of 2025, a 30% increase year-over-year.
Net cash position Ended the quarter with a net cash position of approximately MXN 1.1 billion, in addition to $151 million in short-term deposits.
Sales expenses as a percentage of revenue Increased slightly from 10.1% to 10.2%, influenced by real operational leverage and an increase in D&A expenses as a percentage of revenue.
Admin expenses (excluding share-based payments) Increased by 16 basis points due to investments in new regions and hiring more talent.
Negative working capital Negative working capital increased to MXN 7.8 billion in September 2025, compared to MXN 5.4 billion in the third quarter of 2024, excluding IPO proceeds. This represents roughly 10.8% of total revenue, excluding IPO proceeds.
Same-store sales growth: Same-store sales grew by 17.9%, driven by continuous improvement in value proposition and product quality.
Revenue growth: Total revenues increased by 36.7% year-over-year to MXN 20.3 billion.
Store expansion: Opened 131 net new stores in Q3 2025, totaling 3,162 stores. Opened 390 stores in the first 9 months of 2025, compared to 346 stores in the same period last year.
Distribution centers: Opened 2 new distribution centers, bringing the total to 18.
Operational efficiency: EBITDA increased by 43.6% to MXN 1.2 billion (excluding noncash share-based payments). Older stores show EBITDA margins comparable to other hard discounters.
Cash flow: Cash flow from operating activities increased by 30% year-on-year to MXN 3 billion. Net cash position is approximately MXN 1.1 billion, with $151 million in short-term deposits.
Talent investment: Investing in talent density and share-based compensation to attract entrepreneurial talent and align with shareholders.
Future growth potential: Significant runway for expansion with potential for 14,000 stores in Mexico. Continuous improvements in product quality and pricing drive growth.
EBITDA Loss: The company reported an EBITDA loss of MXN 404 million, which could indicate challenges in achieving profitability despite revenue growth.
Increased Sales Expenses: Sales expenses as a percentage of revenue increased from 10.1% to 10.2%, which may impact overall margins and operational efficiency.
Higher Depreciation and Amortization (D&A) Expenses: D&A expenses as a percentage of revenue increased, potentially affecting profitability in the short term.
Expansion Costs: The company is investing heavily in opening new stores and distribution centers, which could strain financial resources and operational capacity.
Administrative Expense Growth: Admin expenses, excluding share-based payments, increased by 16 basis points due to investments in new regions and hiring more talent, which could pressure margins.
Negative Working Capital: The business model generates significant negative working capital, which, while supporting cash flow, could pose liquidity risks if not managed effectively.
Dependence on Share-Based Compensation: The reliance on share-based compensation to attract and retain talent could lead to dilution of shareholder value and may not be sustainable long-term.
Store Growth: The company plans to expand significantly, with a potential for no less than 14,000 3B stores in Mexico. They are currently accelerating the pace of store openings.
Same-Store Sales Growth: Same-store sales growth is expected to continue outpacing inflation, driven by continuous improvements in product quality and pricing.
EBITDA Margins: Older store vintages are already achieving EBITDA margins comparable to other listed hard discounters. EBITDA is expected to naturally increase over time due to operational efficiencies and business model improvements.
Talent Investment: The company will continue investing in talent, emphasizing its importance as a key success factor.
Share-Based Compensation: The Board of Directors decided not to make additional reserves for the equity incentive plan for 2026, maintaining the current approach to align talent with shareholder interests.
The selected topic was not discussed during the call.
The earnings call summary highlights strong revenue growth, positive same-store sales trends, and an optimistic outlook for new store openings. Management's confidence in maintaining growth, coupled with strategic allocation of savings and expansion plans, supports a positive sentiment. Despite some uncertainties in guidance, the overall tone is favorable, with no significant competitive threats and strong brand recognition. The positive sentiment is further reinforced by the anticipated operational leverage and successful product mix adaptation, leading to a likely stock price increase in the short term.
The earnings call summary indicates strong financial performance with significant store openings, increased private label penetration, and optimistic revenue and same-store sales growth guidance. The Q&A section provides additional insights, highlighting minimal inflation impact, successful meat and produce pilots, and growing brand resonance among higher-income segments. Although there are concerns about lease expenses and management's vague response on same-store sales sustainability, the overall sentiment is positive. The company's expansion strategy and strong guidance suggest a potential stock price increase.
The earnings call showed strong financial performance with a 35% revenue increase and a 49% rise in operating cash flow. Despite a slight margin decline, the optimistic guidance on talent investments, store expansions, and new tech systems suggests growth. The Q&A highlighted management's confidence in their strategic investments and stable consumer environment. Although there were concerns about unclear responses on labor costs and stock dilution, the overall sentiment leans positive due to the robust financial metrics and strategic growth initiatives.
The earnings call highlighted strong financial performance with significant revenue growth and EBITDA margin expansion. Despite potential risks like economic uncertainty and supply chain challenges, the company maintains a positive outlook with plans for substantial new store openings and revenue growth in 2025. The Q&A session revealed confidence in expansion strategy and competitive positioning. However, the lack of a share buyback program and increased SG&A expenses are slight negatives. Overall, the positive financial results and optimistic guidance suggest a positive stock price movement.
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