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BBB Foods (TBBB) Q2 Earnings call transcript Aug 22, 2024

AInvestFriday, Aug 23, 2024 8:20 pm ET
2min read

Tiendas 3B, a leading retailer in Mexico, recently held its second-quarter 2024 earnings call, highlighting the company's impressive performance and growth trajectory. The call, led by CEO Anthony Hatoum and CFO Eduardo Pizzuto, provided valuable insights into the company's operational and financial achievements, offering a clear picture of Tiendas 3B's robust growth and strategic direction.

Strong Quarterly Performance and Store Expansion

Tiendas 3B reported a remarkable quarter with a 10.7% increase in same-store sales and a 27.5% year-on-year growth in total revenues, reaching MXN 13.6 billion. The company's expansion efforts were also noteworthy, with the opening of 121 net new stores and one new distribution center, bringing the total store count to 2,503 as of June 30, 2024. This growth is a testament to the company's successful strategy and the continued demand for its offerings.

Financial Health and EBITDA Growth

Eduardo Pizzuto, the CFO, highlighted the company's strong financial health, with EBITDA reaching MXN 689 million, a 43.2% increase from the previous year. This growth is attributed to the company's sales growth, gross margin expansion, and efficient working capital management. The net cash flows provided by operating activities rose by 25% year-on-year, reaching MXN 1.256 billion, and the company ended the quarter with a net cash position of approximately MXN 1.2 billion, with additional MXN 2.8 billion in short-term bank deposits.

Strategic Focus on Store Openings and Growth

Tiendas 3B is maintaining its guidance to open between 380 and 420 new stores and grow sales by 28% to 32%. The company's decentralized approach to store openings has proven effective, as evidenced by the 215 net new stores opened since the beginning of the year. Despite minor challenges such as the Easter weekend occurring in Q1 of 2024, the company's same-store sales growth remained solidly above industry average. This growth is self-funded through the company's positive EBITDA margins and efficient working capital management.

Gross Margin Improvements and Future Outlook

Anthony Hatoum emphasized the company's focus on gross margin improvements, which reached 16.7% for the second quarter. This growth is attributed to improved supplier terms and the scaling of operations. The company remains optimistic about its future growth prospects, with a focus on increasing sales per store and attracting more customers. The management's confidence in the company's growth trajectory is palpable, providing a positive outlook for investors.

Conclusion

Tiendas 3B's second-quarter 2024 earnings call painted a picture of a company in a strong financial position, with a clear growth strategy and a focus on operational efficiency. The company's achievements in store expansion, financial performance, and strategic initiatives bode well for its future prospects. The management's confidence and optimism for the company's growth trajectory are a testament to the robustness of Tiendas 3B's business model and its ability to navigate market challenges. With a solid foundation and a clear growth strategy, Tiendas 3B is well-positioned for continued success.

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