BBB Foods (TBBB) Q3 Earnings call transcript Nov 26, 2024
2min read Tiendas 3B, a leading retailer in Mexico, recently reported its third-quarter earnings for 2024, showcasing robust growth and operational efficiency. The company's strategic expansion and focus on value proposition have led to a strong financial performance and a positive outlook for the future.
Key Highlights from the Earnings Call
During the earnings call, Chief Executive Officer Anthony Hatoum and Chief Financial Officer Eduardo Pizzuto provided a comprehensive update on Tiendas 3B's financial performance and operational achievements. Some of the key highlights from the call include:
Revenue Growth: The company's total revenue grew by 29.8% year-on-year, reaching MXN 14.8 billion. This growth was driven by an increase in same-store sales of 11.6% and the contributions from new stores opened in the last 24 months. Store Expansion: Tiendas 3B opened 131 net new stores in the third quarter, bringing the total store count to 2,634. The company is on track to meet its guidance of opening 380 to 420 new stores in 2024. Operational Efficiency: The company's operating expenses as a percentage of revenue decreased by 51 basis points year-over-year, reflecting its ongoing efforts to optimize expenses. This improvement in efficiency, coupled with strong sales growth, contributed to a 54% year-on-year increase in EBITDA to MXN 688 million. Financial Position: Tiendas 3B ended the quarter with a net cash position of approximately MXN 1.3 billion and an additional MXN 2.9 billion in short-term U.S. bank denominated positions. This strong financial position allows the company to continue self-funding its growth initiatives.
Investor Concerns and Management's Response
During the Q&A session, investors and analysts raised several questions, primarily focusing on gross margins, the impact of competition, and the pace of store openings. Management's responses provided valuable insights into the company's strategic approach and financial performance.
For instance, when asked about the sequential decline in gross margins, CEO Anthony Hatoum clarified that this was not a cause for concern, as it was a result of the company's pricing strategy and market dynamics. He also emphasized the importance of offering the best value proposition to customers, which has been a key driver of the company's success.
In response to questions about competition, particularly from Netto, management reiterated their confidence in the company's value proposition and competitive positioning. They highlighted the strong performance of their stores, despite the presence of competitors, and expressed optimism about the company's ability to attract and retain customers.
Regarding the pace of store openings, management indicated that they are on track to meet their guidance and are planning for increased store openings in the future. This expansion is expected to be self-funded, demonstrating the company's financial strength and commitment to growth.
Looking Ahead
Tiendas 3B's strong third-quarter performance and strategic initiatives position the company well for continued growth and success. The company's focus on operational efficiency, store expansion, and customer value proposition are expected to drive future performance and sustain its competitive advantage in the retail sector.
As the company moves forward, investors and analysts will be watching closely for updates on store openings, gross margins, and the impact of competition. However, based on the company's historical performance and management's strategic direction, the outlook for Tiendas 3B remains positive.