BBB Foods Inc. (TBBB) Earnings

Management highlights

### Store Openings - Opened 123 net new stores in the quarter, with 3,469 stores total, and LTM net store openings at 580. - Expansion strategy continues, densifying existing regions and gradually expanding into new ones. ### Revenue Growth - Total revenue in Q1 2026 reached $23 billion pesos, a 33% year-over-year increase. - Same-store sales grew 16%, driven by improved value proposition to customers and stronger brand recognition. ### Expenses and Margins - Selling expenses as a percentage of revenue increased by 5 basis points to 10.3% in Q1 2026, most expense lines showed operating leverage. - EBITDA excluding non-cash share-based payment expense increased 39% to $1.3 billion pesos, adjusted EBITDA margin increased by 22 basis points year over year. ### Business Model - Operates a high-growth business model that is resilient across economic cycles, generates cash, and becomes more competitive as it scales. Market potential is enormous with a long runway for store openings.

Guidance

### Forward-Looking Statements - Accelerated growth continues to be self-funded. - Will continue to invest in talent this year and probably through 2027, with talent investment tapering off in relation to company size as growth progresses. - ERP deployment is well underway, a three-year project with about halfway done, deployed gradually and modularly. - CapEx for the year is about $5.2 billion pesos, including stores, distribution centers, and related equipment, and comfortable with executing on this for the balance of the year.

Segment performance

In the first quarter of 2026, BBB Foods Inc. had revenues of $23 billion pesos, a 33% year-over-year increase. Reported EBITDA was $554 million pesos, and excluding non-cash share-based compensation, EBITDA increased 39% to $1.3 billion pesos. Cash flow from operating activities was $2 billion pesos, a 64% year-over-year increase. They opened 123 net new stores in the quarter, with a total of 3,469 stores, and LTM net store openings at 580. Same-store sales grew 16% versus 2025. Selling expenses as a percentage of revenue increased by 5 basis points to 10.3% year over year. Adjusted negative working capital reached $9.4 billion in 2026 compared to $6.5 billion in 2025, excluding IPO proceeds, representing approximately 11.3% of total LTM revenue, also excluding IPO proceeds.

Analyst Q&A

• Q: Hi, Anthony, Eduardo. Thank you very much and congratulations on the results. We saw a key competitor implementing some adjustments, which they said led to better results in March. Have you seen anything different in the competitive dynamics? Particularly, could you comment if you have seen any change or impact on your sales in March and April? And also a quick clarification from your press release and different filings: we have seen that the expiration of the lockup period is coming on August 6 of this year, but in your 20-F we saw that it expires on July 8. So just to double-check, when exactly does the lockup expire and how should investors think about it in terms of stock overhang?

  A: Hi, Héctor. Good to hear from you. To be super clear, the expiration of the lockup is August 6. In terms of competition, as you know, this is a very competitive market and always has been. Specifically, if we have seen anything different this quarter, the answer is no. Héctor, we will amend the 20-F to be specific on the August 6 date, just so you know.

• Q: Hi. Andrew Rubin from Morgan Stanley. One of the items you mentioned as a same-store sales driver was brand recognition that continues to improve. I am curious first how you measure and identify this. And second, we know it is a minimal marketing approach, so if you can talk about brand building as you move into newer regions and how you compare that brand recognition in your newer versus more dense markets, that would be interesting.

  A: Hi, Andrew. Let me start with the latter part. Brand recognition is an interesting topic. To be very concrete, we conduct large-scale surveys every year. Roughly 15,000 customers and non-customers across a wide geographical area are polled, which gives us a good sense of what the BBB Foods Inc. brand means to most people that are relevant to us. Because of our expansion strategy, which is stretching, by the time we get to a new region, people already know us because we are not jumping to a completely new region. It has been a gradual stretching of the areas in which we operate. That helps a lot when entering something new, as people already know you and might have already shopped at an existing store. In terms of what we spend, you are absolutely right—we have minimal spend on advertising, and it is mostly word-of-mouth and social media. If you search for BBB Foods Inc. on the Internet, you will see a slew of materials talking about BBB Foods Inc. and its products. A large part of it is not us; it is our customers posting about us, and that helps a lot.

• Q: Hey. Good morning, everybody. This is Bob at Bank of America. Anthony, how advanced are you in the process of building out the skill sets and the redundancy in your central administrative staff? Could you also provide us a short update on the progress of the new ERP and the window for your expected deployment? Lastly, I am really excited about your “Irrepetibles.” How are they evolving, and how are you thinking about merchandising in the second quarter, particularly for things like Mother’s Day and the World Cup?

  A: Great. Let me start with “Irrepetibles” as it is fresh in my mind. “Irrepetibles” are very important and add a lot of excitement to the shopping experience in our stores because, as most of you know, these are products that change roughly every two weeks. There is always a treasure-hunt and wow effect in these baskets. We have sold a lot of things in these “Irrepetibles” baskets—bicycles, white and brown goods, clothing—and we continue to do so. It is a very exciting category for us, with tremendous potential and growth. Do not be surprised if you see this continuing to evolve and take more participation within BBB Foods Inc. sales. In terms of hiring and what is happening in central offices, we are very focused on increasing the density of talent as we firmly believe that is what drives everything at the end of the day. If you are going to punch above your weight and move at the speeds at which we move, the key ingredient is talent. We will continue to invest in talent this year and probably through 2027. At some point it tapers off in relation to the total size of the company, but at this stage consider that we are in growth mode, and we think it is an excellent investment for the future. The deployment of the ERP is well underway, and I am very happy with the progress we are seeing. As mentioned in previous calls, it is a three-year project, and we are about halfway through now.

• Q: Bob Ford: Will you deploy in modules? Will there be functionality introduced to the stores before final completion? And when it comes to changing functional POS systems or the hardware at the point of sale, how should we think about that time period?

  A: Yes, deployment is gradual and modular. That is the low-risk way to do it: you deploy, you test, then you expand it. Regarding POS systems and hardware, the deployment is planned to be gradual to minimize risks. You will see it appear in one region, then it will be fine-tuned and refined, and once it is bulletproof, it will be deployed to the rest of the company.

• Q: Alejandro Fuchs from Itaú. Thank you for the space for questions, and congratulations on a very strong start to the year. Two brief ones: First, for Eduardo, could you break down the same-store sales growth between traffic and ticket so we can get a bit more color? Second, for Anthony, could you provide more details on how you are seeing new stores perform outside of central Mexico? How has the relative performance been this quarter between regions, and any differences across parts of Mexico?

  A: Hi, Alejandro. Two-thirds is coming from volume—which is transactions and number of SKUs per ticket—and one-third from average price per SKU. To be clear, the latter is largely driven by a better mix because our internal inflation remains very low. So again, it is two-thirds from volume and one-third from average price per SKU. A: Hi, Alejandro. We have seen very consistent performance across the board in new stores, irrespective of geography. We believe the reason is that we are selling basic goods, and consumption behavior for basic goods tends to be quite similar across the board. We all consume roughly the same amount of toilet paper irrespective of where we live. It has been fairly consistent with no notable changes by region.

• Q: Hi, everyone. This is Gabriela Lamy from Goldman Sachs. I would like to explore SG&A dynamics in the context of the minimum wage increase and the reduction in the workweek in Mexico. Are there measures you have implemented to address the continued increase in labor costs? Also, G&A came broadly stable year over year with revenues. We know there is a variable component as you accelerate expansion. How should we think about that trajectory during the course of the year?

  A: Hi, Gabriela. Multiple questions here. On labor, yes, it is a component, and as you saw in my remarks, for selling expenses we saw leverage in most line items, including labor. Looking at expenses as a percentage of revenue, this continues to decrease. Comparing last year versus this year, labor decreased as a percentage of revenue. The reason is twofold: our sales continue to increase, and we run a number of initiatives in stores and distribution centers. As we have mentioned before, we measure everything in hours worked, so we are always implementing initiatives to reduce hours worked at the store level. Even with the increase in minimum wage, we saw leverage on that line item. Regarding the reduction of hours worked, yes, we have been testing and considering it, and when it happens next year, it is not a big concern for us. We will continue to drive efficiencies at the store level to cope with that eventuality. In terms of overall SG&A for the year, we do not provide guidance. In the long run, SG&A should continue to decrease as a percentage of revenue. For this year, G&A should be fairly stable versus last year. As you heard from Anthony, we will continue to increase our talent pool at headquarters, and as we add more distribution centers this year, that also contributes to admin expenses.

• Q: Hello, Eduardo, Anthony. Froylan Mendez from J.P. Morgan. Eduardo, could you give a little more granularity on the sources of gross margin expansion during the quarter? You mentioned this was mainly coming from commercial margin, but was it improved terms, product mix, or operational efficiencies? And secondly, you mentioned those big surveys you do every year. What have been the key findings from this year’s survey compared to last year regarding changes in consumer habits and preferences, and how is this influencing your strategic decisions at the store?

  A: Let me take the survey question, Froylan. The surveys ask where you shop, how you shop, why you shop, how you make decisions, where you spend your money, and what you think of the brand—what it means, etc. Over time we see increasing brand recognition of BBB Foods Inc. and what it stands for. We also see shifts in decision making—where do you shop first versus second—and the tendencies favor BBB Foods Inc., with a very strong favorable trend over the last five years. In terms of influencing decisions, yes. There are shifts in consumption patterns—some categories gain strength and some lose strength. For example, post-COVID and during COVID, anything related to pets strengthened, and anything related to alcohol consumption decreased. We see those trends and adapt, focusing more on categories with more promise. We do that continuously. A: On gross margin, yes, we mentioned commercial margin increases. It is both mix and efficiencies with our suppliers, but it continues to be volatile. This specific quarter, it is both—mix and supplier-driven efficiencies. A: I will add that as you scale, you improve purchasing power across the board. Not only ours, but our suppliers’ purchasing power and efficiencies improve, and those translate partially into margin and partially into price, driving a virtuous circle.

• Q: Hi. Good morning. Congrats on your results. This is Antonio Hernandez. Just a quick one regarding which categories were best performing during the quarter, and regarding your recent pilots, any findings you can share?

  A: Across the board, all categories performed extremely well this quarter. Looking at some subcategories, we have seen a decrease in sweets and beverages driven by a new tax on sweeteners that took effect in January, but it was more than compensated for by the non-sweetened beverage subcategory. Net-net, an increase across the board in all categories. Regarding pilots like fridges, frozen, and other new product categories in the store, they are doing extremely well. We do not launch a new category unless it has been extensively—maybe obsessively—tested. By the time we launch, we are fairly certain it will do extremely well, and these categories are extremely promising.

• Q: Good morning, Anthony and Eduardo. It is Joe Thomas here from HSBC. Could you talk about the FRESH trial specifically, any sales uplift associated with it, and the opportunity to extend or retrofit existing stores? And on a related topic, CapEx for the year—could you give an update on that and how you expect it to be phased over the quarters?

  A: It is worth stepping back and saying that at any point in time there are about 60 different products or new lines being tested in our stores in parallel. Some make the final cut and are then deployed across the company. In fruits and vegetables specifically, results are promising. The test has been running, fine-tuned, and refined, and we remain optimistic that it is a worthwhile category to have. In test stores, when you add fruits and vegetables, you do see an uplift in ticket—it is normal. We remain excited about this category. A: On CapEx, as we disclosed in our 20-F, it is about $5.2 billion pesos. That includes the number of stores we guided, additional distribution centers, and all related equipment, including trucks and cars. We are comfortable with that number and executing on it for the balance of the year.

• Q: Hi again. Héctor from Scotiabank. Thank you for the chance for another question. I recall that the penetration of private label last quarter was 58% of sales. Could you give us an update on the level this quarter? Also, is there a threshold at which the business starts structurally changing with higher penetration? Would everything remain the same if you operate at 60% private label compared to 70% or 80%? Beyond margin, how would things change with suppliers and their scale? How do you think about development of new SKUs and how you arrange them in the store with higher penetration?

  A: Hi, Héctor. We update this number once a year, but you can imagine the trend continues upwards. Do we see a change in how we operate with more private label? No, not really. Look at BIM, which has been in this market longer than we have; it is like a time machine that gives you a good answer as to what things might look like a few years down the road. For us, there is no structural change if you go from 50% to 60% to 70%. Regarding suppliers, things change naturally as you get bigger. If you are selling 30% more, you are buying 30% more. Everyone has to march in lockstep to sustain that growth, and that has been the case for the last ten years. It will continue in terms of planning ahead, projecting growth and procurement needs, etc. We plan well ahead of time, which has allowed us to sustain growth rates above 30% for over twelve years without hiccups. To do that, you need to be very strong in execution and planning, and I expect that to continue.

• Q: Can you hear me now? Anthony, congratulations on your usual strong results. I know that a strong IT department is one of the pillars of the BBB Foods Inc. growth story. How are you incorporating AI mentality and processes inside the company? Is it relevant?

  A: Great to hear from you, Guli. Earlier there was a question about SG&A and expenses, and I mentioned our investment in talent. A big chunk of that is in IT, with the firm belief that a lot of our future growth is driven by executing across the board on an IT strategy. Sometimes I joke internally that we are an IT company selling groceries. There is a strong component of artificial intelligence starting to take root in the company, similar to many companies. You can already see effects in improved efficiency and time savings across the board. This tendency will continue and get stronger as companies provide better and better tools. The speed of improvement has been staggering, so expect this to become part of normal life at BBB Foods Inc.

• Q: Hi, guys. Federico Galasi here, Recruiting Group. In the last year to year and a half, the corporate business—for more information to the ADR, the new console, etc.—was one of the teams that dragged margins, taking out the operational side. Do you believe that you have the structure necessary to grow in the next eight years?

  A: Sorry, Federico, let me confirm I understood your question. You are asking whether we have built the right central structure to sustain our growth rates going forward beyond the operational side. The answer is yes. We will continue to grow new stores, and our philosophy of planning ahead has served us extremely well and explains how we can sustain such rapid growth over time without hiccups. That applies to everything, including the corporate structure—what talent we need, how many people, and in which areas—so we can execute on our plans and raise performance across the team. We have planned for this, we are executing on it, and we are in very good shape to sustain future growth. We have a strong belief that the team makes the difference. Everyone knows how to sell groceries; it is a question of how well and how fast you execute.