BBB Foods, Inc. Q3 FY2026 earnings call

• Store Expansion: Opened 141 net new stores in Q3, bringing the total store count to 3,765. Year-to-date openings reached 419, with 603 net new stores opened over the last 12 months. Four new distribution centers were added, expanding the network to 25 regions.
• Sales Growth: Same-store sales grew 20.5% year-over-year, significantly outperforming the broader market (Antad) by a gap of more than 21 percentage points. Total revenue increased 40% to 28 billion pesos.
• Operational Efficiency: Operating leverage was observed across most expense lines, including labor and admin expenses. Sales expenses as a percentage of revenue decreased by 36 basis points to 9.8%. Admin expenses (excluding share-based payments) decreased by 6 basis points.
• Cash Flow & Working Capital: The business model features structurally negative working capital, which reached 10.8 billion pesos as of September 2026 (approx. 10.9% of LTM revenue). Operating cash flows for the first nine months reached 7.1 billion pesos, a 128% increase year-over-year, fully funding organic expansion.
• Strategic Drivers: Growth is driven by two engines: continued store network expansion and sustained same-store sales growth supported by an improving value proposition. Newer store vintages are performing better than previous ones, with higher initial sales and faster growth rates.

The provided transcript does not break down financial performance by specific product segments (e.g., Frozen, Dairy, Private Label) in absolute terms or revenue contribution percentages. It reports consolidated Total Revenue of 28 billion pesos, an increase of 40% year-over-year. Reported EBITDA reached 1.3 billion pesos, while Adjusted EBITDA (excluding non-cash share-based compensation) increased 60% to 1.9 billion pesos.

• Store Openings: Management confirmed that the pace of store openings remains well within the annual guidance range of 590 to 630 new stores. No changes to this guidance were made.
• Tax Impact: Regarding Mexico's new corporate tax law limiting deductions, management stated it would mainly affect cash flows temporarily. There are no expected changes to plans for next year based on current information, but final guidance will be provided in the Q4 call after reviewing the final draft of the law.
• General Outlook: Management expressed confidence in significant growth opportunities ahead and the ability to continue executing with increasing efficiency, particularly noting potential optimizations in transportation costs visible in 2027.

• Corporate Tax Reform: A new law in Mexico limiting tax deductions could temporarily impact cash flows, though management expects no immediate changes to operational plans.
• Competition: While management sees healthy trends and notes gaining customers, they acknowledged reading about competitor movements. However, they reported no notable competitive threats impacting their strategy or performance.
• Supply Chain & Logistics: Managing the scale of private label procurement requires proactive supplier management to ensure availability three years out. Interruption risks are mitigated by maintaining redundant suppliers for strategic products.

Q: Andrew Rubin from Morgan Stanley asked if the Q3 store opening pace suggests missing the annual guidance of 590-630 stores, given Q4 is typically heavier. / A: CEO Anthony Hatoum confirmed the company is still well within guidance and that the pipeline looks healthy. He noted that Q4 is historically heavier for openings, so there is no change to the annual guidance.

Q: Hector Maya from Scotiabank asked about the drivers of commercial margin expansion and the impact of Mexico's new corporate tax law on future plans. / A: Hatoum explained that commercial margins expanded due to operating leverage and scale, with a generally healthy upward trend despite seasonal fluctuations. CFO Eduardo Pizzuto added that the new tax law would only temporarily affect cash flows, with no planned changes to next year's operations pending final legislative details.

Q: Irma Sargz from Goldman Sachs requested a breakdown of gross margin pressures related to opening four new distribution centers in Q3. / A: Pizzuto clarified that while pre-opening expenses impacted margins sequentially, the overall year-over-year margin expanded. He noted that pre-opening efficiencies improved, older DCs became more efficient, and transportation costs decreased, offsetting the initial pressure from the new facilities.

Q: Alvaro Garcia from BTG Pactual asked about the strategic identity of Tiendas 3B (convenience vs. grocery) and the rollout strategy for the frozen food category. / A: Hatoum affirmed the store identity remains primarily grocery-focused for pantry shopping, though urban locations may have a convenience component. He described frozen foods as a high-growth category resulting from long-term development, with ongoing dynamic optimization of refrigeration Capex to improve ROIC and value for money.

Q: Vinicius Estrano from UBS asked for a breakdown of same-store sales growth between traffic and ticket, items per basket maturity, and leading categories. / A: Pizzuto stated that two-thirds of growth comes from volume (tickets), with the remainder from price/mix rather than inflation. Items per basket have grown from 2-3 at IPO to 4-5 currently. Leading growth categories include frozen, cosmetics, and dairy, all contributing positively through high rotation and mix improvements.