Q3 2025 BBB Foods Inc Earnings Call
My name is Daniela and I will be your conference operator.
Welcome to the Investor is the third quarter 2025 conference call.
All lines have been placed on mute to prevent any background noise.
There will be a question and answer session. After the Speakers' remarks, and instructions will be given at that time.
Please ensure that your full name is displayed correctly on zoom.
If not please take a moment to edit and enter your display name.
Also please note that this call is for investors and analysts only.
<unk> from the media will not be taken nor should the call will be reported on.
Any forward looking statements made during this conference call are based on information that is currently available to us.
Today, we are joined by the industry's best Chairman and Chief Executive Officer, Anthony <unk>, and Chief Financial Officer, and a lot of obesity.
I will now turn the call over to Anthony. Please go ahead.
Good morning, everyone and thank you for joining <unk> third quarter earnings call.
I will begin with a review of our operating results for the quarter.
And it will be followed by our CFO Eduardo peaceful.
We will provide an overview of our financial performance.
We will conclude with a Q&A session.
We delivered another quarter of exceptional growth outperforming other listed players.
We opened 131 net new stores in the quarter for a total of 3162 stores.
We opened two distribution centers in the quarter for now a total of 18.
Operator: Good morning, everyone. My name is Daniela, and I will be your conference operator. Welcome to Tiendas 3B Q3 2025 conference call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session after the speaker's remarks, and instructions will be given at that time. Please ensure that your full name is displayed correctly on Zoom. If not, please take a moment to edit and enter your display name. Also, please note that this call is for investors and analysts only. Questions from the media will not be taken, nor should the call be reported on. Any forward-looking statements made during this conference call are based on information that is currently available to us. Today, we are joined by Tiendas 3B's Chairman and Chief Executive Officer Anthony Hatoum, and Chief Financial Officer Eduardo Pizzuto. I will now turn the call over to Anthony.
Our LTM store openings are 528 stores.
Same store sales grew by 17, 9%.
Total revenues increased by 36, 7% to reach 23 billion pesos.
EBITDA reported a loss of $404 million vessels.
If we exclude our noncash share based payments than EBITDA increased by 43, 6%.
And reached a positive $1 2 billion pesos.
For the nine months of 2025 cash flow generated by operating activities reached 3 billion pesos or 30% increase year on year.
We ended with a net cash position of approximately $1 1 billion vessels.
In addition to this we have $151 million in short term deposits.
Let's turn to operational performance.
Operator: Please go ahead.
Anthony Hatoum: Good morning, everyone, and thank you for joining Tiendas 3B's Q3 earnings call. I will begin with a review of our operating results for the quarter, and it will be followed by our CFO, Eduardo Pizzuto, who will provide an overview of our financial performance. We will conclude with a Q&A session. We've delivered another quarter of exceptional growth, outperforming other listed players. We opened 131 net new stores in the quarter for a total of 3,162 stores. We opened two distribution centers in the quarter for now a total of 18. Our LTM store openings are 528 stores. Same-store sales grew by 17.9%. Total revenues increased by 36.7% to reach MXN 20.3 billion. EBITDA reported a loss of MXN 404 million. If we exclude our non-cash share-based payments, then EBITDA increased by 43.6% and reached a positive MXN 1.2 billion.
We are increasing the number of store openings.
And the first nine months of 2025, we opened 390 stores.
This compares to 346 stores opened in the first nine months of last year.
Revenue growth remains rapid.
We continue to be one of the fastest growing retailers globally.
Total revenues reached 23 billion pesos or an increase of 36, 7% year over year.
This with a very strong same store sales growth of 17, 9%.
Same store sales is being driven by the continuous improvement of our value proposition to customers and.
And more consumers are realizing that.
When comparing two arms Todd R gap continues to increase.
Our GAAP versus on Todd is almost 17 percentage points today.
I will now pass the microphone to Edward.
Thank you Anthony good morning, everyone.
We opened 131 net. New stores in the quarter for a total of 3,162 stores.
<unk> expenses as a percentage of revenue increased from $10 one to 10, 2%.
We opened 2 distribution centers in the quarter for now, a total of 18.
Anthony Hatoum: For the nine months of 2025, cash flow generated by operating activities reached MXN 3 billion, or a 30% increase year-on-year. We ended with a net cash position of approximately MXN 1.1 billion. In addition to this, we have $151 million in short-term deposits. Let's turn to operational performance. We are increasing the number of store openings. In the first nine months of 2025, we opened 390 stores. This compares to 346 stores opened in the first nine months of last year. Revenue growth remains rapid. We continue to be one of the fastest-growing retailers globally. Total revenues reached MXN 20.3 billion, or an increase of 36.7% year-over-year. This with a very strong same-store sales growth of 17.9%. Same-store sales is being driven by the continuous improvement of our value proposition to customers, and more consumers realizing that. When comparing to Antad, our gap continues to increase.
On one hand, we see real operational leverage as a store mature on the other we see this quarter an increase in D&A expenses as a percentage of revenue.
Our LTM store openings are 528 stores.
Same store, sales grew by 17.9%.
I expect that next quarter, the comparison will be more favorable.
Total revenues increased by 36.7% to reach 20.3 billion pesos.
Admin expenses, excluding share based payments increased by 16 basis points due to investments in new regions and hiring more talent.
IBA reported, a loss of 404 million pesos.
With respect to share based payment expense. These are noncash and already reflected in our fully diluted share count. Please.
If we exclude our non-cash share-based payments, then IBA increased by 43.6%.
And reached a positive, 1.2 billion pesos.
Please see the appendix of this earnings release.
You can also see the projections of this noncash expense in the appendix.
For the 9 months of 2025 cash flow generated by operating activities, reached 3 billion pesos or a 30% increase year on year.
EBITDA increased 43, 6% to reach five 8% driven by sales and margin growth and operational efficiency.
We ended with a net cash position of approximately 1.1 billion pesos.
I want to touch on operational leverage and margins.
In addition to this, we have 151 million in short-term deposits.
Close to half of our stores were opened in the last three years.
When we look at our older vintages their EBITDA margins are close to those you would see at other hard discounters.
Let's turn to operational performance.
We are increasing the number of store openings.
As you know, we don't drive EBITDA it will naturally increase over time as a consequence of all the good things we're doing.
In the first 9 months of 2025, we opened 390 stores.
This compares to 346 stores opened in the first 9 months of last year.
Ours is a business model that generates significant negative working capital and in turn we generate significant cash flow from the changes in negative working capital.
Revenue growth remains rapid.
Anthony Hatoum: Our gap versus Antad is almost 17% today. I will now pass the microphone to Eduardo.
We continue to be 1 of the fastest growing retailers globally.
We can see for example that in September 25, we had $7 8 billion compared to a negative working capital of $5 4 billion vessels in the third quarter of 2004, excluding IPO proceeds.
Total revenues reached 20.3 billion pesos or an increase of 36.7% year-over-year.
Eduardo Pizzuto: Thank you, Anthony. Good morning, everyone. Sales expenses as a percentage of revenue increased from 10.1% to 10.2%. On one hand, we see real operational leverage as our store matured. On the other, we see this quarter an increase in DNA expenses as a percentage of revenue. I expect that next quarter, the comparison will be more favorable. Admin expenses, excluding share-based payments, increased by 16 basis points due to investments in new regions, and hiring more talent. With respect to share-based payment expense, these are non-cash, and already reflected in our fully diluted share count. Please see the appendix of this earnings release. You can also see the projection of this non-cash expense in the appendix. EBITDA increased 43.6% to reach 5.8%, driven by sales and margin growth, and operational efficiency. I want to touch on operational leverage and margins.
We are roughly at 10, 8% of total revenue.
With a very strong same store, sales growth of 17.9%.
Excluding IPO proceeds.
I will now turn the call back over to Anthony for some final remarks.
Same store sales is being driven by The Continuous Improvement of our value proposition to customers.
and more consumers, realizing that
We are hitting or exceeding our targets with same store sales that standout versus industry.
When?
Comparing to antad, our Gap continues to increase.
Our business is robust non cyclical and battle tested.
Our Gap versus Saint is almost 17% points today.
In terms of store growth, we have significant runway with room for no less than 14000 <unk> stores in Mexico.
I will now pass the microphone to it. What?
Today, we are opening more stores at faster.
Thank you. Anthony. Good morning, everyone.
Our same store sales growth is not only due to our newer stores or older vintages continued to grow their same store sales faster than inflation.
Self-expenses as a percentage of revenue increased from 10.1% to 10.2%.
This is driven by the continuous improvements in the products, we sell both in terms of quality and price.
Expenses as a percentage of Revenue.
I expect that Nest will compare more favorably.
Our brand equity continues to strengthen.
This drives a faster sales ramp up of our newer stores and draws new clients to our stores.
Eduardo Pizzuto: Close to half of our stores were open in the last three years. When we look at our older vintages, their EBITDA margins are close to those you would see at other hard discounters. As you know, we don't drive to an EBITDA. It will naturally increase over time as a consequence of all the good things we are doing. Our business model generates significant negative working capital, and in turn, we generate significant cash flow from the changes in negative working capital. We can see, for example, that in September 2025, we had MXN 7.8 billion compared to a negative working capital of MXN 5.4 billion in Q3 2024, excluding IPO proceeds. We are roughly at 10.8% of total revenue, excluding IPO proceeds. I will now turn the call back over to Anthony for some final remarks.
Admin expenses, excluding share-based payments, increased by 16 basis points due to investments in new regions and hiring new talent.
Our older vintages are already showing EBITDA margins that are in line with those reported by other listed hard discounters.
With respect to share-based payment expense, these are non-cash.
And already reflected in our fully diluted share account.
Okay.
Please see the appendix of this earnings release.
We continue to invest in talent.
We believe that this is a key success factor.
You can also see the projection of this non-cash expense in the appendix.
The talent density within our teams tons out in the market.
Our share based compensation approach has been a key driver to our success.
If that increased 43.6% to reach 5.8%, driven by sales and margin growth and operational efficiency.
It attracts entrepreneurial talent and aligns everyone with shareholders.
I want to touch on operational leverage and margins.
Close to half of our stores were open in the last three years.
Just as a note our board of directors decided in its last meeting not to make additional reserves for our equity incentive plan for the year 2026.
When we look at our older vintages, their EV, the margins are close to those you would see at other hard disk countries.
We continue to do the same just better and faster.
As you know, we don't drive to any Vita. It will naturally increase over time as a consequence of all the good things we are doing.
The future looks bright.
We'll now start the Q&A session. So please go ahead operator.
Anthony Hatoum: We are hitting or exceeding our targets with same-store sales that stand out versus industry. Our business is robust, non-cyclical, and battle-tested. In terms of store growth, we have significant runway with room for no less than 14,000 3B stores in Mexico. Today, we're opening more stores, and faster. Our same-store sales growth is not only due to our newer stores. Our older vintages continue to grow their same-store sales faster than inflation. This is driven by the continuous improvements in the products we sell, both in terms of quality and price. Our brand equity continues to strengthen. This drives a faster sales ramp-up of our newer stores, and draws new clients to our stores. Our older vintages are already showing EBITDA margins that are in line with those recorded by other listed hard discounters. We continue to invest in talent. We believe that this is a key success factor.
This is a business model that generates significant negative working capital.
Thank you we will now conduct a Q&A session with Anthony <unk> and in light of this hotel.
And in turn, we generate significant cash flow from the changes in negative working capital.
If you would like to ask a question. Please.
Raise your hand button located at the bottom of the screen. Thank.
If you are connected by telephone please dial star nine.
We can see for example that in September 25 we had 7.8 billion compared to a negative working capital 5.4 billion pesos in the third quarter of 24, excluding IPO proceeds
We are roughly at 10.8% of total revenue.
We remind you that all lines have been placed on mute when it is your turn to ask a question will be given permission to speak you will then be able to on mute yourself and ask your question.
Excluding IPO proceeds.
I will now turn the call back over to Anthony for some final remarks.
We'll now pause for questions.
Okay.
We are heading or exceeding, our targets with same store, sales that stand out versus industry.
And our first question is coming in from Bob Floored at Bank of America.
Our business is robust non-cyclical and battle tested.
Hey, good morning, Anthony and vertical Joaquin congratulations on the quarter.
Anthony I know your gross margin is it dependent variable, but can you comment a little bit.
In terms of store growth, we have significant Runway with room for no less than 14,000 3B stores in Mexico.
Today we are opening more stores and faster.
How youre thinking about your current value propositions and the volume response.
Did you see any need to further sharpen our value proposition as it looks like there's been some additional price reinvestment in the marketplace.
Our same-store sales growth is not only due to our newer stores; our older vintages continue to grow their same-store sales faster than inflation.
And then I was wondering if you could also tell us how we should think about market share.
Anthony Hatoum: The talent density within our team stands out in the market. Our share-based compensation approach has been a key driver to our success. It attracts entrepreneurial talent and aligns everyone with shareholders. Just as a note, our board of directors decided in its last meeting not to make additional reserves for our equity incentive plan for the year 2026. We continue to do the same, just better and faster. The future looks bright. We'll now start the Q&A session, so please go ahead, operator.
This is driven by The Continuous improvements in the products, we sell both in terms of quality and price.
The trade areas Roger oldest cohorts.
The implications for some of the other units.
Our brand Equity continues to strengthen.
And then as you scale I was curious if you're beginning to see unsolicited interest from national suppliers right.
This drives a faster sales ramp up of our newer stores and draws new clients to our stores.
And as you scale, how should we think about.
Use of National suppliers, particularly as you go into two new categories and segments just because.
Our older vintages are already showing IBA margins that are in line with those recorded by other listed hard Discounters
We continue to invest in talent.
The smaller vendors may not be able to supply you in terms of the quantities.
We believe that this is a key success factor.
The talent density within our team stands out in the market.
Bit youll, you'll need to continue to crop.
Thank you.
Operator: Thank you. We will now conduct a Q&A session with Anthony Hatoum and Eduardo Pizzuto. If you would like to ask a question, please press the raise-your-hand button located at the bottom of the screen. If you are connected by a telephone, please dial star 9. We remind you that all lines have been placed on mute. When it is your turn to ask a question, you will be given permission to speak. You will then be able to unmute yourself and ask your question. We will now pause for questions. Our first question is coming in from Bob Ford at Bank of America.
Our share-based compensation approach has been a key driver of our success.
Hi, Bob.
Okay, let's talk about margins.
It attracts entrepreneurial talent and aligns everyone with shareholders.
Because we're scaling you'll naturally see an improvement in our commercial margin overtime, because on one side youre lowering your purchasing costs and two youre, increasing your logistics efficiency.
Just as a note, our board of directors decided in its last meeting not to make additional reserves for our Equity incentive plan for the year 2026.
And the question.
We continue to do the same. Just better and faster.
We have seen many times is okay, how does that translate into percentage margin versus an investments in price and a.
The future looks bright.
We'll now start the Q&A session, so please, go ahead operator.
Shared before that on the pricing side, it's dynamically set by doing elasticity testing.
Thank you. We will now conduct a Q&A session with Anthony, hatun and Eduardo piss.
The bottom line is that we.
Bob Ford: Hey, good morning, Anthony, Eduardo, Joaquín, and congratulations on the quarter. Anthony, I know your gross margin is a dependent variable, but can you comment a little bit on how you're thinking about your current value propositions and the volume response? Do you see any need to further sharpen value propositions? It looks like there's been some additional price reinvestment in the marketplace. I was wondering if you could also tell us how we should think about market share in the trade areas around your oldest cohorts and the implications for some of the younger units. As you scale, I was curious if you're beginning to see unsolicited interest from national suppliers, right?
We are improving our value proposition to our customers. So we're increasing scale.
If you would like to ask a question, please, press the raise your hand button, located at the bottom of the screen.
And we are also opening new stores, so with increasing scale and therefore, we're getting better.
If you are connected by a telephone, please dial Star 9,
Just in terms of across the board and naturally over time, we will see a very natural increase.
We remind you that all lines have been placed on mute when it is your turn to ask a question, you will be given permission to speak. You will then be able to unmute yourself and ask your question.
Margins.
We will now pause for questions.
However.
Our stress that quarter to quarter, we will see volatility in this number.
And our first question is coming in from Bob Ford at Bank of America.
And this is very normal.
As you know, we don't set any specific targets for margins, but we're very comfortable that over time. This number.
Hey good, good Morning, Anthony Eduardo waen and congratulations on the quarter.
Increases in if you look at other publicly listed.
Bob Ford: As you scale, how should we think about your use of national suppliers, particularly as you go into new categories and segments, just because those smaller vendors may not be able to supply you in terms of the quantities that you'll need as you continue to grow? Thank you.
Hard discounters, you can sort of extrapolate where this naturally adds.
Okay.
Now in terms of market share.
Related to our oldest vintages.
Anthony I know your gross margin is a dependent variable but you know, can you comment a little bit on, you know, how you're thinking about your current value propositions in in the volume response and do you do you see any need to further sharpen? The value propositions. It looks like there's been some additional price reinvestment in the marketplace,
<unk> cohorts.
Well, we're very pleased to see that even our oldest vintage continues to grow at the same store sales.
Well above inflation.
Anthony Hatoum: Hi, Bob. Okay, let's talk about margins. Because we're scaling, you'll naturally see an improvement in our commercial margin over time because on one side, you're lowering your purchasing costs, and two, you're increasing your logistics efficiency. The question, as we have seen many times, is, okay, how does that translate into percentage margin versus an investment in price? I've shared before that on the pricing side, it's dynamically set by doing elasticity testing. The bottom line is that we are improving our value proposition to our customers, so we're increasing scale, and we are also opening new stores, so we're increasing scale, and therefore, we're getting better purchasing terms across the board. Naturally, over time, we will see a very natural increase in margins. However, I stress that quarter to quarter, we will see volatility in this number, and this is very normal.
You know, the implications for some of the younger units.
And when we look at it.
<unk>.
The main driver is again, an improved value proposition what we sell today is so much better than what we sold you five years ago and that as a consequence does two things one it still draws new customers and from the existing customer base, what we're seeing is.
And and then as you scale, I was curious, if you're beginning to see unsolicited interest from National suppliers, right? And and as you scale, you know, how should we think about your use of national suppliers particularly as you go into to new categories and segments? Just because you know that
Purchases of more things within that space and if you look at it numerically what you'll see is an increasing number of tickets and an increase in.
Those smaller vendors may not be able to supply you in terms of the quantities that you'll need as you continue to grow.
Thank you.
<unk>.
Ticket sites.
Hi Bob.
Internally, we ask ourselves the question Nokia how long can this left when do we reach saturation and be sold list.
Okay, let's talk about margins.
The vintages cohorts.
And we do extensive market research on this old cohorts and we see that we have significant.
Because we're scaling, you'll naturally see an improvement in our commercial margin over time. On one side, you're lowering your purchasing costs, and on the other, you're increasing your logistics efficiency.
Rooms still today to penetrate their wallet and that is even before taking into account potential new categories that we might introduce.
And the question as we have seen, many times is okay, how does that translate into percentage margin versus an investment in price? And
Your last question was about suppliers. There was two parts to that question. If I'm not mistaken one are we getting unsolicited requests from national suppliers and my answer is yes, I mean, we are becoming a significant player in the market and therefore, it's only natural.
I've shared before that, you know, on the pricing side, it's a dynamically set by doing elasticity testing
Anthony Hatoum: As you know, we don't set any specific targets for margins, but we're very comfortable that over time, this number increases. If you look at other publicly listed hard discounters, you can sort of extrapolate where this naturally ends. In terms of market share related to our oldest vintages, cohorts, we're very pleased to see that even our oldest vintage continues to grow its same-store sales well above inflation. When we look at it, the main driver is, again, an improved value proposition. What we sell today is so much better than what we sold you five years ago. That, as a consequence, does two things. One, it still draws new customers, and from the existing customer base, what we are seeing is purchases of more things within Tiendas 3B.
the bottom line is that
That suppliers will come and knock on our door and say can we do business with you.
That's great.
And second.
In our existing suppliers able to keep up with the pace.
We are improving our value. Proposition to our customers. So we're increasing scale. And we are also opening new stores. So we're increasing scale and therefore we're getting better purchasing terms across the board and naturally over time we will see a very natural increase.
And the answer to that is yes, and the reason is simply because we've planned for it a long time ago. All our planning in terms of supply chain has done three years ahead of time, so that mitigates the risk any risks associated with ensuring that suppliers, they're at the right time.
In margins.
However, I stress that quarter to quarter, we will see volatility in this number, and this is very normal.
And that's how we operate across <unk> long term planning takes out a lot of the execution of our operational risks that you would normally have in a business like ours.
Um, as you know, we don't set any specific targets for margins, but we're very comfortable that over time, this number uh, increases. And if you look at other publicly listed,
Uh, hard discounters, you can sort of extrapolate where this naturally ends.
Understood. Thank you so much and again congratulations thanks, Bob Thank you Bob.
Thank you our next question coming from Joseph Giordano at J P. Morgan.
now, in terms of market share uh related to our oldest uh vintage is cohorts
Anthony Hatoum: If you look at it numerically, what you see is an increase in number of tickets and an increase in ticket size. Internally, we ask ourselves the question, okay, how long can this last? When do we reach saturation in these oldest vintages cohorts? We do extensive market research on these old cohorts, and we see that we have significant room still today to penetrate their wallet. That is even before taking into account potential new categories that we might introduce. Your last question was about suppliers. There were two parts to that question, if I'm not mistaken. One, are we getting unsolicited requests from national suppliers? My answer is yes.
Well, we're very pleased to see that even our oldest vintage continues to grow at the same store sales.
Hi, Good morning, everyone. Good morning, Anthony and Eduardo. Thank you for thank you for taking my question.
Uh, well above inflation.
and when we look at it, um,
I want to explore.
Thank you mentioned on the <unk>.
The fact that new store vintages are actually maturing faster.
Then you should expect so my question goes goes Julie here so firstly.
Don't you think that like maybe.
The maturation level.
The main driver is, again, an improved value proposition. What we sell today is so much better than what we sold five years ago. As a consequence, this does two things: 1, it still draws new customers, and from the existing customer base, what we are seeing is...
So the sales of <unk>.
It is still a moving target so as you flagged I continue to see increasing number of <unk>.
So clients and larger basket. So so that's the first question and the second question to Europe goes into like the return levels right. So back in the day I recall, you guys mentioned, a 60% cash on cash return.
Purchases of more things within tresp. And if you look at it numerically, what you see is an increase in number of tickets and an increase. Uh, in
Ticket size and then internally, we ask ourselves the question. Okay. How long can this last, when do we reach saturation in these oldest?
Anthony Hatoum: I mean, we're becoming a significant player in the market, and therefore, it's only natural that suppliers will come and knock on our door and say, can we do business with you? That's great. Second, our existing supplier is able to keep up with the pace? The answer to that is yes. The reason is simply because we've planned for it a long time ago. All our planning in terms of supply chain is done three years ahead of time. That mitigates any risks associated with ensuring that supply is there at the right time. That's how we operate across 3B anyway. Long-term planning takes out a lot of the execution of operational risks that you would normally have in a business like ours.
Vintages cohorts.
On the new stores, so I'd like to understand how the new cohorts are actually behaving in terms of it just because it seems.
And we do extensive market research on these old cohorts. And we see that we have significant
Have you higher returns and in that aspect.
How should we think about like a further expansion acceleration going forward. Thank you very much.
rooms still today to penetrate their wallet. And that is even before taking into account potential new categories that we might introduce
Okay.
<unk>.
So Joe you're absolutely right in observing that new vintages mature faster.
And therefore, they have improved return on invested capital versus the ones. We've opened 10 years ago, and simply put and our brand is better recognized in the market today and our value proposition is so much stronger than what it was and therefore, it's natural that when you open a new store.
Your last question was uh about suppliers. Uh there was 2 parts to that question that I'm not mistaken 1. Uh, are we getting unsolicited requests from National suppliers? And my answer is yes. I mean, we're becoming a significant player in the market and therefore, it's only natural that suppliers will come and knock on our door and say, can we do business with you? And that's great.
And second.
Bob Ford: Understood. Thank you so much. Again, congratulations.
You know, our existing suppliers able to keep up with the pace.
Clients come to it much faster and buy more immediately as opposed to taking the time it used to take to get to know us and know if our products are good or not.
Anthony Hatoum: Thanks, Bob.
Eduardo Pizzuto: Thank you, Bob.
Operator: Thank you. Our next question is coming in from Joseph Giordano at JP Morgan.
And the answer to that is yes. And the reason is simply because we've planned for it a long time ago.
And that trend I think will continue as.
As long as we continue to improve our value proposition to customers, which is basically.
Eduardo Pizzuto: Hello, good morning, everyone. Good morning, Anthony and Eduardo. Thank you for taking my question. I want to explore one thing you mentioned on the release, the fact that new store vintages are actually maturing faster than initially expected. My question goes two ways here. First, don't you think that maybe the maturation level, so the sales at regime, is still a moving target? As you flagged, I continue to see an increasing number of tickets, so clients and larger baskets. That's the first question. The second question to you goes into the return levels, right? Back in the day, I recall you guys mentioned a 60% cash-on-cash return on the new stores. I'd like to understand how the new cohorts are actually behaving in terms of returns because it seems having higher returns.
Our job every day.
You will see that phenomenon continue.
In terms of you know again I'm going back to older cohorts and you know what.
What the returns have been versus today's cohorts I think.
All our planning in terms of supply chain is done 3 years ahead of time. So that mitigates the risk. Uh any risks associated with ensuring that Supply. Is there at the right time? And that's how we operate our 3B. Anyway, long term planning takes out a lot of the execution operational risks that you would normally have in a business, like ours,
The returns are just as good if not better.
And that's due to the acceleration as you pointed out.
Understood, thank you so much and again, congratulations. Thanks Bob. Thank you Bob.
So nicely so we are.
We are not seeing anything, but better numbers and everything that we're opening that's new.
Thank you. Our next question, is coming in from Joseph Giordano at JP Morgan.
And even though let's say, we take extreme cases of we open a store next to an old store and therefore it might cannibalize.
Things happen, but let's see.
A few and far in between then we simply look at the two stores together and see what their performances and together their performance is better than what it used to be as a single store so across the board.
I think you mentioned on the, the release, the fact that new like Star vintages are actually maturing faster
Eduardo Pizzuto: How should we think about further expansion acceleration going forward? Thank you very much.
Uh, that initial expect. So so my question goes goes through a here. So first like uh uh don't you think that like maybe uh, the maturation level?
And improvement in returns and performance for the newer vintages.
Joe.
Or.
Uh, so the sales at regime is still a moving target. So, as you flag the opportunity to see an increasing number of tickets or so clients,
And just to.
Anthony Hatoum: Joe, you're absolutely right in observing that new vintages mature faster, and therefore, they have improved return on invested capital versus the ones we've opened 10 years ago. Simply put, our brand is better recognized in the market today, and our value proposition is so much stronger than what it was. Therefore, it's natural that when you open a new store, clients come to it much faster and buy more immediately as opposed to taking the time it used to take to get to know us and know if our products are good or not. That trend, I think, will continue as long as we continue to improve our value proposition to customers, which is basically our job every day. You will see that phenomenon continue.
Finalize on the on your questions as we do on a yearly basis, we update our models and we continue to update the models and you are right on the moving target because we have not seen maturation yet even for our 2005 vintage we continued to see very strong increases. So yes, we will we will do the same.
And larger baskets so that so that's the first question and the second question to you goes into like the return labels. Right. So back in the day, I recall you guys mentioned that 60% cash and cash return uh on the new stores. So like to understand how the new cohorts are actually behaving in terms of returns because it seems
and in that aspect,
Modeling this year end.
It will be it will be with that with improved numbers.
Uh, how should we think about further expansion and acceleration going forward? Thank you very much.
For the coming years.
um,
Now eventually like I mentioned in the previous question.
Radically you reach a point of saturation, where.
So, Joe, Joe, you're absolutely right in observing that.
There is no more real growth because you're selling everything you can to everybody that is within reach of your stores, but all our research points out that we're far from that point.
new vintages mature faster.
And like I mentioned before that's not even taking into account.
Anthony Hatoum: In terms of, again, I'm going back to older cohorts and what the returns have been versus today's cohorts, I think the returns are just as good, if not better. That's due to the acceleration, as you pointed out so nicely. We are not seeing anything but better numbers in everything that we're opening that's new. Even though, let's say we take extreme cases where we open a store next to an old store, and therefore, it might cannibalize. These things happen, but are, let's say, few and far in between. We simply look at the two stores together and see what their performance is. Together, their performance is better than what it used to be as a single store. Across the board, an improvement in returns and performance for the newer vintages.
Any new potential categories that might come to market.
Our stores.
Perfect. Thank you very much.
And therefore they have improved return on invested Capital versus the ones. We've opened 10 years ago and simply put in our brand is better recognized in the market today. And our value proposition is so much stronger than what it was. And therefore it's not natural that when you open a new store uh, clients come to it, much faster and buy
Thank you.
Our next question is from.
I don't I don't have Seattle BTG Bank line.
Buy more immediately as opposed to, you know, taking the time it used to take to to get to know us and know if our products are good or not.
And that Trend, I think will continue.
Hey, Anthony what I Hope you guys are doing well.
as long as we continue to improve our value, proposition to customers, which is basically
<unk>.
Two questions and why don't you mentioned in your prepared remarks that next quarter, we might see more favorable comps on sales expenses specifically so.
our job every day. Uh, you will see that phenomenon continue.
In terms of, you know, again I'm going back to older cohorts and, you know,
If you could expand on that.
That'd be helpful.
And my second question is a follow up on the faster ramp up of new stores I was wondering if maybe you could provide a.
What the returns have been versus today cohorts, I think, you know, the returns of are just as good if not better.
And that's due to the acceleration, as you pointed out so nicely. So we are.
Maybe some color on a regional basis, you are opening up new regions, new Dcs in new regions. So in the context of that faster ramp is that faster ramp in stores and sort of the central area of Mexico or are you seeing that ramp up in your regions as well. Thank you.
Eduardo Pizzuto: Joe, Eduardo, just to finalize on your questions, as we do on a yearly basis, we update our models, and we continue to update the models. You're right on the moving target because we have not seen maturation yet. Even for our 2005 vintage, we continue to see very strong increases. Yeah, we will do the same modeling this year, and it will be with improved numbers for the coming years.
We are not seeing anything but better numbers and everything that we're opening that's new.
Thanks Alberto.
On the on selling expenses, it's really related to DNA.
What I meant by that is that and this is something that we touched on on the call on the fourth quarter of last year.
So there is a portion of DNA that was recognized in the fourth quarter of 2024, rather than on the third quarter of 2024. So that's why you'll see a more favorable number.
Um, and even let's say, we take extreme cases of, you know, we open a store next to an old store, and therefore, it might can cannibalize and, you know, these, these things happen. But are, let's say a few and far in between, then we simply look at the 2 stores together and see what their performance is, and together, their performance is better than what it used to be, as a single store. So across the board, um, and Improvement in returns and performance for the newer vintages.
Anthony Hatoum: Now, like I mentioned in the previous question, theoretically, you reach a point of saturation where there is no more real growth because you're selling everything you can to everybody that is within reach of your stores. All our research points out that we're far from that point. Like I mentioned before, that's not even taking into account any new potential categories that might come to market via our stores.
In fourth quarter of 2025.
That's on the selling expenses site.
In terms of faster ramp ups, we're seeing them across the board.
There is no notable differences geographically or by type of store or by their location.
And fundamentally when we ask ourselves should there be and the answer is not really because at the end of the day, we're selling base.
Eduardo Pizzuto: Perfect. Thank you very much.
Basic goods things that everybody consumes all the time and we haven't seen a real change in behavior or geographically.
Joe, a lot of the, um, and just to uh, finalize on on, on, on your questions. As we do on a yearly basis, we update our models and we continue to update the models and you're right on the moving Target because we have not seen maturation yet, even for our 2005 vintage, we continue to see very strong increases. So yeah, we will we will do the same uh, modeling this year and uh and and it will be, it will be with uh with improved numbers uh for the coming years.
Operator: Thank you. Our next question is from Álvaro Garcia at BTG Pactual.
So eventually, like I mentioned in the previous question,
As we're expanding into new regions.
theoretically you reach a point of saturation, where
Also keep in mind that you know in terms of.
Álvaro Garcia: Hey, Anthony, Eduardo. I hope you guys are doing well. Two questions. Eduardo, you mentioned in your prepared remarks that next quarter, we might see more favorable comps on sales expenses specifically. If you could expand on that, that'd be helpful. My second question is a follow-up on the faster ramp-up of new stores. I was wondering if maybe you could provide maybe some color on the regional basis. You are opening up new regions, new DCs, and new regions. In the context of that faster ramp, is that faster ramp in stores in sort of the central area of Mexico, or are you seeing that ramp up in newer regions as well? Thank you.
Real estate strategy.
We have been extremely balanced in where we open our stores on purpose in order to see if maybe there was something different.
There is no more real growth because you're selling everything you can to everybody that is within reach of your stores. But all our research points out that we're far from that point.
And like I mentioned before, that's not even taking into account.
As we expand on the answer is no.
<unk> been very very consistent.
Any new potential categories that might come to market via our stores.
Awesome. Thank you very much for the color and congrats on results.
Perfect, thank you very much.
Hello.
Thank you. Our next question is coming from Alejandro folks.
Thank you.
Our next question is from Alvaro Garcia at BTG Pactual.
Thank you operator, Hello, Anthony level. Thank you pose for questions and congratulations on the results.
Hey, Anthony and Edward. I hope you guys are doing well.
Um,
I just have very two brief ones maybe too.
Dig a little bit deeper into those question.
Eduardo Pizzuto: Thanks, Álvaro. On selling expenses, it's really related to DNA. What I meant by that is that, and this is something that we touched on on the call on the fourth quarter of last year, there's a portion of DNA that was recognized in the fourth quarter of 2024 rather than on the third quarter of 2024. That's why you'll see a more favorable number in the fourth quarter of 2025. That's on the selling expenses side.
Spansion.
Obviously, you're opening a little soft quarter by quarter I wanted to see if maybe you could share.
2 questions, and what are you mentioned? Uh, in your prepared remarks? Next quarter, we might see more favorable comps on sales expenses specifically. So
You see any difference in terms of competition, depending on the region that you're entering in Mexico.
Both of these new regions that you are penetrating.
If you could expand on that, um, that would be helpful. Um, and my my second question is a follow-up on the faster ramp up of new stores? I was wondering if maybe you could provide a, um,
<unk> seen that you can share from the regions and then secondly, just same store sales you mentioned Anthony this is because of volume right number of tickets.
<unk> us more skus in the ticket.
Maybe some color on the regional basis. You, you are opening up new regions and new DCS and new regions. So, in the context of that faster ramp is that faster ramp in stores, in sort of the central area of Mexico or or are you seeing that ramp up in your regions as well? Thank you.
You have to keep those two how is the proportion maybe.
Anthony Hatoum: In terms of faster ramp-ups, we're seeing them across the board. There are no notable differences geographically, by type of store, or by their location. Fundamentally, when we ask ourselves, should there be? The answer is not really because at the end of the day, we're selling basic goods, things that everybody consumes all the time, and we haven't seen a real change in behavior geographically as we're expanding into new regions. Also, keep in mind that in terms of real estate strategy, we have been extremely balanced in where we open our stores on purpose in order to see maybe there is something different as we expand. The answer is no. It's been very, very consistent.
Thanks Alvaro. Um,
Maybe growing a little bit more or adding more to the semester Celsius is more volume or is it more mix.
That will be all thank you.
Okay.
With regards to competition as we are expanding.
Let me step back and say that.
Mexico has always been a very competitive market very dynamic and healthily. So.
Uh, what I meant by that is that in? Uh, and this is something that we touched on, on the call, on the fourth quarter of last year. Uh, so there's a portion of DNA that was recognized in the fourth quarter of uh, of 2024 rather than on the third quarter of 2024. So that's what you'll see a more favorable number in in in fourth quarter of 2025.
And so we have seen no.
Um, that's on the selling expenses side.
Increase or change in the competitive landscape.
And if anything we are becoming more competitive so.
In terms of faster, ramp UPS, we're seeing them across the board.
Bottom line is no changes in terms of encountering new competition or a different kind of competition. Let me just say that it's strong and healthy competition across the board and has always been the case.
Uh, there are no notable differences, geographically or by type of store, or by their location.
Álvaro Garcia: Awesome. Thank you very much for the color, and congrats on results.
And fundamentally, when we ask ourselves, should there be? And the answer is not really. Because at the end of the day, we're selling.
Eduardo Pizzuto: Thank you.
With a <unk> thats, becoming more competitive over time.
Operator: Thank you. Our next question is coming from Alejandro Fux.
Versus everything else.
Henry respect to your second question on same store sales, what we're seeing is very consistent to what we've seen in the past is that.
Basic goods that everybody consumes all the time, and we haven't seen a real behavioral change or geographical shift as we're expanding into new regions.
Alejandro Fux: Thank you, operator. Hello, Anthony, Eduardo. Thank you for the space for questions, and congratulations on the results. I just have two very brief ones, maybe to dig a little bit deeper into Álvaro's question in terms of expansion. Obviously, you're opening a lot of stores quarter by quarter. I wanted to see if maybe you could share if you see any difference in terms of competition depending on the region that you're entering in Mexico, maybe some of these new regions that you are penetrating, or anything that has been interesting that you can share from the new regions. Second, in terms of same-store sales, you mentioned, Anthony, that this is because of volume, right, number of tickets, and mix as more SKUs in the ticket. If you have to pick those two, how is the proportion?
We're seeing more transactions.
Uh, also keep in mind that, you know, in terms of uh, real estate strategy.
<unk>.
In the stores and in addition to that we are also looking into more products in the basket.
We have been extremely balanced in where we open our stores on purpose in order to see maybe there is something different. Uh,
We don't disclose the percentage of those numbers.
As we expand and the answer is no.
It's been very, very consistent.
But it's it's mainly coming from having more people coming into your stores and just taking more product home, that's really a bolt out to those two.
Awesome. Thank you very much for the caller and congrats on results.
Thank you.
And Thats versus general price inflation, which is minimal in our case.
Thank you. Our next question is coming from Alejandro Fuchs.
Perfect Super clear thank you.
And Anthony.
Thank you.
Our next question comes from <unk> at Scotiabank.
Hello, Anthony a lot of Aqua <unk> congratulations on your results.
Alejandro Fux: Who is maybe growing a little bit more or adding more to the semester sales? Is it more volume, or is it more mix? That'll be all. Thank you.
Two key things.
On your very strong same store sales growth.
Confident are you on maintaining the space I mean particular next year and if you think we could continue to see these kind of levels of older stores continue to mature.
Anthony Hatoum: Okay. With regards to competition as we are expanding, let me step back and say that Mexico has always been a very competitive market, very dynamic, and healthily so. We have seen no increase or change in this competitive landscape. If anything, we are becoming more competitive. Bottom line is no changes in terms of encountering new competition or a different kind of competition. Let me just say that it's strong and healthy competition across the board and has always been the case with a 3B that's becoming more competitive over time versus everything else.
That would be number one and the second one is related to the higher commercial margin I know this comes from your elasticity analyses scale efficiencies and Brad negotiation.
With suppliers, but could you. Please guide us through your decision process here to define what to do with the savings that you achieved like how do you decide how much to take from that.
No, 1 from, thank you for this page for questions and congratulations on the results. I just have very 2, brief ones, maybe 2 a little bit deeper into Alberto's question in terms of expansion. Um, obviously you're opening a lot of stores, quarter right quarter when to see, maybe you could share if you see any difference in terms of competition, depending on the region that you're entering in Mexico, maybe this salt is new regions that you are penetrating or anything that has been interesting that you can share, you know, from the new regions and then second in terms of semester sales, you mentioned Anthony that this is because of volume, right? Number of tickets. And and mix as more skus in the ticket. If you have to pick those 2, how, how is the proportion, who, who is maybe growing a little bit more, or adding more to the semester or sales, this is more volume, or is it more mixed? That will be all. Thank you.
When do you decide to pass at full savings to consumers just to get a better sense of margins just by quarter to quarter volatility. Thank you.
Okay. Um,
With regards to competition, as we are expanding.
Let me step back and say that.
Extra let me start with the last part of your question.
So.
Eduardo Pizzuto: Alejandro, with respect to your second question on semester sales, what we're seeing is very consistent to what we've seen in the past. We're seeing more transactions in the stores, and in addition to that, we are also looking into more products in the basket. We don't disclose the percentage of those numbers, but it's mainly coming from having more people coming into the stores and just taking more products home. That's really it; it boils down to those two.
You know, Mexico has always been a very competitive market very Dynamic and healthfully. So
We are generating real savings and purchasing given scale.
and so, um, we have seen no
Increase or change in this competitive landscape.
Given stronger relationships with suppliers give.
and if anything, you know, we are becoming more competitive so
Given efficiencies across the board.
That particular.
<unk> focus on and we're very focused on seeing where can we save money.
Where can we include prove the value proposition.
Therefore, where can we increase now volumes because people are buying more of this better product.
Anthony Hatoum: That's versus price inflation, which is minimal in our case.
Uh, bottom line is no no changes, in terms of encountering, new competition, or a different, kind of competition. Let me just say that it's strong and healthy competition across the board and has always been the case with a 3B. That's becoming more competitive over time, uh, versus everything else.
And you can see the positive flywheel effect.
Alejandro Fux: Perfect. Super clear. Thank you, Eduardo and Anthony.
And so it comes to your question about okay. So how much of this goes into margin and how much of this goes into price.
Operator: Thank you. Our next question comes from Héctor Maya at Scotiabank.
And we do it on a product by product basis.
Héctor Maya: Hola, Anthony, Eduardo, Joaquín. Buen día. Congratulations on your results. Two key things on your very strong semester sales growth. How confident are you on maintaining this pace, and in particular next year? If you think we could continue to see these kinds of levels as older stores continue to mature, that would be number one. The second one is related to the higher commercial margin. I know this comes from your elasticity analysis, scale efficiencies, and price negotiation with suppliers, but could you please guide us through your decision process here to define what to do with the savings that you achieve? How do you decide how much to take from that, and when do you decide to pass the full savings to consumers just to get a better sense of margin despite quarter-to-quarter volatility? Thank you.
Very much driven by others to fatigue testing in the market at any point in time and <unk> Youll have about 60 products that are being tested.
Cross the board for pricing elasticity.
And we optimize them for volumes and dollars margin.
I can respect to your second question on on Sim store sales. What we're seeing is very consistent to what we've seen in the past is that, uh, we're seeing more transactions in in, uh, in in the stores. And in addition to that, we are also looking into more products in the basket. Uh, we don't disclose the, the, the percentage of those numbers. But the, but it's, it's mainly coming from having more people coming into the stores and just taking more products home. That's, that's really it boils down to those 2.
And the result of it.
And that's versus, you know, price inflation which is minimal in our case.
During this all the time across all of our products.
Perfect. So put yours. Thank you.
Is the.
The margin that you see today.
In our numbers. So it's extremely hard for me to guide you and say well this is going to be.
Our next question comes from Ecto Maya at Scotia Bank.
This much next quarter, but what I can tell you from previous experience and if you look also at other hard discounters, you will see that naturally over time.
Congratulations on your results. Um,
A certain amount of these savings are going into percent margin and a certain amount are reflected.
Higher sales curves so basically that also drive same store sales.
Anthony Hatoum: Héctor, let me start with the last part of your question. We are generating real savings in purchasing given scale, given stronger relationships with suppliers, given efficiencies across the board that we particularly focus on. We're very focused at seeing where can we save money, where can we improve the value proposition, and therefore, where can we increase now volumes because people are buying more of this better product. You can see the positive flywheel effect. Here comes your question about, okay, how much of this goes into margin and how much of this goes into price? We do it on a product-by-product basis, very much driven by elasticity testing in the market. At any point in time in 3B, you'll have about 60 products that are being tested across the board for pricing elasticity. We optimize then for volumes and dollar margin.
Across the board.
So again apologies, but very hard to give you specific guidance, but I can give you the tendency that.
<unk> as one where over time it does improve.
Quarter to quarter it remains volatile.
So that's sort of leads into your first part of the question what can I guide you in terms of same store sales for next year would it be as robust.
Defensive margins, despite quarter-to-quarter volatility. Thank you.
Can say with a high degree of confidence based on all the work in research. We've done that we see no reason why same store sales would be any weaker than that.
Um, ha. Let me start with the last part of your question. Um, so
This year. So we expect them to continue to be strong mainly driven by the fact that we know and we have in the pipeline significant improvements.
And the products that we're going to be bringing to market over the next 12 months.
we are generating real savings in purchasing given scale, uh, given stronger relationships with suppliers.
Given efficiencies across the board.
If you asked me does it remain strong 10 years from now.
I can probably say I don't know.
Uh that we, you know, particularly focus on. I mean we're very focused at seeing where can we save money?
But I can say that for the very immediate future for the next couple of years it remains very strong.
Anthony Hatoum: The result of doing this all the time across all our products is the margin that you see today in our numbers. It's extremely hard for me to guide you and say, well, this is going to be this much next quarter. What I can tell you from previous experience, and if you look also at other hard discounters, you will see that naturally over time, a certain amount of these savings are going into percent margin, and a certain amount are reflected in higher sales curves. That also drives semester sales across the board. Again, apologies, but very hard to give you specific guidance, but I can give you the tendency, the trend as one where over time it does improve. Quarter to quarter, it remains volatile. This sort of leads into your first part of the question.
Excellent. Thank you. Thank you very much Anthony.
Uh, where can we improve the value proposition? And therefore, where can we increase our volumes? Because people are buying more of this better product.
and you can see the positive flywheel effect.
Thank you.
Our next question comes from Alexander <unk> Yoga at Morgan Stanley.
And so comes your question about, okay. So how much of this goes into margin and how much of this goes into price?
Hi, everyone. Thanks for taking my question here. The majority of mine have been already answered, but perhaps said that you're on the on one and through the making about like <unk>.
And we do it on a product by product basis.
<unk>.
Very much driven by elasticity testing in the Market at any point in time. In 3B, you'll have about 60 products that are being tested across the board for pricing elasticity.
There are product categories here, if you can give us any update on how the <unk> category.
And we optimize then for volumes and dollar margin.
Our pilot statutes is evolving and if we should see next year already some of these.
And the result of, you know, doing this all the time across all our products.
Is.
Some of these newer categories already in the stores here. Thank you.
The margin that you see today.
Yeah.
We're constantly innovating not only in perishables, but across the board and.
Uh, in our numbers. So it's extremely hard for me to to guide you and say, well this is going to be
In all product categories I mean, that's what we do.
The latest example of the one I'm very excited about is our new ice cream.
This much next quarter, but what I can tell you from previous experience and if you look also at other hard Discounters, you will see that naturally over time.
<unk>, which is a banana with chocolate and it is a blockbuster.
Anthony Hatoum: What can I guide you in terms of semester sales for next year? Would it be as robust? I can say with a high degree of confidence, based on all the work and research we've done, that we see no reason why semester sales would be any weaker than this year. We expect them to continue to be strong, mainly driven by the fact that we know and we have in the pipeline significant improvements in the products that we're going to be bringing to market over the next 12 months. If you ask me, does it remain strong 10 years from now? I can probably say I don't know, but I can say that for the very immediate future, for the next couple of years, it remains very strong.
So innovation and bringing in more value to our customers a new exciting products, we still have significant runway without genome.
A certain amount of these savings are going into percent margin, and a certain amount are reflected.
In higher sales curves. So basically that also drives same Source sales
Uh, across the board.
Breaking any of our principles of a hard discounter, which has limited assortment and an assortment that rotates very fast and therefore generates significant amounts of negative capital, which is we think a competitive advantage to answer specifically on the matter of perishables. They have they are very high potential categories.
So again, apologies, but it's very hard to give you specific guidance. However, I can provide you with the tendency that the trend is over time. It doesn't prove that quarter to quarter it remains volatile.
But however, we have set ourselves very high standards in terms of.
So this sort of leads into your first part of the question, you know, what can I guide you in terms of same store sales?
For next year would would it be as robust?
Quality.
And other metrics efficiency back we want to make sure that the whole value chain is working perfectly before we launch it but all our tests are extremely positive and we remain very optimistic about them.
Héctor Maya: Excellent. Thank you. Thank you very much, Anthony.
Operator: Thank you. Our next question comes from Alexandra Namioca at Morgan Stanley.
Super clear Anthony Thank you very much and congrats on the results as well.
And I can say with a high degree of confidence, based on all the work and research we've done, that we see no reason why same-store sales would be any weaker than this year. So we expect them to continue to be strong, mainly driven by the fact that we know, and we have in the pipeline, significant improvements.
Eduardo Pizzuto: Hi, everyone. Thanks for taking my question here. The majority of mine have been already answered. Perhaps touching on what Anthony mentioned about innovating in the product categories here, if you can give us any updates on how the perishables category sort of pilot status is evolving, and if we should see next year already some of these newer categories already in the stores here. Thank you.
In the products that we're going to be bringing to market over the next 12 months.
Thank you.
Our next question comes from MS <unk> at HSBC.
Uh, if you ask me, does it remain strong 10 years from now?
It's Goldman Sachs, Yes, yeah, Okay. Yeah. Thanks, that's great.
Yeah. My question is that just a couple of sort of double clicking on a couple of the other questions that the analysts brought up on on that product development and product mix. Anthony is Super interesting. What you were just saying sort of burden.
I can probably say, I don't know, but I can say that for the very immediate future, for the next couple of years, it remains very strong.
Excellent. Thank you. Thank you very much, Anthony.
Thank you.
Our next question, comes from Alexander nyoka at Morgan Stanley.
The different products that you're bringing in and I think the earlier comments on how the even mature cohorts how the customer is still sort of migrating up in there and just increases the basket size. So perhaps maybe if you could share some color on when you see sort of the typical customer journey, what typically brings them into the store and what is sort of is there.
Anthony Hatoum: We're constantly innovating, not only in perishables, but across the board in all product categories. I mean, that's what we do. The latest example, the one I'm very excited about, is our new ice cream bar, which is a banana with chocolate, and it is a blockbuster. Innovation and bringing in more value to our customers and new exciting products, we still have significant runway without breaking any of our principles of a hard discounter, which is limit assortment and an assortment that rotates very fast and therefore generates significant amounts of negative capital, which is, we think, a competitive advantage. To answer specifically on the matter of perishables, they have their very high potential categories. However, we have set ourselves very high standards in terms of quality and other metrics, efficiency.
Is there a path that you know.
Certain categories are being put into the basket first and then they migrate to new categories. What have you learned sort of in that journey of of your customers, especially the oldest cohorts of customers.
Hi everyone. Uh, thanks for uh taking my question here. The the majority of uh of mine have been uh already answered, but perhaps uh, touch on the on, what Anthony uh, mentioned below like uh, you know, waiting in the in the in the product categories here, if you can give us uh, any updates on how the the British people category, uh, sort of a pilot status is uh, is evolving. And if we should see uh, next year already some of these, uh, uh, some of these newer categories already in the, in the stores here. Thank you.
And then linked to that.
I know you are doing multiple you're planning when you think about both expansion and product pipeline. So I'd be curious if you also have something to share about so when you think about demographics and shifting and the Mexican population how to adapt how how you have perhaps already adapted your your product mix to that.
Um, we're constantly innovating uh not only in perishables but across the board. Um,
In all product categories. I mean, that's what we do. Uh, the latest example, the 1 I'm very excited about is our new ice cream bar, which is a banana with chocolate and it is a Blockbuster
And how I think I know some of those examples them with some of the sort of health related items.
Anthony Hatoum: We want to make sure that the whole value chain is working perfectly before we launch it. All our tests are extremely positive, and we remain very optimistic about them.
But more importantly, going forward, if there's any specific trends that you're keeping an eye on and that you are looking to to get them in front of and then the final question sorry to go on here, but.
So, you know, innovation and bringing in more value to our customers and new exciting products, we still have significant runway without, you know,
Eduardo Pizzuto: Super clear, Anthony. Thank you very much, and congrats on the results as well.
Hopefully it's helpful for everyone.
When we just think about operating expense leverage into next year is it I know you've sort of you've had some heavy lifting around putting.
breaking any of our principles of a hard Discounter which is limited assortment and an assortment that rotates very fast. And therefore, generates significant amount of negative Capital which is we think a competitive advantage,
Operator: Thank you. Our next question comes from Irma Scars at HSBC.
Some structures in place. This year is it fair to think that that should be growing below your same store sales next year.
Eduardo Pizzuto: It's Goldman Sachs.
To answer specifically, uh, on the matter of perishables. They have they're very high potential categories. Uh, but however, we have set ourselves, very high standards uh, in terms of
Héctor Maya: Yeah, yeah, yeah. Thanks.
Operator: Oh, sorry, guys.
Héctor Maya: No worries. Yeah, my questions are just a couple of sort of double-clicking on a couple of the other questions that the other analysts brought up on that product, the development and product mix. Anthony, super interesting what you were just saying sort of on the different products that you're bringing in, and I think the earlier comments on how even mature cohorts, how the customer is still sort of migrating up in their just increasing the basket size. Perhaps maybe if you could share some color on when you see sort of the typical customer journey, what typically brings them into the store? What is sort of, is there a path that certain categories are being put in the basket first, and then they migrate to new categories? What have you learned sort of in that journey of your customers, especially the oldest cohorts of the customers?
Thank you Irma.
Let's start with the customer journey.
And I would say that in general it's word of mouth.
Your neighbor tells you what a great store they have been too and suddenly you decide to go visit it and it happens to be walking distance and in your neighborhood.
It is working perfectly before we launch it, and all our tests are extremely positive. We remain very optimistic about that.
Super clear. Anthony. Thank you very much and congrats on the results as well.
And you walk in and you do see a lot of brands that you are not familiar with it.
Thank you. Our next question. Comes from. Irma scars at HSBC?
Our private labels are managed those brands and.
We position them.
And communicate them as well as any FMC G company would do in the market.
But you are not familiar with us. So what happens typically is you would start with basic.
Goods, you buy X because there it's a great price and they are very fresh.
Héctor Maya: Linked to that, I know you're doing multiple year plannings when you think about both expansion and product pipelines. I'd be curious if you also have something to share about when you think about demographics and shifts in the Mexican population, how to adapt, how you have perhaps already adapted your product mix to that, and how, I think I know some of those examples with some of those sort of health-related items, but more importantly, going forward, if there's any specific trends that you're keeping an eye on and that you're looking to get in front of. The final question, sorry to go on here, but hopefully it's helpful for everyone. When we just think about operating expense leverage into next year, is it, I know you've sort of had some heavy lifting around putting some structures in place this year.
<unk> oil because it's such a great price to buy rights.
But slowly over time as you've correctly pointed out.
You will see Oh, well they have cam goods, let me try that.
And Ah the detergent up not tried that and by the way.
Anything you buy.
Has 100% money back guarantee no questions asked I don't even need to see your receipt.
And Thats, a very powerful trust builder.
And over time, you start migrating to more.
<unk> products and eventually you end up trying our cosmetics and you realize that they are great.
It's Goldman Sachs. Yeah, yeah, okay, yeah, thanks, no worries. Um, yeah, my questions are just, um, a couple of sort of double clicking on a couple of the other questions that the other analysts brought up on on that products, the development and product makes, um, Anthony super interesting. What you were just saying, sort of an an, the different products that you're bringing in. And I think the earlier comments on, um, how the even mature cohorts of the customers still sort of, migrating up in their, in, in just increasing the basket size. So, perhaps, maybe if you could share some color on, when you see sort of the typical customer Journey, what typically brings them into the store? What is sort of is there? Um, is there a path that, you know, certain categories are being put in the basket first and then, they migrate to new categories, what have you learned sort of in that journey of, um, of your customers, especially the oldest cohorts of the customers, um, and, and then linked to that. Um, you know, I know you're um, doing
And they're at a great price and you have no reason to go back to the other cosmetic that you were using that was much more expensive.
And that's what we've observed from the customer journey and that continues to be true today.
Héctor Maya: Is it fair to think that that should be growing below your same-store sales next year?
More so when we introduce new products.
Anthony Hatoum: Thank you, Irma. Let's start with the customer journey. I would say that in general, it's word of mouth. Your neighbor tells you what a great store they have been to, and suddenly you decide to go visit it. It happens to be walking distance and in your neighborhood. You walk in, and you do see a lot of brands that you're not familiar with. Our private labels are managed as brands, and we position them and communicate them as well as any FMCG company would do in the market. You're not familiar with them. What happens typically is you would start with basic goods. You'll buy eggs because they're at a great price, and they're very fresh. You'll buy oil because it's at a great price. You'll buy rice.
In terms of you know.
What we could introduce in the future and what we're working on some of you have pointed out that we have ongoing tests on perishables.
But we also have ongoing tests on many other categories that you won't necessarily pick up as you walk through the store.
That's true because even though we're focused on basic goods and high rotation goods, we are far from supplying everything you need.
And there is a lot of potential to continue to increase our offering.
Multiple year plannings when you think about both expansion and and and product pipeline. So I'd be curious if you also have something to share about when you think about demographics and shift in, in the Mexican population. Um, how to adapt, how how you have perhaps already adapted your, your product mix to that. And how I think, I know some of those examples, um, with some of those sort of health related items, but, um, but more importantly going forward, if there's any specific trends that you're keeping an eye on and that you're looking to, um, to get in front of and then the final question. Sorry, to go on here. But, um, hopefully it's helpful for everyone. Um, when we just think about operating expense leverage into next year, um, is it, I know you've sort of you've had some heavy lifting around putting, uh, some structures in place this year, is it fair to think that that should be growing below your same? So sales next year
And what we currently offer as categories.
Thank you ma. Um,
And I think I've mentioned previously that our stores are designed to absorb much more skus without even without having to change anything either.
let's start with the customer Journey.
And I would say that, in general, it's word of mouth.
Store size or logistics or anything in the back office.
Or transportation and Thats very important because that allows us and gives us significant cushion to expand our offering without incurring.
Your neighbor tells you what a great store they have been to, and suddenly, you decide to go visit it. It happens to be within walking distance and in your neighborhood.
Anthony Hatoum: Slowly over time, as you've correctly pointed out, you will see, oh, well, they have canned goods. Let me try that. And the detergent. I've not tried that. By the way, anything you buy has a 100% money-back guarantee, no questions asked. I don't even need to see your receipt. That's a very powerful trust builder. Over time, you start migrating to more sensitive products, and eventually you end up trying our cosmetics, and you realize that they're great, and that they're at a great price, and you have no reason to go back to the other cosmetic that you were using that was much more expensive. That's what we've observed in the customer journey, and that continues to be true today, and more so when we introduce new products.
And you walk in and you do see a lot of brands that you're not familiar with.
Operational inefficiencies on the country, it's all designed to become more efficient over time as we scale.
And our private labels are managed as brands. And, uh,
Great I'll, let Ted Love to answer the question on operating leverage, especially as it looks like for next year. So.
You we position them um and communicate them as well as any fmcg company would do in the market.
Without providing any type of guidance Troy.
But you're not familiar with them. So what happens typically is you would start with basic
The Astral becomes on how fast we expand.
And as you know we've been rapidly expanding and we believe that that will continue to be the case.
Goods, you'll buy eggs because there is a great price and they're very fresh. You'll buy oil because it's such a great price. You'll buy rice.
What's been very helpful for us in the way, we view things as what I mentioned in the in the release is that when we're looking at leverage for the older stores, we're seeing very strong leverage there and if we divide the company to the stores that have been opened for more than let's say two or three years, we've seen very strong leverage you don't see that in.
But slowly over time, as you've correctly pointed out.
You will see oh well, they have canned goods. Let me try that.
And ah, the detergents have not tried that. And by the way, anything you buy
Anthony Hatoum: In terms of what we could introduce in the future and what we're working on, some of you have pointed out that we have ongoing tests on perishables. We also have ongoing tests on many other categories that you won't necessarily pick up as you walk in through the store. That's true because even though we're focused on basic goods and high-rotation goods, we are far from supplying everything you need, and there is a lot of potential to continue to increase our offering in what we currently offer as categories. I think I've mentioned previously that our stores are designed to absorb much more SKUs without having to change anything either in store size, logistics, or anything in the back office or transportation. That's very important because that allows us and gives us significant cushion to expand our offering without incurring operational inefficiencies.
Mediate lead because of the pace of growth, we've opened close to 50% of our stores in the past three years, that's a massive amount of store openings in a very short period of time, so that drag the number down and as I mentioned in our last call, it's a little bit perverse because the faster we grow the less leverage youll see in the very short term. However.
has a 100% money back guarantee. No questions asked, I don't even need to see your receipt.
And that's a very powerful trust Builder.
And over time you start migrating to more sensitive products and eventually you end up trying our cosmetics and you realize that they're great.
That provides and that increases shareholder value.
And that there is a great price and you have no reason to go back to the other cosmetic that you were using. That was much more expensive.
Drastically. So we will continue to operate in the same in the same way.
And we will provide guidance for that for the next year in our in our next call.
And that's what we've observed in the customer journey, and that continues to be true today and more. So, when we introduced new products,
in terms of, you know,
Mechanically.
The operating leverage is real and very powerful.
Any of you if you model it you see it.
Yeah.
Okay, great. Thank you.
Thank you Amy.
Thank you. Our next question comes from Alex <unk> at Jefferies.
Anthony Hatoum: On the contrary, it's all designed to become more efficient over time as we scale.
Yes. Thank you good morning.
What we could introduce in the future and what we're working on. Some of you have pointed out that we have ongoing tests on perishables, but we also have ongoing tests on many other categories that you won't necessarily pick up as you walk in through the store. And that's true because even though we're focused on basic goods and high-rotation goods, we are far from supplying everything you need. There is a lot of potential to continue to increase our offering.
<unk> given some indications of the long term runway in terms of.
In what we currently offer as categories.
Héctor Maya: Great.
Anthony Hatoum: I'll let Eduardo answer the question on operating leverage, especially as it looks like for next year.
The number of stores that youre targeting.
You've consistently spoken about people constraints really being the main.
Eduardo Pizzuto: Irma, without providing any type of guidance, truly the answer becomes on how fast we expand. As you know, we've been rapidly expanding, and we believe that will continue to be the case. What's been very helpful for us, and the way we view things is what I mentioned in the release, is that when we're looking at leverage for the older stores, we're seeing very strong leverage there. If we divide the company in two, the stores that have been open for more than, let's say, two, three years, we've seen very strong leverage. You don't see that immediately because of the pace of growth. We've opened close to 50% of our stores in the past three years. That's a massive amount of store openings in a very short period of time, so that drags the number down.
Constraints on Greg you said the pace of expansion. So I wanted to Australia as you grow larger you, obviously, increasing the internal talent pool.
Or anything in the back office.
The average experience of your team.
<unk> quite rapidly so.
Is that something that you see alleviating some of those HR pressures.
And I know you too.
Our transportation is very important because it allows us to have a significant cushion to expand our offering without incurring operational inefficiencies. On the contrary, it's all designed to become more efficient over time as we scale.
Spend more rapidly in terms of new store openings than you already are.
And then the second question I have is.
The capex.
So this year I believe your budget sorry, it was about 365 billion you've done about $2 4 billion.
So it was in the first nine months well start being well on track to meet your store openings, obviously still have a couple of DC to open in the fourth quarter is it fair to say, there's some headroom that has come in below capex.
Eduardo Pizzuto: As I mentioned in our last call, it's a little bit perverse because the faster we grow, the less leverage you'll see in the very short term. However, that provides, and that increases, shareholder value drastically. We will continue to operate in the same way, and we'll provide guidance for the next year in our next call.
Spreadsheets or are there certain investments that you expect to make in Q4 that will lead to a pickup in capex in the fourth quarter. Thank you.
Yeah.
Okay.
And so on.
With regards to people, let me just start by saying.
Anthony Hatoum: Mechanically, the operating leverage is real and very powerful. Any of you, if you model it, you see it.
We set a very high bar.
And we're very proud that we invest in talent development and human resources in general.
Héctor Maya: Okay. Great. Thank you.
Eduardo Pizzuto: Thank you, Irma.
Great. Alleged War to answer the question on operating leverage and specially as it looks like for next year. So, without providing any type of guidance. Truly the, the the the answer becomes on how fast we expand. Um, and and and as you know, we've been rapidly expanding and we believe that that will continue to be the case. Um, what's been very helpful for us? And the way we view things is what I mentioned in the, uh, in the release is that when we're looking at leverage for the older stores, we're seeing very strong, leverage there. And if we divided the company into this, the the stores that have been open for more than let's say, 2 3 years, we've seen very strong leverage. You don't see that immediately because of the pace of growth we we've opened close to 50% of our stores. Uh, in the past 3 years that's a massive amount of store openings in a very short period of time, so that drags the number down. And as I mentioned in our last call, it's a little bit perverse because the faster we grow the less,
Operator: Thank you. Our next question comes from Alex Wright at Jefferies.
Because we firmly believe that thats one of four.
Key success drivers.
Average, you'll see in the very short term. However, that provides and that increases shareholder value
Allowed us to grow now for more than 12 years.
Alex Wright: Yes, thank you. Morning. You've given some indications of the long-term runway in terms of the number of stores that you're targeting. You've consistently spoken about people constraints really being the main constraint on growth and the pace of expansion. I wanted to ask, really, as you grow larger, you're obviously increasing the internal talent pool and the average experience of your teams quite rapidly. Is that something that you see alleviating some of those HR pressures that could allow you to expand more rapidly in terms of new store openings than you already are? The second question I have is on the CapEx for this year. I believe your budget was about MXN 3.65 billion. You've done about MXN 2.4 billion in the first nine months, whilst being well on track to meet your store openings.
Growth rates of plus 30% that you've seen without any hiccups and.
And that's very unusual.
Drastically. So, um, we will continue to operate in the same in the same way, um, and and, uh, we'll provide guidance, uh, for the, for the next year, in our, in our next call.
And so we will continue to invest significantly in human resources and developing talent.
But mechanically.
The operating Leverage is real and very powerful.
And I'm proud to say that I believe we have probably one of the best talent densities of anybody in the market.
Any of you if you model it, you see it.
Okay, great. Thank you.
So going forward is that an obstacle for expansion it's always been.
Thank you very much.
Thank you. Our
Let's say the gating item, but again as we.
comes from Alex Wright at Jeffery.
And everything.
Long term plan.
We work backwards, we say if we want to open that many stores three years from now how many people do we need.
And then we ask ourselves.
Are these people today and what do we need to do today to make sure that three years from now we have enough people of the caliber that we want with the profiles that we want in order to open that number of stores successfully and have them operate at the level of quality and efficiency that wed like them to operate that.
Alex Wright: Obviously, still have a couple of DCs to open in the fourth quarter. Is it fair to say there's some headroom there to come in below CapEx budget, or are there certain investments that you expect to be making in Q4 that will lead to a pickup in CapEx in the fourth quarter? Thank you.
So yes, I would say that is always on our radar.
But I think we have a very robust plan to tackle that and.
Proof is in the pudding, we're opening more stores today.
And they are all very successful.
I'll, let eduardo handle the Capex question sure Hi, Alex.
Yes, thank you. Uh, morning. Um, so given some indications of the long term runway in terms of, um, you know, the number of stores that you're targeting. And, um, you know, you've consistently spoken about, uh, people constraints really being the main, um, constraint on on growth and the pace of expansion. So, I wanted to ask really, as you grow larger. Um, you know, you're obviously increasing the internal talent pool um and the average experience of your team's quite rapidly. So is that something that you see alleviating some of those HR pressures. Uh, that could allow you to, uh, expand more rapidly in terms of new store openings than you already are. Um, and then the second question I have is, um, uh, the capex.
Eduardo Pizzuto: Okay.
Yeah. So you're right we are we still have.
Anthony Hatoum: With regards to people, let me just start by saying we set a very high bar, and we're very proud that we invest in talent development and in human resources in general because we firmly believe that that's one of our key success drivers, what's allowed us to grow now for more than 12 years at the growth rates of plus 30% that you've seen without any hiccups. That's very unusual. We will continue to invest significantly in human resources and in developing talent. I'm proud to say that I believe we have probably one of the best talent densities of anybody in the market. Going forward, is that an obstacle for expansion? It's always been, let's say, the gating item. Again, as we in everything, long-term plan, we work backwards.
Couple of more Dcs to open for the for the <unk>.
A couple of years. So we opened once a this does.
There is an additional one that will happen.
And in early December and the balance of the year with more store openings. So I think we're going to be very close to the number that we projected.
Late last year for around the $3 7 billion.
Alright, Thank you very much.
Uh, for this year, I believe your budget was about 3.65 billion. You you've done about 2.4 billion, uh, pesos in the first 9 months, whilst being well on track to meet your store openings. Uh, obviously still have a couple of DC's to open in the fourth quarter. Is it fair to say there's some Headroom there to come in below? Capex, budget or are there certain Investments that uh you expect to be making Q4 that you know, will lead to a pick up in capex in the fourth quarter. Thank you.
Okay.
Thank you. Our next question comes from from <unk>. Please state Your company name and then ask your question.
with regards to people, let me just start by saying
Yeah.
we set a very high bar.
Hi.
And we're very proud that we invest in talent development and in human resources in general.
Anthony and level, one as we summit management.
because we firmly believe that that's 1 of our
That's on the quarter.
I really appreciate the color on the growth in EBITDA margins on the older cohorts.
key success drivers.
Can you provide any information regarding on how the product sales mix is behaving on those older cohorts.
Anthony Hatoum: We say, if we want to open that many stores three years from now, how many people do we need? Then we ask ourselves, well, where are these people today? What do we need to do today to make sure that three years from now we have enough people of the caliber that we want, with the profiles that we want, in order to open that number of stores successfully and have them operate at the level of quality and efficiency that we'd like them to operate at? Yes, I would say that is always on our radar, but I think we have a very robust plan to tackle that, and proof is in the pudding. We're opening more stores today, and they're all very successful. I'll let Eduardo handle the CapEx question.
What's allowed us to grow now for more than 12 years at growth rates of plus 30% that you've seen without any hiccups?
Private label sales as a percentage of merchandize, reaching.
And that's very unusual.
Reaching the levels you were expecting.
And so we will continue to invest significantly in human resources and in developing Talent.
Oh.
Hi, Darryl.
In regards to EBITDA, we don't disclose this number but.
Um, and you know, I'm proud to say that I believe we have probably one of the best talent densities of anybody in the market.
Conceptually what I can tell you is we.
We are those stores are reaching what other hard discounters in other geographies are reaching so let's talk about.
So going forward is that an obstacle for expansion? It's always been, let's say the gating item but again as we
In everything.
Long-term plan.
Around let's say, 7% EBITDA margins. So what we're seeing in our older cohorts is that Dolby stores are starting to to get to that number.
Uh, we work backwards. We say if we want to open that many stores, three years from now, how many people do we need?
Eduardo Pizzuto: Sure. Hi, Alex. Yeah, you're right. We still have a couple more DCs to open for the half of the year. We opened one, so there's an additional one that will happen in early December and the balance of the year with more store openings. I think we're going to be very close to the number that we projected late last year for around MXN 3.7 billion.
In terms of the profile of these stores, what we're seeing is of course the.
The sales penetration is higher than what you see on a consolidated basis. There is as I mentioned in previous questions.
A significant amount of leverage that gets us to the 7% EBIT margin.
And then we ask ourselves well, where are these people today? And what do we need to do today? To make sure that 3 years from now we have enough people off the caliber that we want with the profiles that we want in order to open that number of stores successfully and have them operate at the level of quality and efficiency that we'd like them to operate that.
In terms of private label penetration and the profile of these stores. This I mean at the end of the data as Anthony mentioned, we're selling very basic goods that the average Mexican consumer.
I would say that is always on our radar but, you know, I think we have a very robust plan to tackle that and you know, proof is in the pudding where opening more stores today and they're all very successful
Alex Wright: Great. Thank you very much.
Consumes on an everyday basis. So there's really no significant differences between the profile of the stores all of the stores are pretty much selling.
Operator: Thank you. Our next question comes from Santiago Alvarez. Please state your company name, and then ask your question.
Handle the CapEx question, sure. Um, hi, Alex. Uh, yeah. So you're right. We, uh, we still have.
The same the same products.
It's just it's just a matter of time for the newer cohorts to get to that that level of sales and therefore profitability, but no major differences from one type of store one.
A couple more DCs to open for the, uh, for the capital of the year. So we opened once. So there's.
There's an additional 1 that, uh, will happen, um,
Eduardo Pizzuto: Hi. I'm Santiago Alvarez with Summit Management. Congrats on the quarter. We really appreciate the color on growth and EBITDA margins on the older cohorts. Can you provide any information regarding how the product sales mix is behaving on those older cohorts? Is private label sales as a percentage of merchandise reaching the levels you were expecting? Thanks.
Age of stores versus the next.
In the early December and the balance of the the year with more store openings. So I think we're going to be very close to the number that we projected uh
Thank you Robbie that's that's really helpful.
Uh, late last year through around the 3.7 billion.
I think you had a second question on private label penetration overall is it as where are we expecting and the answer is yes.
Right, thank you very much.
As you saw in the numbers that we have published is.
End of 2023, where we're at mid forties, and a 2024, we werent mid fifties and this is a number that continues to evolve if you visited the stores lately, you've seen that we've launched more products and they're all doing fantastic. So that that number continues to be we're very happy with the results of those numbers, let me put it that way.
Thank you. Our next question comes from Santiago Alvarez. Please State, your company name and then ask your question.
Anthony Hatoum: Hi, Santiago. In regards to EBITDA, we don't disclose this number, but conceptually, what I can tell you is those stores are reaching what other discounters in other geographies are reaching. Let's talk about around, let's say, 7% EBITDA margins. What we're seeing in our older cohorts is that all these stores are starting to get to that number. In terms of the profile of these stores, what we're seeing is, of course, the sales penetration is higher than what you see on a consolidated basis. There's, as I mentioned in previous questions, a significant amount of leverage that gets us to the 7% EBITDA margin. In terms of private label penetration and the profile of these stores, I mean, at the end of the day, as Anthony mentioned, we're selling very basic goods that the average Mexican consumer consumes on an everyday basis.
Hi, Anthony V. This is with Summit Management.
That's great. Thank you very much thank.
Thank you Cynthia.
Congratulations on the quarter! We really appreciate the insights on growth and EBITDA margins in the other cohorts.
Thank you.
Following question comes from Geely or Sean.
Um, can you provide any information regarding how the product sales mix is behaving on those older cohorts?
Is private label sales as a percentage of merchandise.
Reaching the levels. You were expecting. Thanks.
Yes.
Hi afternoon, Eduardo congratulations on a great quarter.
Or kind of a sense of sensitive topic I would like to ask you.
um, in regards to Eva, we don't disclose this number but
Have there been any interest from larger national and international players.
About your business.
Um, conceptually what I can tell you is, um, we are those stores that reaching? What other hard Discounters in other geographies are reaching. So let's talk about
Jorge or your thoughts off of professional bear harder from Graham and I asked this question of the curve I consider your shares very undervalued.
Around. Let's say 7%. If the margins
Anthony Hatoum: There are really no significant differences between the profile of the stores. All of the stores are pretty much selling the same products. It's just a matter of time for the newer cohorts to get to that level of sales and therefore profitability, but no major differences from one type of store, one age of store versus the next.
Growth is incredible so.
Would you comment on that.
The short answer Gulli, hi by the way.
<unk> is not to my knowledge.
We've talked with international players in terms of cooperating on certain matters, but the.
So what we're seeing in our older cohorts is that Toby stores are starting to to get to that number. Um, in terms of the profile of these stores, what we're seeing is, of course, the uh, the uh, the sales penetration is higher than what you see in our Consolidated basis. There's as I mentioned in in, in previous questions. Um, a a significant amount of Leverage that gets us to the year 7% t with the margin.
The topic of a bear hug has not emerged today okay.
In terms of the shares being undervalued or not to let the market judge on that you know this is a company that continues to.
Eduardo Pizzuto: Thank you very much. That's really helpful.
Anthony Hatoum: I think you had a second question on private label penetration overall. Is it as we're expecting? The answer is yes. I mean, as you saw in the numbers that we have published, end of 2023, we were at mid-40s. End of 2024, we were at mid-50s. This is a number that continues to evolve. If you visited the stores lately, you've seen that we've launched more products, and they're all doing fantastic. That number continues to be—we're very happy with the results of those numbers, let me put it that way.
So extremely high growth healthy growth.
And improving.
Returns across every single metric so hopefully the market recognize that at some point.
Uh, in terms of private label penetration and the, uh, the profile of these stores, I mean, at the end of the day, as Anthony mentioned, we are selling very basic goods that the average Mexican consumer, uh, consumes on an everyday basis. So, there's really no significant differences between the profile of the stores.
Thank you.
Thank you we will pause one small for any further questions. We remind you that to do so you must be raising your hand button at the bottom of the screen.
All of the stores are pretty much selling um, the same, the same products. Uh, it's just uh, it's just a matter of time for the newer cohorts to get to that uh that level of uh sales and therefore profitability, but no major differences from 1, 1 type of store, 1, age of store versus the next.
Eduardo Pizzuto: That's great. Thank you very much.
Anthony Hatoum: Thank you, Santiago.
We have not received any further questions I would now like to hand, the call back over to Anthony had Julien for some closing remarks.
Operator: Thank you. Our following question comes from Guli Arshad.
Okay.
Thank you to our investors, who continue to be very supportive and very enthusiastic.
Thank you very much. I think you had a second question on private level. Penetration overall, is it as where we expecting? And the answer is? Yes. I mean, as as you saw in the numbers that we have published is
Anthony Hatoum: Yes. Hi, Anthony and Eduardo. Congratulations on a great quarter. I have a kind of a sensitive topic I would like to ask you. Have there been any interest from larger national and/or international players about your business? What are your thoughts of a potential bear hug from them? I ask this question because I consider your shares very undervalued, and your growth is incredible. Would you comment on that?
Thank you for the analysts who are covering us.
Keep us challenged with interesting questions.
And thank you overall for participating in this call.
Like to leave you with the thought that.
Our company continues to perform very strongly.
End of 2023, we were at mid-40s; end of 2024, we were at mid-50s, and this is a number that continues to evolve. If you visited the stores lately, you've seen that we've launched more products, and they're all doing fantastic. So that number continues to be, uh, we're very happy with the results of those numbers. Let me put it that way.
That's great. Thank you very much.
And the future looks very bright for us. Thank you again.
Thank you, s.
That concludes today's call you may now disconnect.
Thank you. Our following question comes from ghoulie our
Guli Arshad: The short answer, Guli, hi, by the way, is not to my knowledge. We've talked with international players in terms of cooperating on certain matters, but the topic of a bear hug has not emerged today. In terms of the shares being undervalued or not, I'll let the market judge on that. This is a company that continues to show extremely high growth, healthy growth, and improving returns across every single metric. Hopefully, the market recognizes that at some point.
Yes. Uh, hi Anthony and Eduardo because congratulations is not a great quarter. Uh, I have a, a kind of a sense of sensitive topic. I would like to ask you, uh, have there been any interest from larger National Andor International
National players.
Uh, about your business and what are your thoughts of a potential beer hug from them? And I asked this question because I consider your shares very undervalued,
And your growth is incredible. So, uh, would you comment on that?
Anthony Hatoum: Thank you.
Um, the short answer, Gulie. Hi, by the way, is not to my knowledge.
Operator: Thank you. We will pause once more for any further questions. We remind you that to do so, you must click the raise your hand button at the bottom of the screen. We have not received any further questions. I would now like to hand the call back over to Anthony Hatoum for some closing remarks.
Could judge on that. You know, this is a company that continues to
Show. Extremely high growth Healthy Growth.
And improving. Um,
Anthony Hatoum: Thank you to our investors who continue to be very supportive and very enthusiastic. Thank you for the analysts who are covering us, who keep us challenged with interesting questions. Thank you overall for participating in this call. I'd like to leave you with the thought that our company continues to perform very strongly, and the future looks very bright for us. Thank you again.
Returns across every single metric. So hopefully, the market recognizes that at some point.
Thank you.
Thank you. We will pause once more for any further questions, we remind you that to do. So you must click the raise your hand button at the bottom of the screen.
Operator: That concludes today's call. You may now disconnect.
We have not received any further questions. I would now like to hand a call back over to Anthony hattam for some closing remarks.
Uh, thank you to our investors who continue to be very supportive and very enthusiastic.
Thank you to the analysts who are covering us, who keep us challenged with interesting questions.
Uh and thank you overall, for participating in this call, I'd like to leave you with a thought that, you know, our company continues to perform very strongly and the future looks very bright for us. Thank you again.
That concludes today's call. You may now disconnect