Alsea Q2 2025 presentation slides: Sales surge 14.2% amid strong European performance

Alsea SAB De CV reported robust Q2 2025 results, with sales increasing 14.2% year-over-year to 21.35 billion pesos and post-IFRS-16 EBITDA reaching 4.62 billion pesos, supported by an 80 basis point improvement in cost of sales. The restaurant operator saw strong momentum in its European operations, which grew 25.4% year-over-year, alongside steady performance in Mexico, and achieved 4.9% same-store sales growth driven by significant digital channel contributions accounting for 38.6% of tender. While brands like Starbucks and Domino's showed consistent growth, Burger King faced headwinds in key markets, highlighting varied performance within the portfolio as Alsea continues its strategic focus on disciplined growth and digital transformation.

Analysis

Alsea SAB De CV demonstrated a significant acceleration in its Q2 2025 performance, reporting a 14.2% year-over-year sales increase to 21.35 billion pesos, a material improvement over the 4.2% growth in the prior quarter. This top-line strength was supported by an 80 basis point improvement in cost of sales, contributing to a healthy post-IFRS-16 EBITDA margin of 21.5%. Growth was geographically diversified but led by a robust 25.4% sales increase in its European operations, complemented by solid growth in Mexico (9.1%) and South America (12.9%). The company's strategic focus on digital transformation is yielding tangible results, with digital channels accounting for 38.6% of tender and loyalty programs generating 5.4 billion pesos in sales. However, performance within the brand portfolio is uneven. While Starbucks and Domino's Pizza delivered consistent same-store sales (SSS) growth, particularly in South America and Mexico, the Burger King brand is a notable drag, posting SSS declines of 6.8% in Mexico and 5.1% in Chile. Financially, the company maintains a debt-to-EBITDA ratio of 3.0x, with a significant 48% of its debt maturing in 2026, a key factor to monitor in its capital allocation strategy.

Key Decisions for Investors

• Investors should weigh the strong top-line momentum and successful digital strategy against the pronounced weakness in the Burger King brand, which represents a key risk to consolidated performance.
• Monitor management's execution on portfolio optimization, specifically any turnaround plans for underperforming brands, as this will be critical to sustaining overall growth and profitability.
• Given the 3.0x debt-to-EBITDA ratio and the substantial debt maturity concentration in 2026, it is prudent to assess the company's deleveraging progress and refinancing strategy over the coming quarters.