BBB Foods Inc. 2026 Q2 Earnings Call

Please go ahead. Good morning, and thank you for joining us today.

I will begin with a review of our operating results for the quarter, and will be followed by our CFO, Eduardo Pizzuto, who will provide an overview of our financial performance. We will conclude with our Q&A session. We delivered another strong quarter, sustaining and even building on the momentum we achieved in the first quarter. Here are the key highlights from our second quarter results. We opened 155 net new stores during the quarter, bringing our total store count to 3,624 as of June 30, 2026. Over the last 12 months, we have opened 593 net new stores. We also opened one new distribution center, expanding our network to 21 regions as of the end of June. Same-store sales grew 20% compared to the second quarter of 2025. Total revenue increased 39% year-over-year to MXN 26 billion.

Reported EBITDA reached MXN 960 million. Excluding non-cash share-based compensation, EBITDA increased 44% to MXN 1.6 billion. For the first half of the year, cash flow generated from operating activities reached MXN 4.3 billion, representing 119% growth compared to the first half of 2025. Let's now turn to our operational performance. As I mentioned, we opened 155 net new stores during the second quarter. Over the last 12 months, we have opened 593 net new stores, representing 20% growth in our store base compared to June 2025. Our expansion strategy remains unchanged. We continue to balance densifying our presence in existing regions while selectively expanding our footprint in others. Our revenue growth remained exceptionally strong, and we believe 3B continues to be amongst the fastest-growing retailers globally. Total revenue reached MXN 26 billion in the second quarter, up 39% year-over-year.

Same-store sales increased 20%, reflecting another quarter of outstanding performance. This strong growth continues to be driven by ongoing improvements to our value proposition, increasing brand awareness, and growing customer loyalty. Our same-store sales performance continued to significantly outperform the market. During the quarter, we maintained a gap of more than 20 percentage points versus ANTAD, while our internal inflation remained very low. I will now pass the microphone to Eduardo.

Thank you, Anthony. Good morning, everyone. Sales expenses as a percentage of revenue decreased by 56 basis points to 10% year-over-year in the second quarter of 2026. Most of the expense lines showed operating leverage, including labor. Admin expenses, excluding share-based payment, increased by 57 basis points year-over-year. As seen in previous quarters, admin expenses reflect our continuing investment in talent and expansion into new regions to support our accelerated growth. In the second quarter of 2026, admin expenses reflects a one-time cash expense of MXN 37 million related to the equity follow-on offering in May 2026. With respect to the share-based payment expense, these are non-cash and already reflected in our fully diluted share count. Additional details are available in the appendix of this earnings release, where we also provide projections for this non-cash expense.

EBITDA for the second quarter of 2026, excluding non-cash share-based payment expense, increased 44% to MXN 1.6 billion, driven by strong sales growth, improved gross margin, and operational efficiencies. The adjusted EBITDA margin increased by 21 basis points year-over-year. EBITDA in the second quarter of 2026 includes a one-time cash expense of MXN 37 million related to the equity follow-on offering in May 2026. Excluding this impact, the adjusted EBITDA margin in the second quarter of 2026 was 6.2%. As you know, we don't drive to an EBITDA. It will naturally continue to increase over time, driven by our disciplined execution. Our business model generates strong operating cash flow through our structurally negative working capital model. As of June 2026, adjusted negative working capital reached MXN 10.2 billion compared to MXN 7.1 billion in 2025, excluding IPO and follow-on proceeds.

This represents approximately 11.2% of total LTM revenue, also excluding IPO and follow-on proceeds. Our operating cash flow fully funds our organic expansion. I will now turn the call back over to Anthony for final remarks.

Thank you all for joining us today and for your continued interest in Tiendas 3B. We delivered a strong first half of 2026 with consistent and solid execution across our key operating and financial metrics. Our high-growth business model has continued to demonstrate its resilience across different economic environments. It delivers attractive unit economics, generates strong cash flow, and becomes even more competitive as we scale. We remain confident in the significant long-term growth opportunity for Tiendas 3B. Thank you, and we will now open the call for your questions.

Thank you. I will take the gross margin question, Andrew.

As you know, it is a dynamic process in a sense that this is a sum, what you are seeing here is a sum of the gross margins of all the SKUs we currently carry. In large part, let us say the main driver is we scale, we are much more efficient in terms of buying or in terms of manufacturing a good. We get better input conditions. We improve the logistics of moving that good over, and that fundamentally basically gives you a bigger pie that if it is a private label product you have divided in a very equitable way with your producer. Then you turn around and you say, "Okay, now I have a bigger pie. Let us decide at what price do we put it?" It is mostly a very ongoing adjustment of prices where we try to optimize volumes and dollar margin.

And then we sum it all up and you see that, yes, it's improved, but it's the result of all these little improvements that we see across the whole portfolio. Will the trend continue? Very likely, you'd see this improving as we scale and as we are just getting better at what we do. There comes a point where in terms of percent margin, you're basically passing more into price than necessarily retaining it. But end result, the most important thing is to look at is the MXN dollar margin generated, and as long as this continues to grow healthily as we see it here, we're all very happy.