TBBB

BBB Foods Inc. (Tiendas 3B) - 3Q25 Earnings Summary

Business Context and Reporting Period

BBB Foods Inc. ("Tiendas 3B"), a leading grocery hard discounter in Mexico, reported consolidated results for the third quarter of 2025 ended September 30, 2025. The company operates under the ticker symbol TBBB on the NYSE. As of September 30, 2025, the company operated 3,162 stores across 18 regions, having opened 131 net new stores during the quarter and 528 net new stores over the trailing twelve months.

Key Financial Metrics

Note: Figures are in nominal Mexican Pesos (Ps.) unless otherwise stated. EBITDA and EBITDA ex. SBP are non-IFRS measures.

Material Changes vs. Prior Period

• Revenue Growth: Driven by a 17.9% increase in Same Store Sales (SSS) and incremental sales from 528 net new stores opened in the last 12 months. SSS growth was fueled by higher transactions per store and more SKUs per transaction.
• Expense Surge: Administrative expenses increased 326.5% year-over-year to Ps. 2,109 million. This was primarily due to a Ps. 1,574 million non-cash share-based payment expense (up from Ps. 126 million in 3Q24) related to the Liquidity Event Plan (LEP) and new regional staffing.
• Profitability Impact: While commercial margins expanded, the massive non-cash share-based compensation charge resulted in a reported EBITDA loss of Ps. 404 million and a Net Loss of Ps. 1,424 million, compared to a Net Profit of Ps. 258 million in 3Q24.
• Financial Costs: Financial costs rose 26.4% to Ps. 363 million, driven by higher interest on lease liabilities due to network expansion. A foreign exchange loss of Ps. 86 million was recorded due to USD depreciation against the MXN.

Guidance, Outlook, and Risks

• Expansion Strategy: Management remains on track to meet full-year 2025 guidance. The company opened two new distribution centers in 3Q25 and expects two more to start operations in 4Q25. Long-term vision targets at least 14,000 stores in Mexico.
• Share-Based Compensation: The company disclosed a projected non-cash share-based payment expense of Ps. 2,934 million for FY2025, with significant recognition occurring in 3Q25 due to the graded vesting of the LEP. Future years (2026-2028) are projected to see declining non-cash expenses as vesting schedules progress.
• Liquidity: The company maintains strong operating cash flow generation, funded by a negative working capital cycle. As of September 30, 2025, liquidity included Ps. 1,113 million in local currency cash and US$151 million in short-term bank deposits.
• Risks: Forward-looking statements are subject to risks including foreign exchange fluctuations, competitive pressures, and the ability to execute rapid store expansion. The filing notes that non-IFRS measures may not be comparable to other companies.

Investor Verification Checklist

• Non-Cash Expense Impact: Verify the sustainability of profitability by analyzing EBITDA excluding share-based payments (Ps. 1,170 million) versus reported GAAP/IFRS net loss.
• Share-Based Payment Schedule: Review Appendix 2 for the detailed vesting schedule of the Liquidity Event Plan and its impact on future earnings (projected Ps. 1,953 million expense in FY2025).
• Currency Exposure: Assess the impact of the Ps. 86 million foreign exchange loss on the company's USD-denominated cash position and future hedging strategies.
• Lease Liabilities: Examine the balance sheet for the growth in lease liabilities (Short-term: Ps. 974 million; Long-term: Ps. 9,264 million) and the associated interest costs driving up financial expenses.
• Store Economics: Confirm the maturation rate of new store cohorts and whether EBITDA margins for older stores are stabilizing as management claims.