Financial Data and Key Metrics Changes - Total revenues increased by 27.5% year-on-year to reach PS 13.6 billion for the quarter [3][5] - EBITDA reached PS 689 million, reflecting a growth of 43.2% year-on-year [3][7] - Net cash flows from operating activities rose to PS 1.256 billion, an increase of 25% year-on-year [4] - The company ended the quarter with a net cash position of approximately PS 1.2 billion and PS 2.8 billion in short-term bank deposits [4] Business Line Data and Key Metrics Changes - Same-store sales grew by 10.7%, indicating strong underlying demand despite a slowdown compared to the previous year [3][5] - Gross profit margins improved by 60 basis points to reach 16.7% for the second quarter, driven by better supplier terms [5][7] Market Data and Key Metrics Changes - The company opened 121 net new stores in the second quarter, bringing the total store count to 2,503 [3][4] - The company aims to open between 380 and 420 new stores in 2024, with a total of 215 net new stores opened since the beginning of the year [4][9] Company Strategy and Development Direction - The company maintains a decentralized approach to store openings, which has proven effective [9] - The business model focuses on opening new stores, providing excellent value to customers, and continuously improving the value proposition [9] - The company is optimistic about growth opportunities in Mexico, indicating a strong runway for expansion [4][9] Management's Comments on Operating Environment and Future Outlook - Management noted that quarterly sales were slightly impacted by various factors, including the timing of Easter and government payments [5][9] - The company expects to maintain its guidance for sales growth of 28% to 32% [9] - Management emphasized that the strength of the business model lies in its simplicity and efficiency [9] Other Important Information - The company reported an increase in administrative expenses by 45.8%, primarily due to higher personnel costs related to expansion [7] - Adjusted negative working capital stands at 10.2% of total revenue, reflecting operational efficiency [8] Q&A Session Summary Question: Inquiry about gross margin dynamics - Management explained that scaling leads to cost benefits on purchasing, and pricing decisions are made on a product-by-product basis [10][12] Question: Performance of fresh and meat categories - Management stated that tests for meat and fresh produce are encouraging, but no official projections have been shared [16][17] Question: Details on dilution in selling expenses - Management clarified that as the number of stores and sales grow, there will be continued dilution of expenses across the base [20][22] Question: Impact of peso depreciation on cost of goods sold - Management indicated that the impact of peso depreciation on costs is typically a delayed effect [34][40] Question: Percentage of imports versus local production - Management noted that most raw materials are dollarized, and the non-dollarized costs are primarily labor-related [41][42] Question: Return on investment for new stores - Management expressed confidence that returns on new stores will continue to improve due to better brand recognition and value proposition [43][45] Question: Non-cash gains from exchange rate variation - Management confirmed that the company will maintain its overseas investments for the remainder of the year [47][48]
BBB Foods(TBBB) - 2024 Q2 - Earnings Call Transcript