BBB Foods Inc.

Good morning, everyone. My name is Leonor, and I will be your conference operator. Welcome to Tiendas 3B's first 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 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 your display. 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're 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. Please go ahead.

Good morning, everyone, and thank you for joining Tiendas 3B's first quarter 2025 earnings call. I will begin with a review of our operating results for the quarter and will be followed by our CFO, Eduardo Pisotto, who will provide an overview of our financial performance. We will conclude with a Q&A session to answer any questions you may have. We are very pleased with the results of our first quarter, more so in the context of this market environment. Our consistent execution and our attractive value proposition have allowed us to accelerate growth and to increase market share gains. We opened 117 net new stores for a total of 2,889 stores. Same-store sales grew by 13.5%. Total revenues increased by 35% to 17 billion pesos. EBITDA increased by over 12% to reach 705 million pesos. Cash flow generated by operating activities reached 1.1 billion pesos, a 49% increase year over year. We ended with a net cash position of approximately 1.6 billion pesos. In addition, we have $150 million of cash in US dollars. We turn to operational performance and look at store openings. We have opened 117 net new stores this quarter compared to 94 stores for the first quarter of 2024. And we are accelerating our store openings. Another way to look at this is comparing our store openings last 12 months, first quarter this year versus last year. For this year, we have 507 stores. For last year, 416 stores. This is an increase of roughly 100 stores. If we look at our revenues and same store sales, we continue to be one of the fastest growing retailers globally. Total revenues reached $17.1 billion, an increase of 35.1% year over year. Very strong same-store sales growth of 13.5%. Our same-store sales numbers continue to be driven by our value proposition to customers, and that value proposition continues to improve. If we look at our same-store sales versus untapped, the gap is notable and increasing. I will now pass the microphone to Eduardo.

Thank you, Anthony. Good morning, everyone. Sales expenses as a percentage of revenue slightly increased from 10.2 to 10.3 percent due to our accelerating store opening pace. As Anthony just mentioned, we increased our pace roughly 100 stores in the last 12 months. On the matter of operating leverage, at the unit level, we continue to see a decreasing trend in cost as a percentage of sales. This is not apparent at the consolidated level as we continue to accelerate the pace of store openings. It is important to keep in mind that we pay the full cost of new stores and regions before we see the full revenue. Admin expenses as a percentage of revenue increased by 60 basis points from 3.5 to 4.1%. This includes incremental 84 million pesos on non-cash share-based payments of roughly 50 basis points. We're also investing for current and future growth acceleration, hiring key personnel for the four new regions we're opening in 2025, and increasing talent density at headquarters, particularly in IT, purchasing, controls, and legal. We posted robust growth of 12.7% in our EBITDA that reached 705 million pesos. Margin decreased from 4.9% to 4.1% due to the increase in investments to support our accelerating growth. Ours is a business model that generates significant negative working capital. In turn, we generate significant cash flows from changes in negative working capital. We can see, for example, that in March of 24, we had a negative working capital of 4.8 billion pesos compared to a negative working capital of 6.5 billion pesos in March of 25. This is roughly 10.5% of total revenue. I'd also like to highlight that our accelerating growth continues to be self-funded. I will now turn the call back over to Anthony for final remarks.