BBB Foods Inc.

Good morning, everyone. My name is Sofia, and I will be your conference operator. Welcome to Tiendas 3B fourth quarter and full year 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 name. 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 are joined by Tienda Tres Vez 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 and thank you for joining us today.

I will begin with a review of our operating results and will be followed by our CFO, Eduardo Pizzuto, who will provide an overview of our financial performance and who will outline our guidance for 2026. We will conclude with a Q&A session to answer the questions you may have. We delivered another quarter of excellent performance and closed the year with strong momentum. Our results in 2025 reflect the continued strength of our business model, rapid and disciplined store expansion, strong same store sales growth, and solid cash generation. During the fourth quarter, we continued to scale the business while improving our value proposition for customers and strengthening our operating infrastructure. Let me briefly highlight a few key results from the quarter and the full year. During the quarter, we opened 184 net new stores, bringing the full year total to a record 574 net openings. which exceeded our guidance of 500 to 550 stores. We also opened two new distribution centers in the quarter for a total of four new ones in 2025. Same store sales grew 16.6% in the fourth quarter versus the same quarter last year and increased 18.3% for the full year versus last year. Total revenues in the fourth quarter increased 34% to 22 billion pesos. For the full year, revenues grew 36% to 78 billion pesos. In the fourth quarter, reported EBITDA was 79 million pesos. Excluding non-cash share-based compensation and a one-time asset write-off, EBITDA increased 23% to 1.2 billion pesos. Eduardo will provide more detail on the write-off later in the call. For the full year, reported EBITDA was 1.2 billion pesos. Excluding non-cash share-based compensation and the asset write-off, EBITDA increased 30% to 4.4 billion pesos. Finally, for the 12 months ending December 2025, cash flow generated from operating activity reached 4.7 billion pesos, representing an almost 25% increase year over year. Now, let's turn to operational performance. We accelerated our store expansion. As mentioned earlier, we opened 184 net new stores in the fourth quarter. For the full year 2025, we opened 574 net-use stores. That is a 21% growth compared to last year when we opened 484 stores. Our expansion strategy remains consistent. We continue to densify existing regions while gradually expanding into new ones. To support this growth, we also opened four new distribution centers in 2025. Revenue growth remains very strong. It is likely that we are one of the fastest growing retailers in LATAM, if not globally. A quick recap here. Total revenue in the fourth quarter reaching 22 billion pesos, an increase of 34% year over year. Very strong same store sales growth of 16.6%. Same store sales driven in large part by the ongoing improvement in our value proposition to customers. Looking at the full year, total revenue in 2025 reached 78 billion pesos, representing 36% growth compared to last year. This growth has been compounding year after year. Our revenue CAGR for the last four years has been 35%, driven by the strength of our expansion strategy and by our store performance. When we compare our same-store sales performance with Antat, the gap remains significant. We are seeing a gap of more than 15 percentage points despite operating with low internal inflation. We just updated our spaghetti chart that many of you have seen before. This chart shows the sales trajectory of our store cohorts from 2005 through 2024. Sales are adjusted for inflation to make this an apples to apples comparison. Two points stand out. Newer stores are opening with higher initial sales levels than earlier cohorts. At the same time, all store cohorts continue to grow at a healthy pace. For newer cohorts, their sales curves are steeper, and for older ones, we continue to see their sales growing. This reflects the ongoing improvement in our value proposition, as well as growing brand awareness and growing brand equity. I would like to highlight a few additional operating metrics. For stores with five or more years of operations, the average number of transactions per store per month increased by 2.5%. Average ticket size increased by 11%, driven primarily by more items per ticket and an improved product mix, and to a much lesser extent by price inflation. Finally, in 2025, Private label represented 58% of total merchandise sales. This compared with 54% in 2024.