BBB Foods Q2 Earnings Call Highlights
BBB Foods (NYSE:TBBB), which operates the Tiendas 3B discount retail chain, reported second-quarter 2026 revenue growth of 39% from a year earlier to MXN 26 billion, supported by a 20% increase in same-store sales and continued store expansion.
Chairman and Chief Executive Officer Anthony Hatoum said the company opened 155 net new stores during the quarter, bringing its store base to 3,624 locations as of June 30. Over the past 12 months, the company added 593 net new stores, representing 20% growth in its store base compared with June 2025.
The company also opened one distribution center in the quarter, expanding its network to 21 regions at the end of June.
Sales Growth Driven Primarily by Volume
Hatoum said approximately two-thirds of the company’s same-store sales growth came from volume, while roughly one-third came from price. Within the price component, he said improved product mix was the larger contributor, while internal inflation remained low.
Management said sales growth reflected continued improvements in the company’s value proposition, greater brand awareness and customer loyalty. Hatoum said Tiendas 3B maintained a gap of more than 20 percentage points in same-store sales performance versus ANTAD during the quarter.
All current product categories grew during the period, Hatoum said, though categories with greater existing penetration grew at a somewhat slower pace than newer categories. The company continues to maintain a conservative approach to adding products, seeking high-rotation items and potentially removing less attractive SKUs when new ones are introduced.
Hatoum said the company sees further opportunity to increase customer spending both by attracting new shoppers and by expanding the number of items purchased by existing customers. He said even selling one additional item per customer can have a meaningful effect on comparable-store sales.
Profitability and Cash Flow
Reported EBITDA was MXN 960 million in the second quarter. Excluding non-cash share-based compensation, EBITDA rose 44% year over year to MXN 1.6 billion. The adjusted EBITDA margin increased 21 basis points from the prior-year quarter.
Chief Financial Officer Eduardo Pizzuto said adjusted EBITDA also included a one-time cash expense of MXN 37 million related to the company’s May 2026 equity follow-on offering. Excluding that expense, adjusted EBITDA margin was 6.2% in the quarter.
Selling expenses as a percentage of revenue declined 56 basis points year over year to 10%, with management citing operating leverage across most expense categories, including labor. Administrative expenses, excluding share-based payments, rose 57 basis points as the company continued to invest in talent and expansion into new regions.
Pizzuto said the company expects to continue investing in talent during the second half, particularly in purchasing, logistics, systems and specialty functions. He said investors could reasonably expect general and administrative expenses in the near term to remain around 3% of revenue.
For the first half, cash flow from operating activities reached MXN 4.3 billion, an increase of 119% from the first half of 2025. Adjusted negative working capital was MXN 10.2 billion as of June, compared with MXN 7.1 billion a year earlier, excluding IPO and follow-on proceeds. Pizzuto said the company’s operating cash flow fully funds its organic expansion.
Distribution Center Expansion May Affect Near-Term Logistics Costs
Management attributed gross-margin improvement to greater scale in purchasing and manufacturing, improved logistics and ongoing pricing decisions across its product portfolio. Hatoum said the company focuses on growing dollar gross margin over time, while determining how much of efficiency gains to pass through to customers in lower prices.
Pizzuto said transportation costs benefited in the second quarter from efforts to optimize logistics across regions and better management of pre-operating expenses at the distribution center opened during the period.
However, the company has since opened two additional distribution centers and expects to open a third during the third quarter. Pizzuto cautioned that logistics expenses could face pressure in the third quarter because of the three planned distribution-center openings, though he said the facilities should become more efficient over the longer term.
Store Format, Technology and Competition
All new stores are opening under the company’s upgraded format, according to Hatoum. The format is larger and includes additional refrigerated capacity. Management said these stores are performing better than older formats, while existing stores also continue to perform well. Pizzuto said the 2026 store cohort’s ramp-up has remained consistent with the unit-economics expectations the company outlined in the fourth quarter.
Hatoum said the company is testing the first phase of a new enterprise resource planning system. He said artificial-intelligence tools have accelerated programming work, allowing the company to bring forward planned features and add capabilities that had initially been expected later in the development timeline.
The updated point-of-sale system is intended to provide capabilities beyond processing product transactions and could give the company optionality to offer additional customer services in the future, Hatoum said.
Regarding competition, Hatoum said the company has not seen anything new from FEMSA beyond what was already visible in the market. He said Mexico remains a highly competitive retail market but has sufficient potential for several discount-sector participants to grow.
Management also said real estate availability has not constrained expansion. Hatoum said the company sees a “tremendous” runway in Mexico and remains comfortable with the size of its current new-generation store format. Parking is added where appropriate and available, particularly in more suburban locations, he said.
About BBB Foods (NYSE:TBBB)
BBB Foods Inc, through its subsidiaries, operates a chain of grocery retail stores in Mexico. It offers household cleaning, personal hyenine, cosmetics and beauty, pharmacy, and general merchandise products, as well as jellies and desserts, foods and drinks, pet supplies, coffee, tea, chocolates, breads, dry and frozen foods, snacks and sweets, and toilet papers and napkins. The company also provides branded, private label, and spot products. It serves low-to-middle income households through online channels.
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