Mexico City-based BBB Foods Inc. (NYSE: TBBB), a major player in the grocery hard discount retail sector in Mexico, disclosed its third-quarter financial outcomes for 2024 today.
The report, based on International Financial Reporting Standards, showed significant growth with a 29.8% increase in total revenue compared to the same quarter in the previous year, reaching 14,834 million Mexican Pesos.
The company's aggressive expansion strategy was evident as it launched 131 new stores during the quarter, bringing the total to 2,634 outlets. This expansion contributed to the revenue uptick, along with an impressive 11.6% surge in Same Store Sales.
The company's EBITDA also saw a significant rise of 54.0%, amounting to 688 million Pesos, attributed to higher sales volume and efficient operational cost management.
Chairman and CEO K. Anthony Hatoum expressed confidence in the company's core strategies, which focus on value delivery, disciplined execution, and swift store expansion, as the drivers for sustainable growth. Hatoum thanked investors for their continued support and trust in the company's direction.
Financially, BBB Foods experienced a net profit of 258 million Pesos for the quarter, a stark contrast to the net loss of 339 million Pesos in the third quarter of 2023. The improvement was partly due to a decrease in financial costs and favorable exchange rate fluctuations.
The company's balance sheet showed a healthy liquidity position with 1,269 million Pesos in cash and equivalents and an additional 2,964 million in short-term bank deposits. The cash flow statement highlighted a 22.4% increase in net cash flows from operating activities for the first nine months of 2024 compared to the same period in 2023.
BBB Foods' performance metrics demonstrated its effective business model and operational efficiency, with a notable increase in the number of stores opened compared to the previous year and consistent Same Store Sales growth.
This financial summary is based on the information provided in the company's SEC filing. For further details and to participate in the earnings discussion, BBB Foods will host a conference call on Tuesday, November 26, 2024.
In other recent news, BBB Foods Inc has reported a significant increase in its Q2 revenue, achieving Ps. 13,574 million, marking a 27.5% rise compared to the same period last year. This surge is largely attributed to revenue from both established stores and newly opened locations.
The grocery discounter further expanded its store count by over 20%, now boasting a total of 2,503 stores nationwide. Alongside this, the company reported an EBITDA of Ps. 689 million, a 43.2% increase from the previous year, and a net profit for the quarter of Ps. 331 million, a substantial leap from Ps. 71 million in the second quarter of 2023.
Jefferies, which recently started coverage on BBB Foods, has assigned a Hold rating to the company's stock, with a price target set at $33.00, suggesting a confident outlook on the company's ability to grow.
Scotiabank (TSX:BNS) also raised its price target for BBB Foods from $33.00 to $36.00, maintaining a Sector Outperform rating, reflecting confidence in BBB Foods' continued growth trajectory.
These recent developments are based on the company's earnings release and are prepared in accordance with International Financial Reporting Standards (IFRS).
InvestingPro Insights
BBB Foods Inc.'s (NYSE: TBBB) impressive third-quarter results are further illuminated by real-time data from InvestingPro. The company's market capitalization stands at $3.82 billion, reflecting its significant presence in the Consumer Staples Distribution & Retail industry. InvestingPro data shows a robust revenue growth of 27.51% in the most recent quarter, aligning with the company's reported 29.8% increase in total revenue.
InvestingPro Tips highlight that analysts expect sales growth to continue in the current year, supporting BBB Foods' expansion strategy and strong performance. The company's high return over the last year is evident in its impressive YTD price total return of 78.85%, showcasing investor confidence in its growth trajectory.
While BBB Foods reported a net profit this quarter, it's worth noting that the company was not profitable over the last twelve months according to InvestingPro Tips. However, analysts predict the company will be profitable this year, which aligns with the positive trend seen in the latest quarterly results.
For investors seeking deeper insights, InvestingPro offers 8 additional tips for BBB Foods, providing a comprehensive analysis of the company's financial health and market position.
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