Alsea (ALSEA) Q3 2024 earnings summary

Executive summary

• Q3 sales rose 9.3% year-over-year to MXN 20.3 billion, with same-store sales up 7.7% and digital orders contributing 32.5% of total sales.

• EBITDA increased 9.3% to MXN 2.85 billion, maintaining a 14% margin.

• Net income dropped 65.6% year-over-year to MXN 186 million, mainly due to higher financing costs and negative FX impacts on debt.

• Expansion continued with 66 new stores in Q3 and 167 new units YTD, with strong digital and ESG progress.

• Loyalty programs reached 8 million active users, and digital orders reached 32.2 million.

Financial highlights

• Mexico sales up 7.9% to MXN 10.6 billion; Europe up 13% to MXN 6.4 billion (0.9% in euros); South America up 7% to MXN 3.2 billion.

• Adjusted EBITDA: Mexico +14.8% to MXN 2.6 billion; Europe -1.3% to MXN 883 million; South America -28.8% to MXN 445 million.

• EPS for Q3 was MXN 1.98; post-IFRS 16 EPS rose 54% to MXN 3.65.

• CapEx in Q3 was MXN 4.2 billion, with 58% for store openings/remodels.

• Free cash flow for the first nine months was negative MXN 1,886 million, mainly due to increased CAPEX and working capital needs.

Outlook and guidance

• Confident in meeting expansion and EBITDA margin guidance, though top-line may fall short due to H1 impacts.

• Expect seasonality from mid-November to mid-January to support results.

• South America expected to recover half of lost traffic in Argentina in 2025; Colombia and Chile to see low- to mid-single-digit transaction growth.

• Management remains confident in continued growth, with digital and loyalty channels driving engagement.

• Anticipates a strong finish to the year, supported by ongoing commercial strategies and operational improvements.