Alsea (ALSEA) Q3 2024 earnings summary

Executive summary

• Q3 2024 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, growing 35%.

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

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

• 66 new stores opened in Q3 and 167 new units year-to-date, with loyalty programs reaching 8 million active users.

• Digital and loyalty channels expanded, with digital orders at 32.5% of sales and loyalty sales at MXN 4.7 billion.

Financial highlights

• Sales in Mexico grew 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.

• Gross profit reached MXN 13.8 billion, up 10.5% year-over-year.

• 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 for the year, with seasonality expected to support Q4 results.

• Management expects recovery in France and South America, with targeted commercial strategies and cautious expansion in challenging markets.

• Digital and loyalty programs are expected to continue driving engagement and value creation.

• Focus remains on store openings, remodelings, and ESG initiatives, including renewable energy investments.