Becle (CUERVO) Q1 2025 earnings summary

Executive summary

• Entered 2025 facing a challenging industry environment with cautious consumer behavior and economic uncertainty, but core tequila category remains resilient and premiumization strategy is central to growth ambitions.

• Net sales rose 7.5% year-over-year to MXN 9.6 billion, driven by favorable FX, premiumization, and geographic mix.

• Gross margin expanded 570 bps to 57.8%, the highest since Q2 2018, aided by lower agave costs and improved mix.

• Net income grew 15.5% year-over-year to MXN 1.2 billion, with EPS at MXN 0.32.

• Management remains confident in navigating near-term challenges, emphasizing premiumization and disciplined brand investment.

Financial highlights

• Consolidated net sales increased 7.5% year-over-year to MXN 9.6 billion; U.S. & Canada sales up 20.1%, Mexico down 13.8%.

• Q1 EBITDA rose 22% to MXN 2.2 billion, with EBITDA margin expanding 270 bps to 22.5%.

• Gross profit reached MXN 5.6 billion (+19.2% year-over-year); gross margin at 57.8%.

• Cash and cash equivalents reached MXN 11 billion as of March 31, 2025; total debt at MXN 26.7 billion.

• Total volume declined 7.6% year-over-year, with notable decreases in Mexico and Rest of World regions.

Outlook and guidance

• Full-year guidance reaffirmed, expecting mid-single-digit net sales value growth in Mexican peso terms.

• Margin levels expected to remain strong, supported by FX, mix improvements, and cost optimization.

• AMP as a percentage of net sales held at 20.9%, in line with full-year guidance of 20-22%.

• Management expects continued focus on premiumization and long-term value creation.

• Low agave prices expected to persist for several years, continuing to benefit profitability.