Genomma Lab Internacional (LABB) Q1 2026 earnings summary

Executive summary

• Growth initiatives are underway, focusing on distribution expansion, in-store execution, and increased media investment, leading to early signs of market share recovery in Mexico despite a tough consumption environment.

• Like-for-like sales declined 3.9% year-over-year, mainly due to weak consumption in Mexico and disruptions in the US Hispanic retail market, partially offset by 5.3% growth in LATAM.

• Net sales declined 4.9% year-over-year, primarily due to a 13.9%-14% appreciation of the Mexican peso.

• Gross margin expanded 61 basis points to 63.4%, reflecting productivity gains and initiatives.

• EBITDA margin declined 96 basis points to 22.8% due to increased OpEx and investment in growth initiatives.

Financial highlights

• Net sales: MXN 4,190.6 million, down 4.9% year-over-year.

• Gross profit: MXN 2,657.6 million, up to 63.4% of sales.

• EBITDA: MXN 956.4 million, margin of 22.8%, down 8.7% year-over-year.

• Net income: MXN 494.6 million, margin of 11.8%, stable year-over-year.

• Free cash flow (TTM): MXN 1,964.5 million, down 31.6% year-over-year.

Outlook and guidance

• Recovery in Mexico is now expected to be delayed to Q3 or Q4 2026, with margin pressure anticipated through Q2 and Q3 due to increased promotional activity and investment.

• EBITDA margin guidance revised to expect pressure in the short term, with a return to 23%-24% by late 2026 or early 2027.

• E-commerce is projected to grow 30% in 2026, reaching 7%-8% of consolidated sales.

• Growth initiatives are expected to gain traction and improve operating leverage in the second half of 2026.

• Fundamentals remain solid despite prolonged weak consumption in Mexico.