Chedraui (CHDRAUI) Q2 2024 earnings summary

Executive summary

• Consolidated sales grew 4.5% year-over-year to MXN 67,453 million, with all business segments contributing to growth.

• Same-store sales in Mexico rose 5.5%, outperforming ANTAD for the 16th consecutive quarter.

• Chedraui USA achieved a 1.4% increase in same-store sales in dollars, led by El Super and Fiesta Mart.

• EBITDA margin reached a record 9.1%, up 9 basis points year-over-year.

• Net income increased 8.3% to MXN 2,017 million, with ROE improving 43 basis points to 18.5%.

Financial highlights

• Gross profit rose 7.6% to MXN 16,198 million, with margin expanding 70 basis points to 24.0%.

• EBITDA grew 5.5% to MXN 6,136 million, margin at 9.1%.

• Net cash debt to EBITDA ratio improved to -0.02x, reflecting a net cash position.

• CapEx reached MXN 5,036 million, up 63% year-over-year, supporting expansion and a new US distribution center.

• Net income was MXN 2,017 million, up from MXN 1,862 million.

Outlook and guidance

• Expectation to maintain 7% same-store sales growth in Mexico for the year.

• Management remains bullish on Q3 and Q4 performance, especially for El Super, Fiesta Mart, and Smart & Final.

• Anticipates less OpEx pressure in 2025 due to a lower minimum wage increase.

• Prepared for a more competitive pricing environment as inflation trends moderate.

• Continued focus on margin expansion and profitability, with ongoing improvements in ROE and net debt to EBITDA ratio.