Grupo Gigante (GIGANTE) Q4 2023 earnings summary

Executive summary

• FY2023 revenue rose 5.6% YoY to MXN 33,980.9m; EBITDA increased 17.6% to MXN 5,103m, while net income grew 2.8% to MXN 2,069.7m.

• Q4 revenue increased 2.5% YoY to MXN 8,393.7m, but consolidated net income fell 22.9% to MXN 657.4m, mainly due to higher income taxes.

Financial highlights

• FY gross profit rose 10.1% YoY to MXN 14,157.1m; gross margin expanded to 41.7% from 40.0%.

• FY operating income increased to MXN 4,102.0m from MXN 3,307.9m; Q4 operating income was MXN 1,133.5m versus MXN 736.1m.

• FY same-store sales rose 4.3% to MXN 32,585.7m; Q4 same-store sales increased 0.5% to MXN 7,934.6m.

• FY net finance costs rose 31.0% to MXN 1,604.8m, chiefly reflecting the accounting-policy change for derivative valuations; FY tax expense was MXN 932.0m versus MXN 410.7m.

Outlook and guidance

• Strategic priorities include disciplined debt management, cash-generative organic growth, e-commerce, digital transformation, efficiency, selective expansion, and technology, logistics and distribution synergies.

• Panda Express territory rights in Mexico were extended for 10 years from Jan. 1, 2024, with a schedule of new restaurant openings; each new location receives a 10-year license, renewable for another 10 years.