La Comer (LACOMER UBC) Q2 2023 earnings summary

Executive summary

• Q2 net sales rose 14.6% YoY to MXN 9,741m; same-store sales increased 10.5%, ahead of ANTAD self-service growth of 8.1%.

• H1 net sales grew 14.5% to MXN 18,457m, with same-store sales up 11.0%; growth extended across formats, regions and categories.

Financial highlights

• Q2 gross profit increased 17.0% to MXN 2,707m; operating profit rose 22.1% to MXN 677m.

• Q2 EBITDA grew 15.2% to MXN 1,014m; net income increased 13.7% to MXN 552m.

• H1 operating profit rose 26.8% to MXN 1,403m; EBITDA increased 18.7% to MXN 2,060m and net income grew 20.9% to MXN 1,170m.

• Q2 financial income was MXN 80m and financial expenses were MXN 56m.

Outlook and guidance

• The 2023 store-opening plan was reduced from six to four, with two openings delayed to H1 2024; two or three remodels are planned for 2023.

• Expansion targets more than 100 stores by year-end 2026, versus 54 in 2016; targeted mix is 50% La Comer format and 25% each City Market and Fresko/Sumesa.

• July sales growth remained healthy but was slightly below H1 levels; La Temporada Naranja was delivering good results across its offers.

• Newer Fresko stores are expected to progress toward mature-store profitability.