Prepared remarks
Good morning, everyone. My name is Daniela, and I will be your conference operator. Welcome to Tiendas 3B's second quarter 2026 conference call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer session after the speakers' remarks, and instructions will be given at that time. Please ensure that your full name is displayed correctly on Zoom. If not, please take a moment to edit your display name. Also note that this call is for investors and analysts only. Questions from the media will not be taken, nor should the call be reported on. Any forward-looking statements made during this conference call are based on information that is currently available to us. Today, we are joined by Tiendas 3B's Chairman and Chief Executive Officer, Anthony Hatoum, and Chief Financial Officer, Eduardo Pizzuto. I will now turn the call over to Anthony. Please go ahead.
Good morning, and thank you for joining us today. I will begin with a review of our operating results for the quarter, and will be followed by our CFO, Eduardo Pizzuto, who will provide an overview of our financial performance. We will conclude with our Q&A session. We delivered another strong quarter, sustaining and even building on the momentum we achieved in the first quarter. Here are the key highlights from our second quarter results. We opened 155 net new stores during the quarter, bringing our total store count to 3,624 as of June 30, 2026. Over the last 12 months, we have opened 593 net new stores. We also opened one new distribution center, expanding our network to 21 regions as of the end of June. Same-store sales grew 20% compared to the second quarter of 2025. Total revenue increased 39% year-over-year to MXN 26 billion. Reported EBITDA reached MXN 960 million. Excluding non-cash share-based compensation, EBITDA increased 44% to MXN 1.6 billion. For the first half of the year, cash flow generated from operating activities reached MXN 4.3 billion, representing 119% growth compared to the first half of 2025. Let's now turn to our operational performance. As I mentioned, we opened 155 net new stores during the second quarter. Over the last 12 months, we have opened 593 net new stores, representing 20% growth in our store base compared to June 2025. Our expansion strategy remains unchanged. We continue to balance densifying our presence in existing regions while selectively expanding our footprint in others. Our revenue growth remained exceptionally strong, and we believe 3B continues to be among the fastest-growing retailers globally. Total revenue reached MXN 26 billion in the second quarter, up 39% year-over-year. Same-store sales increased 20%, reflecting another quarter of outstanding performance. This strong growth continues to be driven by ongoing improvements to our value proposition, increasing brand awareness, and growing customer loyalty. Our same-store sales performance continued to significantly outperform the market. During the quarter, we maintained a gap of more than 20 percentage points versus ANTAD, while our internal inflation remained very low. I will now pass the microphone to Eduardo.
Thank you, Anthony. Good morning, everyone. Sales expenses as a percentage of revenue decreased by 56 basis points year-over-year to 10% in the second quarter of 2026. Most of the expense lines showed operating leverage, including labor. Administrative expenses, excluding share-based payment, increased by 57 basis points year-over-year. As seen in previous quarters, administrative expenses reflect our continuing investment in talent and expansion into new regions to support our accelerated growth. In the second quarter of 2026, administrative expenses include a one-time cash expense of MXN 37 million related to the equity follow-on offering in May 2026. With respect to the share-based payment expense, these are non-cash and already reflected in our fully diluted share count. Additional details are available in the appendix of this earnings release, where we also provide projections for this non-cash expense. EBITDA for the second quarter of 2026, excluding non-cash share-based payment expense, increased 44% to MXN 1.6 billion, driven by strong sales growth, improved gross margin, and operational efficiencies. The adjusted EBITDA margin increased by 21 basis points year-over-year. EBITDA in the second quarter of 2026 includes a one-time cash expense of MXN 37 million related to the equity follow-on offering in May 2026. Excluding this impact, the adjusted EBITDA margin in the second quarter of 2026 was 6.2%. As you know, we don't drive to an EBITDA target; it will naturally continue to increase over time, driven by our disciplined execution. Our business model generates strong operating cash flow through our structurally negative working capital model. As of June 2026, adjusted negative working capital reached MXN 10.2 billion compared to MXN 7.1 billion in 2025, excluding IPO and follow-on proceeds. This represents approximately 11.2% of total LTM revenue, also excluding IPO and follow-on proceeds. Our operating cash flow fully funds our organic expansion. I will now turn the call back over to Anthony for final remarks.
Thank you all for joining us today and for your continued interest in Tiendas 3B. We delivered a strong first half of 2026 with consistent and solid execution across our key operating and financial metrics. Our high-growth business model has continued to demonstrate its resilience across different economic environments. It delivers attractive unit economics, generates strong cash flow, and becomes even more competitive as we scale. We remain confident in the significant long-term growth opportunity for Tiendas 3B. Thank you, and we will now open the call for your questions.
Questions and answers
Thank you. We will now conduct a Q&A session with Anthony Hatoum and Eduardo Pizzuto. If you would like to ask a question, please press the Raise Your Hand button that is located at the bottom of the screen. We remind you that all lines have been placed on mute. So when it is your turn to ask a question, you will be given permission to speak, and you will then be able to unmute yourself and ask your question. Our first question comes from Andrew Ruben at Morgan Stanley.
Hi. Thanks very much for the question. I am interested to understand a bit more about the gross margin performance. Just thinking about some of the drivers, you mentioned stronger commercial margins, so trying to understand what might have changed, if anything, quarter-on-quarter there. Then second, the lower transportation costs. I think this is the first time you have mentioned that in a while, despite the distribution center build-out. So trying to understand these drivers, how much they contributed, and how that pertains to any forward outlook on gross margin would be very helpful. Thank you.
I will take the gross margin question, Andrew. As you know, it is a dynamic process in the sense that gross margin is the sum of the margins of all the SKUs we currently carry. The main driver is scale: we become more efficient in buying and manufacturing goods, we obtain better input conditions, and we improve the logistics of moving those goods, which increases the overall margin pool. For private-label products, the producer and we share a larger total margin. Then we decide at what price to set products. It is an ongoing adjustment of prices where we try to optimize volumes and dollar margin. The result you see is the aggregate of many small improvements across the portfolio. Will the trend continue? Very likely. You should see improvement as we scale and become more proficient. There comes a point where, in percentage terms, you may pass more through to price than you retain, but the most important metric is the MXN dollar margin generated. As long as that continues to grow healthily, as we see here, we're very pleased.
I'll take the second portion, Andrew. Good morning. In terms of transportation expenses, as we continue to grow and gain scale, we become more efficient in all operating line items. Specifically for logistics in Q2, two factors worked in our favor. First, we have ongoing efforts to optimize transportation costs across all regions, not only new ones. Second, for the distribution center we opened in Q2, we managed the pre-operating expenses for that region better. We will apply those learnings to future regions. I'll also give you an update on distribution centers: in addition to the one we opened in Q2, in the past few weeks we opened two additional distribution centers, and we expect to open a third one within Q3, for a total of three DCs in Q3. I mention this because we might see some pressure on logistics expense as we add three new distribution centers.
Right. That's very helpful color. Thank you both, and congrats on the quarter.
Thank you.
Thanks.
Thank you. Our next question comes from Bob Ford at Bank of America.
Hey, thank you very much. Good morning, Anthony, Eduardo, Joaquin, and again, congratulations as well. With respect to same-store sales, how much of the growth is ticket versus traffic? How should we think about the year-on-year improvements that you are seeing in terms of item counts per transaction? I was also curious, you have some phenomenal innovation. How much of that growth is coming from new SKUs? Additionally, could you give us a little update on the progress with the ERP rewrite? There has been a revolution in programming over the last 12 months. How is that speeding up development or maybe allowing you to run a little leaner than you expected? How should we think about deployment? Both in terms of functionality in the system, as well as any complementary changes you may need in logistics or the point of sale.
Hi, Bob. Good to hear from you and many questions. Let me start with same-store sales drivers. About two-thirds of the growth is explained by volume and one-third by price; within price, the larger factor is better mix. We continue to see very low inflation in our price numbers. When we look across categories, all current categories are growing at various rates; even categories where we are relatively well penetrated are still growing, albeit slightly slower than newer categories that started from a low base and are growing rapidly. We are very careful about introducing new products and categories. We keep SKU counts low, which brings many benefits. Every time we add an SKU, it must rotate and be highly accepted; we frequently drop less attractive SKUs. Our stores can handle a higher SKU count, but we are conservative in adding new ones. Regarding the ERP, I am very pleased with progress. We are testing phase 1, and it is going well. AI tools have accelerated our ability to program. We have brought forward many items we had planned to do later and added more features we thought would come later. Overall, we are on track and it is going well. I think there was a last part to your question that I may have missed.
It was actually kind of plugging into, maybe you are signaling this when you talk about the broader platform opportunity. But I was asking you a little bit, too, about how you are thinking about complementary changes to the supply chain or the point-of-sale systems and just trying to get a better sense for the calendar of deployment and maybe the functionality that we will expect over time.
There's no doubt that in this new generation of ERP, our point of sale becomes much more capable than simply ringing up a product. That's the idea: to give us optionality to offer more services to the customer down the road. In logistics, as you get bigger you have more opportunities to optimize. We haven't done much on the backside of logistics historically, and that is a very interesting opportunity to explore as we scale.
Very helpful. Thank you. Again, congratulations.
Thanks, Bob. Thanks, Bob.
Thank you. Our next question comes from Joseph Giordano at J.P. Morgan.
Hi, good morning, everyone. Good morning, Anthony. Thanks for taking my question. I want to explore a little bit, and Eduardo, sorry, to explore a little bit the upgraded store format you guys have been talking about. It's a little bit larger, more doors for refrigerated goods. I'd like to understand, what's the percentage of new stores that are coming under the new format? If it's 100%? And second, what's the typical sales uplift we are seeing from those locations? And last, how should we think about the ramp-up? Looks like the ramp-up of the new stores is much faster than previous vintages. Thank you very much.
Hi, Joe. Good to hear from you. Yes, 100% of our new stores open under the new format. We want to maintain format discipline going forward. We selected this upgraded format because it performs better than our older stores. Our older stores still perform extremely well. Eduardo, do you want to add on ramp-ups?
Yes. On ramp-ups, we're very happy with how these stores are performing. If you remember, we updated our unit economics analysis in Q4, and the trend is tracking against what we projected. Pretty much all our stores are tracking in the direction we expected. There is no new surprise other than ramp-ups continue to be very consistent, and we're pleased with the evolution of our 2026 vintage.
Thank you.
All right. Our next question comes from Ulises Argote at Santander.
Hi, Anthony, Eduardo. Thanks for the space for questions. I had a follow-up to a point you made earlier, Eduardo. You guys opened close to 280 stores in the first six months of the year, and this came with only one additional distribution center. I just wanted to get some color if this is more related to some temporality effects on the opening of distribution centers. You already said, Eduardo, there will be three new ones in the quarter, but I wanted to get a sense if you're finding any efficiencies being able to serve a broader store base from each distribution center, given what we saw in the first half of the year. I appreciate any thoughts there. Thank you.
Hi, Ulises. Thank you. We are on track with our planned openings for the year. As we've discussed in previous calls, each new distribution center benefits us in two ways: it increases our footprint and improves efficiency because transportation expenses are reduced. We've seen that benefit in all our opened DCs. For the back half of the year, we are opening three additional DCs in Q3. If we see opportunities to open more in the back half of the year, we may do so because these centers eventually make us more efficient.
No, I think it was just to understand if there was any temporality into what we saw in the expansion in the first half, with just one DC being added now.
As I mentioned earlier, we benefited this quarter from the two factors I described: lower transportation expense due to optimization efforts and better management of pre-opening expenses for the region. Those learnings will be applied to future regions. Just a heads-up: we might see some pressure on logistics expense in Q3 because we're opening three additional DCs, but in the longer run these will become more efficient.
No, that's very clear. Thanks a lot. Gracias.
Gracias. Thank you, Ulises.
Thank you. Our next question comes from Héctor Maya at Scotiabank.
Hi, Anthony, Eduardo. Congrats on the strong results. Just wondering if you saw any tailwind from the World Cup, and if so, how much do you think it contributed to same-store sales? Also, wanted to know how you are thinking about the increase in the pace of G&A investments in the second half, or if the level we saw in Q2 could be a good run rate. Thank you very much.
Hi. No, the World Cup did not have a relevant impact on our sales. It was hard to see any material effect. In terms of G&A expenses, Eduardo has a better handle on that.
Sure. Hector, as you know, we don't provide guidance on these metrics, but it is fair to assume we will continue to invest in talent because we are convinced it drives significant value. We will continue to invest in the back half of the year. I think it's reasonable to assume a level similar to Q2, roughly around 3% of revenue in the short term.
Perfect. Very clear. Thank you. Thank you very much.
Our next question comes from Irma Sgarz at Goldman Sachs.
Thank you for the opportunity to ask my question. Just picking up on that G&A point, as you've made clear in your previous answer, you're looking to continue to invest in talent. Can you be a little more explicit in terms of which areas of the organization you're looking to add talent? You've brought some important people onto the team who are market facing over the last 12 months, but I'd be curious to hear a bit more about the back end—the areas we don't directly see. Which areas are you adding talent in? Or is this more about retention, incentives, and employee value proposition investments on the G&A side? Also, I know you're testing in some stores to go cardless and that you have a lot of cash transactions in your stores, but could you share what you've learned there and whether there's any meaningful margin gain from that or incremental margin gain you envision? Thank you.
Let me start with the cardless test. This is a test where we removed credit and debit card payments in some stores to observe the effects. At a high level, the impact was non-material. It is a test and does not imply expansion. At Tiendas 3B, we always have multiple tests running with the objectives of generating more revenue, reducing costs, reducing risk, or creating more value for the customer. On G&A investment, our investments are much more focused on adding and densifying talent across critical areas rather than primarily improving salaries and benefits. You will see hires in purchasing, logistics, systems, and other specialty areas where one person can have a dramatic impact. We are aware this adds to G&A, but we are convinced these are high-return investments that create significant value for the company.
And perhaps as we think about 2027, should we consider this an ongoing process?
Yes. Talent acquisition is an ongoing process. There is no hard limit to adding talent, but the guiding principle is the same: if we add someone, the value they contribute should be significantly more than their cost, and that has been the case so far.
So the dilution we should think about or the operating leverage should continue to come more through the selling expense line?
Exactly.
Thank you. Our next question comes from Jorge Izquierdo at BTG Pactual.
Hi, good morning, Anthony, Eduardo. Thanks for the space for questions, and congrats on the results. I have a quick one regarding store size going forward. As basket size increases, how are you thinking about store sizes and the need to have parking availability in the future?
Interesting question. At this stage, we're very comfortable with the current size of our new-generation stores. The decision to include parking depends on whether the location is suburban or urban. In urban areas, parking is difficult and often not feasible. When there's a need for parking and the site allows it, we include parking.
Okay. Thank you very much, Anthony.
Thank you. Our next question comes from Antonio Hernandez at Actinver.
Hi. Good morning. Congrats on your results. Just a quick one regarding working capital. As new categories are being introduced or even piloted, how should we see working capital going forward? There's, of course, an improvement, but how much should we weigh in these new categories? Thanks.
Hi, Antonio. Thanks for your question. Our overall philosophy is to carry items that have very high rotation. When we evaluate a new item or category, it must meet that principle: high rotation and strong value. Therefore, there should be no material impact on working capital because new items we add are fast-rotating. If you look at our trends over the past few years, we've slightly improved our inventory days; inventory days are below 20 days, and that's what we expect going forward.
Okay, perfect. Thanks a lot.
Thank you. Our next question comes from Joel Thomas at HSBC.
Good morning, Anthony and Eduardo. Thanks for the space, and congratulations on the strong results. Couple of things, please. Firstly, same-store sales: as you pointed out, it was +20% on a comp of +17% from last year. If you look at this on a two-year basis, there is a real meaningful acceleration. Given that the improvement sounds like it is coming from volume more than anything else, is that two-year momentum the best way to think about how to model this into the future and the sort of performance that can be maintained? Secondly, I had a question on competition because we are hearing a lot of noise in the market including from FEMSA about their rollouts. I just wondered what you are seeing in terms of the competitive intensity in the hard-discounter space, and what you are doing to stay ahead of that competition specifically.
Let me address the competition first. Regarding FEMSA, we do not see anything beyond what we have already experienced. We operate in a very competitive market and have for many years. I continue to believe the Mexican market has significant potential and room for several players to thrive in the discount sector. From our side, nothing changes — we continue our execution. Regarding same-store sales, it doesn't take much for us to see an increase: selling one more item per customer materially increases same-store sales. We see the increase in items per customer as something that will happen naturally because our products and value proposition keep improving. We would be conservative, but remain positive that this trend can continue.
Thanks.
Thank you. Our next question comes from Isabel Alamas at UBS.
Hi, Anthony, Eduardo. Thank you for the opportunity to ask questions. I have two questions. First, on growth: how much of growth has been coming from new customers versus increased share of wallet from existing customers? Also, could you elaborate on the main initiatives you have in place to expand items per transaction? If the company is gaining increasing relevance within customer share of wallet, is that a trend we should expect to continue? Second, regarding real estate: if you continue to see solid availability for real estate for your pipeline, whether you see better negotiation conditions with landlords or any change there, and given your solid performance and healthy cash generation, whether you could consider accelerating the expansion pace.
Let me start with real estate. There are no constraints on real estate for us; the runway in Mexico is tremendous, and we have not seen limitations on that front. Regarding growth from new customers versus increased share of wallet, historically it's been a mix of both and also depends on store vintage. Older vintages capture new customers more slowly; newer stores capture customers faster. We're seeing faster ramp-ups, so new customers are arriving faster. Across the board, we expect both more customers and increasing penetration of wallet. Increased penetration can come from adding new SKUs, but even without adding SKUs, our existing portfolio is not fully penetrated. There is still substantial potential to increase same-store sales with the current assortment, and we monitor that closely. We are confident there is still a lot to capture without necessarily adding new SKUs.
That is clear. Thank you.
Thank you. Our next question comes from Froylan Mendez at J.P. Morgan.
Hola, Eduardo, Anthony. Thank you very much for taking my question. I wanted to dig a little more into gross margin. In the past, you have said not to extrapolate a single quarter margin into the full year. It sounds like the extra openings in the third quarter could lead to a giveback on the gross margin that we saw this quarter. Is there anything seasonal in the gross margin during this quarter, such as World Cup campaigns or changes in DC usage? Some granularity on gross margin for this quarter and expectations for the next would be appreciated. Secondly, on the stock option plan: we know the employee stock option plan had a restricted period during the earnings season. I understand it is liberated tomorrow after 48 hours of the earnings release. Any comments on mechanisms that avoid disorderly sales from management who may want liquidity after many years of receiving stock options would be appreciated. Thank you.
Thank you. On the options, you might expect people to rush to sell, but I do not believe that will be the case. We already have mechanisms in place to ensure any natural sell-downs are orderly and timely. Regarding gross margin, we do not see seasonality in our gross margins. There is quarter-to-quarter volatility driven by SKU-level dynamics, but the longer-term trend is positive. As I mentioned earlier, there can be a point where percentage gross margin stabilizes while MXN gross margin continues to increase as we grow and manage pricing. The most important thing is the MXN gross margin increasing healthily over time, which reflects the positive things we are doing.
Thank you. Appreciate it.
Thank you. That is all the time we have for questions today, so that concludes our Q&A session. I would like to hand the call back over to Anthony Hatoum for his closing remarks.
As always, we appreciate and thank you for your interest and participation in our company. Thank you to the analysts covering us and to all the shareholders participating today. Of course, thank you to all the 3B employees and our customers who make all of this possible. Till next time, thank you very much.
Thank you, all. You may now disconnect.