Alsea SAB de CV ((MX:ALSEA)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Alsea SAB de CV’s recent earnings call presented a mixed bag of sentiments, with several positive highlights such as robust sales growth, strong digital engagement, and a remarkable surge in net income. However, the company also faced challenges, including a contraction in EBITDA margin, declining Burger King sales, and a slowdown in South American markets. The September consumption slowdown was a notable concern across various geographies and brands.
Overall Sales Increase
Alsea reported a 5.7% year-over-year increase in total sales, reaching MXN 21 billion. When excluding foreign exchange effects, the growth was even more impressive at 6.7%. This indicates a strong performance in the core business operations despite external economic pressures.
Strong Digital Engagement
The company saw a significant boost in digital engagement, with loyalty sales increasing by 7.9% to MXN 5.1 billion. Digital orders accounted for 37.4% of total sales, showcasing Alsea’s successful integration of digital strategies to enhance customer experience and drive sales.
Net Income Surge
Alsea’s net income surged by an astounding 559% year-over-year, reaching MXN 512 million. This dramatic increase highlights the company’s effective cost management and operational efficiencies during the quarter.
Successful Expansion
The company expanded its footprint by opening 46 new stores, comprising 35 corporate units and 11 franchises. This expansion focused on high-traffic and high-potential locations, aiming to capture more market share and enhance brand presence.
Positive Brand Performance in Select Markets
Starbucks South America and Domino’s in Colombia showed strong same-store sales growth of 9.6% and 9.1%, respectively. These performances were driven by strategic initiatives and market-specific adaptations, particularly in Argentina and Colombia.
EBITDA Margin Contraction
Despite a 1.8% increase in EBITDA, Alsea experienced a margin contraction of 50 basis points year-over-year. This suggests challenges in maintaining profitability amidst rising costs and competitive pressures.
Burger King Sales Decline
Burger King Alsea faced a decline in same-store sales, excluding Argentina, with a 1.4% decrease overall and a 1.7% decrease in Mexico. This reflects challenges in the fast-food segment, requiring strategic adjustments to regain momentum.
South America Sales Decline
Sales in South America fell by 4.7% to MXN 3.1 billion, indicating a challenging consumption environment in the region. This decline underscores the need for targeted strategies to address market-specific issues.
September Consumption Slowdown
A significant slowdown in consumption was observed in September, affecting Alsea’s performance across various geographies and brands. This slowdown highlights the broader economic challenges impacting consumer spending patterns.
Forward-Looking Guidance
In light of the weaker-than-expected consumer environment in September, Alsea revised its 2025 guidance. The company now anticipates high single-digit top-line growth and low single-digit EBITDA growth, adjusted from previous expectations. Despite market challenges, Alsea remains committed to digital growth, sustainability, and strategic expansions, with plans to open more stores and enhance customer experiences.
In conclusion, Alsea SAB de CV’s earnings call reflected a cautiously optimistic outlook, with strong sales growth and digital engagement counterbalanced by regional challenges and margin pressures. The company’s strategic focus on expansion and sustainability initiatives positions it well for future growth, despite the current market headwinds.