Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Alsea SAB de CV (ALSSF) reported a 12.8% year-over-year increase in total sales, reaching 20 billion pesos.
• The company signed a strategic agreement with Chipotle Mexican Grill to launch the brand in Mexico, expected to open in early 2026.
• Digital orders accounted for 38.7% of total sales, confirming the effectiveness of Alsea's digital strategy.
• Loyalty sales grew by 21.6%, reaching 5.2 billion pesos, contributing to 27.4% of total sales.
• Alsea opened 34 new stores during the first quarter, with plans to accelerate openings as the year progresses.

Negative Points

• EBITDA decreased by 9.1% in the first quarter, with a margin contraction of 280 basis points.
• The decline in EBITDA was driven by negative calendar effects, depreciation of the Mexican peso, and labor disruptions in Chile.
• Same-store sales for Starbucks Europe declined by 2.2%, affected by last year's boycott in France.
• Burger King in Mexico reported a same-store sales contraction of 7.8%, driven by a slowdown in delivery and premium offerings.
• Net income for the first quarter decreased by 23.9% year-over-year to 335 million pesos.

Q & A Highlights

• Warning! GuruFocus has detected 8 Warning Signs with ALSSF.

Q: How confident is Alsea in meeting its 2025 guidance given the current macroeconomic conditions in Mexico? A: Federico Rodriguez, CFO, stated that Alsea remains committed to its 2025 guidance. The margin contraction was anticipated and included in their guidance. Despite a negative calendar effect and labor disruptions in Chile, they are confident in catching up in the remaining part of the year.

Q: Can you provide more details about the strategic agreement with Chipotle in Mexico? A: Armando Torrado, CEO, explained that the partnership with Chipotle is about introducing a modern fast-casual restaurant concept with high-quality ingredients. The first locations are expected to open in early 2026. The agreement includes leveraging Alsea's operational efficiency and digital convenience to build a scalable business.

Q: Are there any synergies expected from the Chipotle partnership with Alsea's existing operations? A: Armando Torrado, CEO, highlighted several synergies, including supply chain efficiencies, digital strategy alignment, and real estate opportunities. The partnership will benefit from Alsea's existing infrastructure and expertise in the Mexican market.

Q: How is Alsea managing the impact of raw material prices, particularly coffee, on profitability? A: Armando Torrado, CEO, mentioned that while coffee prices have increased significantly, Alsea's strategy focuses on preserving traffic rather than passing costs to consumers. They are leveraging Starbucks' advanced coffee purchasing strategies and exploring cost-saving opportunities in logistics and sourcing.

Q: What is the outlook for Starbucks in France, considering the recent boycott and recovery efforts? A: Christian Gurria, upcoming CEO, noted positive signs of recovery in France due to targeted initiatives and a lower comparable base from last year. They expect a steady but slow recovery, with a full recovery anticipated by mid-2026.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.