Earnings Call: Q2 2025

Jul 23, 2025

Summary

Q2 sales rose 11.3%, with 6.7% same-store growth and an 11.7% EBITDA margin, partly aided by a MXN 162 million land-sale gain. Expansion plans call for 4–6 stores in 2025 amid intense competition and cost pressures.

Good morning, everyone, and welcome to La Comer's second quarter results conference call. Before we begin, I would like to remind you that the information discussed today may include forward-looking statements regarding the company's financial and operating performances. All projections are subject to risks and qualms, and actual results may differ materially. Please refer to the detailed note on page 2 of the presentation. I would like to turn the call over to Mr. Rogelio Garza, Chief Financial Officer of La Comer. Please go ahead, Rogelio. Thank you, Yolotl, and welcome everybody to this conference call. We are going to present the results of the second quarter of the company. We're going to share the presentation. Just the highlights for the second quarter of 2025 of the results of La Comer is that the same-store sales growth at 6.7%. We had an increase in total sales of 11.3%. We had a gross margin of 28.7%, and the EBITDA margin for the quarter was 11.7%. First, we start with the sales. We continue having a healthy trend versus the market. It's very similar to what we have had in Sorry, is there a problem with the presentation at all, Yolotl? Excuse me, yes. Are we having a problem with the presentation or something? No, everything's okay. Aha. Okay, because- You're okay. Some members are having the Okay. We have a spread versus the market, and this is because the strategy of differentiation of La Comer that help us to increase our sales and to have an increase in sales that is above the market. We have a growth in all format regions and categories. In addition to that, we have been helping during this quarter because the Temporada Naranja, our orange season that is a very important campaign for us during the summer, has contributed very significantly to the sales of the company. By category, the product that have higher increases has the perishables and prepared food categories that have been growing above the rest of the categories in general, and we have been having very good increases in sales in the stores that are located in the western and northern regions of the country. If we see the e-commerce business, we continue having a good performance of this part of the business. The total participation of our own platform, La Comer en tu casa, is almost 8% during the quarter, and the participation of all the aggregators is a little bit above 4%. As we have mentioned in previous occasions, in aggregators, we have special agreements, associations with Uber Eats, Rappi, and DiDi, and these platforms contribute to these sales in this aggregator part of the business. As we have mentioned previously, our major strategy in e-commerce is our own platform. We are putting a lot of emphasis in growing this part of the business in La Comer en tu casa, and we have improved our processes in order to provide to the customers the good levels of service and the good quality of product that is typical for La Comer and is part of our strategy. Even in this part of the business, we try to provide this differentiation with very good service levels. In the gross profit area, we have, as we have mentioned before, a good increase in same-store sales and growth in prepared food and perishables. This is part of the change in the mix of products toward more value-added product. Every time we sell more differentiated product, that usually have higher margins. In addition to that, we have a very good inventory management. We have very good controls in order to be sure that the quality of the inventory is in good shape to be sold. In addition to that, as we have mentioned on other occasions, we try to have very good relationship with suppliers in a win-win, long-term relationship with them. We always pay them on time and have very fair relationships with suppliers. We think that this is the way to maintain a good commercial terms with them and provide win-win long-term situations with them that help us to improve our gross margin. At the EBITDA level, we have a very good increase in EBITDA. In some part, this is explained because we have an extraordinary profit of MXN 162 million due to a sale of land. This is a piece of land that is located adjacent to one of our stores that was not part of the operation of that store, and that doesn't have any impact in the operation of the company. But we have the opportunity to sell that asset in order to improve the cash of the company and doesn't affect the operation of the company. As we have had in previous reports, we have some pressures in expenses, especially labor expenses. It's an account that has been growing above the growth of sales, because some changes in the law that has to be managed by the company with productivity and other things. Additional to that, during this quarter, we have some increase in advertising expense. We have seen that every time there's more competition, and we need to increase our advertising presence in the market, and we increase our expenses in advertising. Additional to that, we have some expenses related with La Comer en tu casa. That is one part of the business in which we want to provide very good service and differentiate ourselves from the rest of the participants in the market. These expenses have, in some way, put some pressures in our margins. The highlights for the results of the first half of the year is that we have a same-store sales growth of 5.1%, an increase in total sales of 9.8%, almost 10%, a gross margin of 29.5%, and an EBITDA margin of 12.1%. We have seen very similar patterns in the first and the second quarter of the year. We want to take advantage of this conference call to present this new concept to the investment community. This is a new format that we opened the 2nd of July, just 2 days after the quarter. This is a format that is a restaurant with a gourmet store, that express all the good quality and all the differentiation and the good experience that we want to provide to our customers. The idea is to offer to our customers a new experience in the gourmet environment with a very good restaurant, with very good dishes in which you can enjoy in a restaurant, and together with a gourmet store in which you can have very differentiated products. In this new format, we express our strategy of differentiation very well with very good quality and service. The idea is to have this new format as a new avenue of growth for the company. The idea is that we can, additionally, to open new stores in our expansion plan with the stores that we are planning to open in the future. Additional to that, we can open this new avenue of growth for the company with these restaurants, with a store that combine all the features of a City Market with a new experience for our customers. The expansion plan for this year, we expect to open between 4 and 6 new stores during the year. We expect to open 1 or 2 stores of La Comer, 2 or 3 stores of Fresko, and 1 City Market is what we are expecting. Additional to that, a big one remodeling of one of our stores. In the sustainability and social responsibility, we continue to contribute into. We want to be good neighbors, and many of our customers enjoy the Chapultepec Park, and that's why we are contributing to this foundation. Additional to that, we help with Banco de Alimentos de México and Un Kilo de Ayuda. That is some institution that help people to provide food and help them. We are very committed. We continue using ecological-friendly packages in all our stores. In addition to that, we have done some serious efforts to improve the use of ecological sources of energy in many of our stores. With this, we can start some questions, if you have some questions of the presentation. Thank you, Rogelio. You are welcome. Yes, we have several questions in the queue. Please, Alejandro, start with your question. Yes. Thank you. Hola, Rogelio, Yolotl. Thank you for the space for questions, and congratulations on the results. Rogelio, I have two quick ones from my end. The first one will be on the formats. You mentioned that all of the formats are growing. Maybe you can give us a little more color on which formats are growing more. That would be very helpful, and also maybe breakdown of ticket and traffic for the company on the same-store sales. That would also be helpful. The second one is on working capital. I think that we see that days of suppliers are coming down a little bit, paying a little bit faster. Maybe you can elaborate if this is something of the quarter. Has anything changed, going forward, and what to expect? Thank you. Okay. Okay, all the formats are growing. During this quarter, we have the highest growth in Sumesa and Fresko are the two formats that are growing above. La Comer and City Market, by the way, are the largest part of the business. Those are the largest contributors to the sales of the company, are growing a very good level, very similar to the average of the company. But in this quarter, we have been growing more in Fresko and Sumesa. In tickets and traffic, I think the pattern is very similar to previous quarters, that we have been growing, and most of the growth is coming from the ticket, the growth in the average ticket. We have a small but constant growth in traffic. It's more or less very similar to what we have had in the past. Regarding the working capital, we haven't changed any policies or practices in our operations with suppliers or with inventory management. I think, as I mentioned during the presentation, we put a lot of emphasis in control the quality of the inventory. For us, it's very important. We think that we need to have inventory in order to increase sales, because if you don't have the product, you cannot sell those products to the customer. We have good levels of inventory. For us, it's very important to maintain the quality and that all that inventory is in good shape to be sold in the stores. That's why we put a lot of emphasis in some process of control in. That's why we don't have big increases in shrinkages of inventory or losses of that kind of things. We put a lot of emphasis in control the quality of the inventory. We don't have any changes in the policies of agreements with suppliers. These small diminishes in the suppliers account in the quarter is something that is not because we changed some process. It's something that we expect that is going to normalize. It's something very circumstantial to what happened during this quarter, but we don't change. We try always to have good agreements with the suppliers, but once we have an agreement with them, we always pay on time, and we have very fair relationship with suppliers. We think that is the way in which we can make win-win relationships in the long term. It's very clear, Rogelio. Muchas gracias. Okay. Okay, next question is from Froylan. Please, Froylan. Thank you. Hi. Thank you so much, Yolotl, Rogelio. I was wondering if you could give us your thoughts on how is competition performing in terms of pricing, if you are seeing any different strategy from any of your competitors, especially during the quarter. Secondly, when we compare your performance against ANTAD, and obviously against Walmex, their performance was very strong. Just wondering, in your view on what you see in the market, who is really underperforming? There has someone or a couple of other players that must be having a very negative performance to lead the ANTAD number so low, when you and other guys are outperforming. So who is the share giver in these circumstances, in your view? Thank you, Froylan. We have seen this year, as the previous year, the food retail market in Mexico is a very competitive market, and all the participants are very aggressive. During the summer, during this period in May and June, and during the summer, there is the summer campaigns that almost all the food retailers, participants in the market have very strong campaigns during that period. We have the Temporada Naranja, where orange season for us is very important. What we have seen is that every time, more and more, all the participants, or almost all the participants are very aggressive during this season, and with some campaigns that try to capture the market or try increase the sales during this. I think what we have seen is that during this year and during the last years, we have seen more interest from all the participants in the market to capture in these summer campaigns for good. That is why we need to execute the Temporada Naranja, our orange season, very well in order to provide with good products and good offers to our customers. We feel very comfortable that we are performing well and our campaign is performing very well. There is always a lot of competition, and we need to excel in order to increase our sales. What I can mention is that this difference in same-store sales growth versus the rest of the market is not something of this quarter. It is something that since the beginning of La Comer, we have been growing above the market. This is because of our differentiation strategy. When every time more customers that try one of our stores are happy with the store, happy with the product, with the service, we think that we are capturing more customers every time. This is because of the differentiation strategy that we have. For us, it is very important to provide better service, better product, more differentiated product, better assortment of products than the rest of the market in order to provide to the customers a different experience. That has helped us to grow in same-store sales above the market, above the other participants. That is why we need to continue with this strategy. Thank you, Rogelio. Just a follow-up on the City Market Café, which by the way, I already went twice. It is very good. Thank you. Do you expect this to really move the needle on growth? What type of pace of openings can we expect, and what type of CapEx does this entail? Or is this just something, an additional value add that we shouldn't really think that this will move the needle? Yes. This is two things, a different experience, a better experience for our customers, to provide our customers with a better experience. Also, we have, at this moment, plans to start to grow in other places with this format, in which we think it will be successful. Yes, it's something that is not very relevant at this moment, but during the time, it could grow and it can contribute to the growth of the company in the future. All right. Thank you so much. Gracias, Rogelio. Thank you. Thank you. Thank you, Froylan. Our next question from Antonio. Please, Antonio, go ahead. Hi. Good morning. Thanks for taking my question. Congrats on your results. Just a quick one regarding private label. How is it performing? Any update on penetration? Maybe if there's any change in strategy. Thanks. Yes, and thank you, Antonio. Yes, in private label, we continue emphasizing the attributes of our private label, Golden Hills. Usually after orange season, after the Temporada Naranja advertising campaign, we launch a new campaign of Golden Hills with all the attributes of this brand. As we have been growing above the average of the company in perishables and prepared food that are categories that doesn't have a brand as the other part of the sales. I would say that at this moment, it's a small percentage. The private label is a small percentage of the total sales of the company, because we have a big part of the company that is coming from perishables and prepared food and other categories that doesn't have a brand as a specific brand. But in some categories, we contribute with very good It's a good proportion of the sales. Every year, we are going to continue with this campaign in order to emphasize the features and the qualities of our brand. Could you remind us, please, what's the penetration? Thanks. Yes. There are many different categories. We do not provide a specific number of that, Antonio. Okay. Understood. Thanks. Have a nice day. Thank you. Thank you, Antonio. Well, and now we have from Miguel Ulloa. Please, Miguel, go ahead. Hi, thanks for taking my question, and this one would be regarding your loyalty program. Could you provide some color on it, the progress indicators, and what are your plans on this topic? Thank you. Yes. Our loyalty program is the Monedero Naranja. We have almost 1 million customers in the Monedero Naranja, and it represents around 50% of our sales that, in some way, they provide a Monedero Naranja during the sales. We have a very good acceptance of this program, and the average ticket of the Monedero Naranja is much higher than the average ticket of our customers in general. That's why we think it's and we are going to emphasize that loyalty program, the Monedero Naranja. We are in the process of launching a new it's available in the market, a credit card with our brand, a La Comer Card, that provides very good benefits to the customers. All the benefits are in the Monedero Naranja. In some ways, we are emphasizing the benefits in this loyalty program. We expect that that loyalty program could grow even more with this new credit card that we are launching in the market. It's already available. We haven't done a special campaign promoting this credit card because we are now in Temporada Naranja, and all the advertising efforts are in the Temporada Naranja, but after that, we are going to launch the campaign for that credit card. Thank you very much. Thank you, Miguel. Thank you, Miguel. Please, Sara, go ahead and ask your question. Hi. Hello. Hola. Hi. Thank you for taking my question. Congrats for the results. A very quick question about the new store you opened at the end of the last year. Maybe if you can comment about the performing, and also if you can comment about the performance in the beginning of this third quarter, compared with the second quarter, or if something has changed in terms of formats, regions, or something. Thank you. Yes. We have very good performance in the new stores. All the three City Markets, La Comer, and Fresko, we have five new stores at the end of last year that we opened, and they are performing very well. I think something that has happened is that all of the new stores are located in places in which we have some impact in some other stores that we already had. That is something that we are having. The locations of all the five stores have some impact in our own stores in some way, but they are performing very well, and we expect that they can continue growing. Sorry, regarding, what is the second question? Sorry. The performance. It is about the third quarter. of July. July is performing well. It's very similar to the second quarter. We are having good results in growing sales, very similar to the second quarter. Thank you. You're welcome. Thank you, Sara. Well, if you please ask a question if you have any. If not, please, Rogelio Garza, proceed. Yes Go to proceeding closing remarks. Yes. Thank you everybody for your interest in the company, and if you have any additional questions, please do not doubt to reach Yolotl for any follow-up. Thank you. Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.