Grocer Offering Lesser-Known Products Experiences a 38% Surge in Revenue following a 18% Increase in Comparable Sales
BBB Foods' Rapid Growth and Strong Financial Performance
BBB Foods, a Mexican discount grocery store chain also known as Tiendas 3B, is experiencing strong growth and positive financial momentum as of mid-2025.
In the second quarter of 2025, BBB Foods reported revenue of approximately Mex$18.8 billion, representing a 38% increase compared to Q2 2024. This robust revenue growth surpassed analyst expectations by 3.3%. The company’s same-store sales also grew by 17.7% in Q2 2025, indicating strong underlying demand in established locations.
The company aggressively expanded its store footprint, opening 142 net new stores during Q2 2025, bringing the total to over 3,031 stores nationwide by June 30, 2025. This rapid expansion is a key driver of the company’s revenue growth. EBITDA, excluding non-cash share-based payment expenses, increased by 32.1% to Mex$1,096 million for the quarter, showing improved operational profitability despite continued investment in growth.
Despite revenue growth, the company posted a net loss of Mex$286.1 million in Q2 2025, contrasting with a Mex$331.3 million profit in the same quarter last year. Earnings per share (EPS) dropped to a loss of Mex$2.49 from a profit of Mex$2.95 previously. The loss reflects increased costs, possibly from rapid expansion and associated operating expenses.
Analysts maintain a positive outlook with forecasts projecting an average 20% annual revenue growth over the next three years, well above the US consumer retail industry average of 4.9%. The company is expected to reach approximately Mex$124.7 billion in revenue and Mex$1.5 billion in earnings by 2028 under current projections.
Investor confidence is strong as reflected by a share price increase of 9.3% in the week following Q2 earnings and a notable 12.62% pre-market surge in July 2025 on optimism about the value-focused business model and growth trajectory.
BBB Foods operates a chain of discount grocery stores under the Tiendas 3B brand, which is expanding rapidly in Mexico. The stores stock a large variety of products at rock-bottom prices, attracting a high volume of customers and ensuring scalability. Despite operating in a low-margin industry, BBB Foods' operating costs are only 10.5% of the revenue in its latest quarter.
The company went public last year with little fanfare and hit the U.S. exchange as the first Mexican company in six years. However, the growth, market share gains, and upside of BBB Foods are becoming apparent. The company's strategic focus on aggressive store openings and affordable grocery offerings underpins optimism about its medium-term financial performance and market position in Mexico.
However, it's important to note that the company's working capital remains negative due to the expansion, and margins narrowed slightly due to a boost in logistics overhead related to four new regions. Additionally, BBB Foods is not based in a typical hotbed for investors. Comparing Tiendas 3B stores to bodegas is misleading, as customers at BBB Foods do not pay a premium for convenience. Tiendas 3B stores are small, resembling large convenience stores, with as few as three employees at a time.
In conclusion, BBB Foods shows rapid expansion, strong revenue growth, and improving EBITDA margins but is currently balancing this with a net loss largely due to growth-related expenses. Despite these challenges, the firm’s strategic focus on aggressive store openings and affordable grocery offerings underpins optimism about its medium-term financial performance and market position in Mexico.
- Due to strong revenue growth and improved operational profitability, investors are eagerly watching the financial future of BBB Foods, even though the company incurred a net loss in Q2 2025 due to expansion costs.
- As BBB Foods continues to open new stores and offer competitive prices, venture capitalists in the finance sector might be considering investing in the company's future, seeking to capitalize on the anticipated growth prospects in the sports and weather-resistant Mexican market.
