Genomma Lab Internacional (LABB) Q1 2026 earnings summary

Executive summary

• Growth initiatives are underway, focusing on distribution expansion, in-store execution, and increased media investment, leading to early signs of market share recovery in Mexico despite a tough consumption environment.

• Like-for-like sales declined 3.9% year-over-year, mainly due to weak consumption in Mexico and disruptions in the US Hispanic retail market, partially offset by 5.3% growth in LATAM.

• Net sales declined 4.9% year-over-year to MXN 4.2 billion, mainly due to a 13.9%-14% appreciation of the Mexican peso.

• Gross margin expanded 61 basis points to 63.4%, driven by productivity gains and initiatives.

• EBITDA margin declined 96 basis points to 22.8% due to increased investment in growth initiatives and higher OpEx.

Financial highlights

• Net sales: MXN 4,190.6 million, down 4.9% year-over-year.

• Gross profit: MXN 2,657.6 million, up to 63.4% of sales.

• EBITDA: MXN 956.4 million, margin of 22.8%, down 8.7% year-over-year.

• Net income was stable at MXN 494.6 million, with net margin up 49 basis points to 11.8%.

• Free cash flow (TTM) was MXN 1,964.5 million, down 31.6% year-over-year.

Outlook and guidance

• Recovery in Mexico is now expected to begin in Q3 or Q4 2026, later than previously anticipated.

• Short-term EBITDA margin pressure is expected through Q2 and Q3 due to increased promotional activity and investment to defend market share.

• Management expects to return to 23%-24% EBITDA margin by late 2026 or early 2027.

• E-commerce is projected to grow 30% in 2026, reaching 7%-8% of consolidated sales.

• Growth initiatives are expected to improve operating leverage in the second half of 2026.