Genomma Lab Internacional (LABB) Q4 2025 earnings summary

Executive summary

• 2025 saw a significant deceleration in Mexican consumption and internal execution gaps, leading to a deliberate reduction in sell-in to normalize retailer inventories; like-for-like sales declined 4.3% year-over-year, with Q4 like-for-like sales down 12.9%.

• Despite the downturn, underlying consumer demand remained resilient, with Q4 Mexico sell-out down only 2.2%.

• Productivity savings of over MXN 1 billion were unlocked and reinvested in growth initiatives such as product innovation and distribution expansion.

• EBITDA margin for 2025 was 23.4%, up 43 basis points, reflecting strong cost containment and operational resilience.

• Management expects early 2026 to show higher OPEX and softer sales, with growth initiatives gaining traction in the second half and a disciplined reset for sustainable growth.

Financial highlights

• Consolidated net sales for 2025 were MXN 17,541.2 million, down 5.7% year-over-year; Q4 net sales were MXN 4,017.0 million, down 13.9%.

• Gross profit margin was 62.8% for 2025, down from 64.1% in 2024.

• Full year EBITDA was MXN 4,100.9 million (23.4% margin), down 4.0% year-over-year; Q4 EBITDA was MXN 886.6 million (22.1% margin), down 16.5%.

• Full year net income was MXN 1,607.4 million, down 23.1% year-over-year, mainly due to non-cash Forex losses from Argentine peso depreciation.

• Free cash flow reached MXN 1,507 million, down 45.5% due to higher CapEx, lower net income, and higher tax payments.

Outlook and guidance

• 2026 guidance: EBITDA margin expected at 23%-23.5%, with a return to 24% in 2027 as operating leverage improves.

• Q1 2026 expected to be flat or low single-digit growth as inventory normalization completes; gradual top-line recovery anticipated from Q2 onward.

• CapEx for 2026 projected at MXN 250–270 million, mainly for maintenance and innovation.

• Cash flow in 2026 expected to improve due to lower CapEx and normalized tax payments.

• Growth initiatives include product innovation, distribution expansion, enhanced in-store execution, and stronger communication.