Gruma (GRUMA) Q1 2025 earnings summary

Executive summary

• Delivered resilient Q1 2025 results with 4% EBITDA growth and 13% net earnings increase, despite global economic uncertainty, U.S. consumer selectivity, and weaker sentiment.

• Global leader in corn flour and tortilla production with $6.4B in sales and 75 plants worldwide as of March 31, 2025.

• Strong brand awareness and top market positions across the US, Mexico, and Europe, with a focus on health-oriented and value-added products driving double-digit sales growth.

• Geographical diversification and a defensive business model supported stability amid global trade concerns and market volatility.

• "Better for You" product lines and retail expansion in the U.S. and Europe offset challenges in Mexico and Asia.

Financial highlights

• Q1 2025 consolidated volume was 1.06 million metric tons, a 1.3% year-over-year decline; net sales declined 6% to $1.5 billion, mainly due to peso depreciation and lower U.S. food service volumes.

• EBITDA grew 4% to $276 million (8% growth excluding FX), with EBITDA margin up 180 bps to 17.8%; net earnings up 13% to $126 million.

• LTM net sales reached $6.58B with an 8% CAGR since 2021; LTM EBITDA was $1.14B, reflecting an 11% CAGR.

• U.S. division: Q1 2025 sales down 3% to $879.7 million, EBITDA up 6% to $193.4 million, with a 22% margin; "Better for You" line grew ~15% year-over-year.

• Europe: Q1 2025 sales up 7% to $114.8 million, EBITDA up 20% to $11.4 million, driven by retail tortilla expansion.

Outlook and guidance

• Confident in delivering annual and sequential growth in retail channels, with unchanged guidance and potential for 20-40 bps margin expansion.

• Long-term expectations: low single-digit volume growth, mid-single-digit revenue growth, high single-digit EBITDA growth.

• U.S. margin improvement expected through higher-margin SKUs, plant efficiencies, and proprietary technology.

• No immediate plans to adjust pricing in Mexico; hedging decisions for 2026 deferred until after the November harvest.

• Additional capacity planned in Central America to meet strong demand.