Chedraui (CHDRAUI) Q1 2025 earnings summary

Executive summary

• Consolidated sales grew 14.8% year-over-year to MXN 74,441 million, with double-digit growth in both Mexico and the U.S., supported by favorable currency effects.

• Same-store sales in Mexico increased 1.2%, outperforming ANTAD for the 19th consecutive quarter, despite a negative Easter calendar shift and weaker consumption in the southern region.

• Chedraui USA posted a 2.8% increase in same-store sales in dollar terms, with Smart & Final returning to positive growth.

• The transition to the new Rancho Cucamonga Distribution Center (RCDC) in California is nearly complete, expected to be fully operational in Q2 2025, supporting long-term growth.

• Opened 15 new stores in Mexico during the quarter, continuing organic growth.

Financial highlights

• Consolidated EBITDA rose 8.8% to MXN 6,256 million (8.4% margin), and 12.8% to MXN 6,481 million (8.7% margin) excluding RCDC transition costs.

• Net income reached MXN 1,567 million (2.1% of sales); excluding RCDC transition costs, net income was MXN 1,729 million (2.3% of sales), but declined 20.9% year-over-year due to transition costs and higher financial expenses.

• Gross profit increased 15.4% to MXN 17,436 million (23.4% of sales), or 16.8% (23.7% of sales) without transition costs.

• Financial expenses rose 36.8% to MXN 1,458 million, mainly due to higher interest expense and lower interest income.

• Net debt closed at MXN 640 million, with financial leverage at 0.03x.

Outlook and guidance

• Guidance is expected to be met for the year, with the first quarter seen as the most challenging; EBITDA margin exceeded expectations.

• U.S. operations are tracking at the higher end of guidance, with positive trends in Smart & Final and expectations for continued improvement.

• RCDC transition in California expected to complete in Q2 2025, with further reduction in transition costs and realization of operational efficiencies.

• Continued focus on organic growth, e-commerce expansion, and loyalty program penetration in Mexico.

• ESG materiality study updated; climate risk assessment integration planned for 2025.