Chedraui (CHDRAUI) Q2 2025 earnings summary

Executive summary

• Consolidated sales grew 9.5% year-over-year, driven by strong performance in both Mexico and the U.S., with Mexico outperforming the ANTAD benchmark for the twentieth consecutive quarter and continued market share gains.

• Focused on three strategic pillars: lowest prices, tailored product assortment, and unique customer experience, supporting long-term value creation.

• Completed transition of five legacy U.S. distribution centers to the new Rancho Cucamonga Distribution Center (RCDC), expected to drive future productivity.

• Opened 30 new stores in Mexico and one in the U.S. during the quarter, accelerating organic growth.

• Chedraui USA saw a 1% increase in customer traffic, with Smart & Final up 1.5% due to pricing and marketing strategies.

Financial highlights

• Consolidated EBITDA grew 6.3% to MXN 6,552 million (8.9% margin); excluding RCDC transition costs, EBITDA rose 8% with a 9% margin.

• Net income increased 2.4% to MXN 2,062 million (2.8% of sales); excluding RCDC costs, net income was MXN 2,135 million (2.9% of sales).

• Gross profit increased 10.1% to MXN 17,834 million, with gross margin up to 24.1% (24.3% excluding transition costs).

• Net cash position of MXN 1,128 million at quarter-end; net cash to EBITDA ratio improved to -0.05x.

• EPS for the quarter was MXN 2.08, up 2.9% year-over-year.

Outlook and guidance

• Expect to maintain or improve EBITDA margin expansion in Mexico through efficient inventory and promotional management, despite higher labor costs.

• Guidance for the year reiterated across all lines, with potential for slightly better EBITDA margin than initially projected.

• U.S. banners expected to benefit from supply chain efficiencies and margin recovery as RCDC integration matures.

• Transition costs from the new RCDC are expected to decrease following the completed migration.

• Continued focus on organic growth, e-commerce expansion, and productivity improvements at the new U.S. distribution center.