Good morning, everyone. My name is Leonard and I will be your conference upgrade. Welcome to Tiendas 3B Second Quarter 2025 Conference Call. [Operator Instructions]. Also, please note that this call is for investors and analysts only. Questions from the media will not be taken nor should the call be reported on. Any forward-looking statements made during this conference call are based on information that is currently available to us. Today, we are joined by Tiendas 3B's Chairman and Chief Executive Officer; Anthony Hatoum; and Chief Financial Officer, Eduardo Pizzuto. I will now turn the call over to Anthony. Please go ahead.

Good morning, everyone, and thank you for joining Tiendas 3B's Second Quarter 2025 Earnings Call. I will begin with a review of our operating results for the quarter. And will be followed by our CFO, Eduardo Pizzuto, who will provide an overview of our financial performance. We will conclude with a Q&A session to answer any questions you may have. We continue to add breadth and depth to our management team. Today, I would like to take the opportunity to welcome to the team to new members. Amparo Martinez, who joins us as General Counsel; and Joaquín Ley who will head Investor Relations. Welcome. We delivered another quarter of exceptional growth, far outperforming other listed grocery retailers in Mexico due to our unrivaled value proposition. In Q2, we opened 142 net new stores for a total of 3,031 stores. Our store opening rate is accelerating. Together with this acceleration of store openings, we have invested in 4 new regions that we will open in the second half of this year. That means for new distribution centers, logistics and all the personnel required to run it and its operations. Same Store sales grew by 17.7% versus 10.7% in the second quarter of last year. Total revenues increased by 38.3% to reach MXN 18.8 billion. EBITDA increased by 22.5% to reach MXN 844 million. If we exclude our share-based payment expense, which is noncash, then our EBITDA would have increased by 32%. During this first semester, cash flow generated by operating activities reached MXN 1.9 billion or a 56% increase versus 2024. We ended with a net local cash position of approximately MXN 1.1 billion, and we have a $150 million cash position, mostly from funds we raised at the IPO. Let's turn to operational performance. We are increasing the number and the rate of store openings. In the first 6 months of this year, we opened 259 stores compared to the 215 stores we opened in the first half of the previous year. If we look at this on a 12-month basis, we opened 528 stores versus 460 stores in the previous 12 months. Our revenue growth remains rapid. We continue to be one of the fastest-growing retailers in Mexico and possibly globally. Total revenues reached MXN 18.8 billion, an increase of 38% year-over-year, with very strong Same Store sales growth rates of 17.7%. And Same Store sales growth continues to be driven, by continuous improvements in our value proposition to our customers. And we are seeing an increasing number of tickets as well as an increasing number of items per ticket. When compared to ANTAD, we appear to be increasing the gap in the growth rate of Same Store sales. We see in the second quarter a larger gap of 15 percentage points. I will now pass the mic to Eduardo.

Thank you, Anthony. Good morning, everyone. Sales expenses as a percentage of revenue slightly increased from 10.4% to 10.5%. This increase had 2 main drivers. Due to our accelerated rate of store openings, we see higher store personnel and D&A expenses. This is normal. 45% of our total store base was opened during the last 3 years. As North store vintages mature, sales expenses naturally decrease as a percentage of revenue. This is what happened with our older vintages. Moving on to admin expenses. Admin expenses as a percentage of revenue increased by 31 basis points from 3.6% to 3.9%. This includes recognizing an incremental MXN 111 million in non-cash share-based payment expenses. To recap our share-based compensation plans, it consists of a legacy plan of 20 years that terminated at IPO and a new standard plan that started at IPO. In addition, this June, our Board granted a share-based awards tied to our IPO. This award announced in our IPO and follow- on documentation does not change our fully diluted share count. It was already factored in. It just results now in an accounting recognition of a non-cash expenses upon granting. For those investors who prefer to look at this non-cash expense, we have made it easy to review by providing a breakdown in the appendix of our earnings release. We encourage you to read it. Moving on to EBITDA. EBITDA reached MXN 844 million, a 22.5% increase year-over-year. EBITDA margin was 4.5%, down 58 basis points. The margin impact mainly comes from higher logistics costs, associated with our opening of 4 new regions in the second half of this year. Non-cash share-based payment expenses and the acceleration of our store opening rate. If we exclude noncash share- based payments, then the EBITDA margin would have been 5.8%, down 27 basis points and our EBITDA would have increased 32% year-over-year. I would like to anticipate the very normal question about operating leverage. It is real, but hard to see when viewed on a consolidated basis, that, given the increasing rate of store openings. When we look at it on a store vintage basis, we see it clearly. And therefore, we're confident that when our store opening rates flatten, it will become very evident. However, we chose to go for the higher growth rates, and this is what is going to maximize shareholder value creation. Finally, on working capital. Our business is a business model that generates significant negative working capital. And in turn, we generate significant cash flow from the changes in negative working cap. We can see, for example, that in June '24, we had MXN 5 billion compared to a negative working capital of MXN 7 billion in the second quarter of '25, excluding IPO proceeds. We are roughly at 10.5% and of total revenue LTM, excluding IPO proceeds. Our accelerated growth continues to be self-funded. I will now turn the call back to Anthony for final remarks.

We are exceeding our targets. We are accelerating the rate of store openings. This, along with related investments affects our consolidated margin. But across the board and especially at the vintage level, we continue to see the benefits of scale and operating leverage. Sales and Same Store sales are booming, reflecting our unrivaled value proposition. And we are funding all this growth and investment internally from increasing cash flows. We continue to invest to sustain accelerating growth because by doing so, we are creating additional shareholder value, and we are increasing our lead versus the rest of the market. Ours is a winning business model, we will keep on executing, and we will continue to do it just faster and better. We will now move to start the Q&A session. Please go ahead, operator.

[Operator Instructions]. Our first question comes from the line of Bob Ford. Please state your company name and ask your question.

Bob Ford, Bank of America Merrill Lynch. Anthony, Eduardo congratulations on the quarter. What do you attribute the acceleration in Same Store sales, too? And how should we think about ticket traffic, items per basket trends in the quarter, the inflation rates in your assortments and maybe the momentum as you come out of the shift of Easter into July and early August.

Bob, many parts of your question, so I'll try to segregate it. I think fundamentally, it's an amazing value proposition that we keep on improving in everything we offer our customers. And that has not changed at all. Since inception. We continue to improve on our products, whether it's quality or price or packaging or the assortment, and fundamentally, that's what's driving more traffic into our stores and for existing customers enticing them to pick up 1 more item. And in terms of where is that Same Store sales coming from a more numerical point of view. We're seeing a notable increase in number of tickets. We are seeing a real increase in the ticket size. And when we look at it in more detail, part of it is a number of items that you pick up. And also the mix has changed and made the ticket a little bit bigger. And of course, we always look at inflation. But in our case, it's a minimal part of the ticket increase. In fact, I might even say that internally, we have deflation of prices. Did I cover all parts of the question?

No, I think you did. And I was just curious, if you look at the your meat and produce pilots. I think you're creating a lot of excitement. How are those developing? And to what extent just scaling that having an impact, if at all? And how should we think about it moving forward?

Look, we're cautiously optimistic, and we're fairly conservative when we look at it. And keep in mind that this is still at a test level. So by no means is it impacting sales -- the sales numbers that you see today. And even I believe if we never introduced fresh fruits, vegetables and meats in the future, you would still see significant and notable Same Store sales growth. Having said that, there's absolutely no doubt that when you do introduce a new categories such as meat or vegetables, you are going to see automatically an increase in the ticket. Coming back to the test results, I would be, I would say, cautiously optimistic. Again, we're very conservative when it comes to rolling out a new category. We wanted not only to work on the top line, but to make sure that everything behind is working perfectly that our logistics are efficient, that our sourcing is efficient, that we can scale with our problems. Keep in mind that this is a company that's been growing now for many years at 30% plus with no hiccups. And I think part of that is due to the fact that we're cautious and optimistic in how we do things, and we'd like to make sure that things are running well before we scale them up.

Our next question comes from the line of Andrew Ruben.

Andrew Ruben at Morgan Stanley. You mentioned the 4 new regional openings. It's pretty sizable. So I'm curious about some of the opening and ramp-up expenses. You mentioned logistics, but when we think about maybe the marketing to build the brand, the hiring -- is there anything different in terms of the intensity for new regions versus existing stores or kind of your existing regions? And then when we think about the ramp-up period, should we consider kind of similar or longer? Just really any implications given that you have the 4 planned for the back half?

Let me take the first part of this question, and then I'll let Eduardo comment on ramp-ups and costs. I think there is absolutely no change in how we've been doing things since inception. We stretch, we don't leap. And therefore, when we do open a new region, and as you know, our region is a distribution center together with all associated stores and all the functional areas to support these stores running as an autonomous mini company, if you want to think of it that way. We tend to open that new region next to an existing region. So by doing that, we have mitigated any risk of branding and name recognition on the contrary when we do open it. People already know who we are. And we shorten the ramp-up of this new region. It's not starting from scratch. It inherits a number of stores from existing regions. And typically, the stores that get transferred are closer to the new region, so you get another benefit, which is more efficient logistics. You've compacted the distances. Of course, this region doesn't open with all the stores that can run and typically a region can run up to 150 stores, but say it opens with 40 to 60 stores. And then as it adds stores, then it becomes efficient. So basically, we're talking about going from this 40, 60 stores at start to what we call a cruising speed at 150 stores, where we think we've reached an optimal point in terms of running a region. I don't think we've seen any change in the time of ramp-up, and I don't think that we've seen any change in how we operate it. So it's all been very smooth. It just happens that this year, the 4 new regions are more lumped together in terms of when we open them, and that happens to be in the second half of this year. Eduardo, do you want to add something to this?

Yes. I would just add that Andrew, for reference, yes, the additional expenses on this, it's mainly on additional personnel transportation and training for all these people that are going to be managing this 4 new regions. But then in terms of the ramp-up, really, no major changes from what you've seen in the past. The only thing that I would add is that adding more regions for us, it's a great thing because at the end, we become much more efficient. As Anthony mentioned, we compacted distances between the DC and the stores. And in addition to that, we also gained 1 more new real estate team, which positions us better for our continuous expansion. So all in all, good things for the rest of the year in terms of these 4 new regions.

Our next question comes from the line of Joseph Giordano.

I want to explore on 2 things. So first, on the top line, I mean, I'd like to understand a little bit like the evolution of the private label here. So you mentioned you have like larger baskets, so more items. So to understand here how the penetration of private label is evolving into this first half of the year and if the value proposition is really like making a big difference here when it comes to Same Store acceleration versus the market? The second question is more technical one is concerning leases. So if we look at the total, this is not just the rental as it was a little bit higher than what we saw last quarter. So I'd like to understand a little bit like how the refrigeration equipment and potentially like those new lease effect in that? And what could be the recurring level? Because we understand that maybe you have some higher upfront lease payments when we have those new contracts coming.

Thanks, Joe. In terms of private label development, it's been -- this is our bread and butter. We are continuously improving the portfolio of private labels and all the other products that we sell, and it's a dynamic process. What you've seen between, let's say, 2023 and 2024 was a major increase in private label penetration. And I wouldn't be surprised that this trend continues in 2025. We will typically give you the number in Q4 of this year as to where -- what we reached in terms of PL penetration. But no doubt, it's a main driver of net increase in Same Store sales because fundamentally, what you're doing is you're just giving more for your money and an improving private label. It's as simple as that really. Eduardo, do you want to give some color on leases?

Yes. Joe, you broke up a little bit. Can you repeat that your second question, please?

Yes, yes. When we look at like the total lease expenses like interest and lease payments, the level was much higher than everyone was expecting this quarter. So I would attribute that to refrigeration, that since you have the 4 new leases, but I would like to understand like you have like any kind of upfront payments to understand like where this expense should stabilize going forward?

Okay. Thank you. Yes, it did went up a little bit. It has to do with actually more leases coming from growth of stores, equipment at the stores and also the future new regions, which is we're equipping them with cold rooms and frozen rooms as well. So it's the combination of that makes that increase in leases, Joe.

Is there any kind of upfront payment, Eduardo here, like to understand like to select the new level?

No, not from payments.

Our next question comes from the line of Alvaro Garcia. Álvaro García: Alvaro Garcia from Pactual. A couple of questions, 2 questions. One on the equity incentive plan, the 2024 equity incentive plan. We saw that in 2Q '25, you've increased the number of both RSUs and options related to the 2024 plan. And I was wondering if that was performance specific or what drove that increase into 2Q? And maybe if you have some sort of -- I know it's difficult to give guidance, but what a full year '24 number might look like? And then I'll ask my second question afterwards.

Yes. We typically would prefer to leave all of this until the end of the year, but sometimes, there are events like hiring key personnel that require you to give options or RSU midstream. I wouldn't think that this is -- this would be more the exception than the rule. And in terms of guidance for the year, all I can say is that we're well within market parameters for what you would expect a high-growth company to be distributing for a total year in terms of awards that are equity linked. Álvaro García: And then my second question is on sales. My sense sort of speaking to people on the ground is that across income cohorts, the brand is really resonating with the higher income segments. And I was wondering if you're seeing some of that in the data. I know -- I mean, you've discussed the higher ticket and the drivers behind that ticket, but I was wondering if there was a comment to be had on the higher income cohorts driving performance at Tiendas 3B at the moment. Maybe a comment on [Gamma] outperforming other private label. That's my question.

Yes and no. And let me say that, that the stores that we have as a percentage of total stores that are in neighborhoods with higher economic power remain relatively a smaller segment of our total stores. But there is no doubt that the higher the purchasing power the more you can buy, and therefore, you see typically a little bit higher ticket sizes, more frequency of purchase. And at the end of the day, we've seen it also. You see it at BIM where BIM is present today in all sorts of neighborhoods. So anybody who's looking for value for money irrespective of socioeconomic starts is going to be attracted to our store. And our criteria for opening stores does not -- there's no limit. I mean, as long as we have clients, and we think that we will find a client, we will open a store. And yes, it's been quite successful in all social economic levels in which we've operated.

Our next question comes from the line of Alejandro Fuchs.

Alejandro Fuchs from Itau BBA. Congratulations on the results. I have 2 very brief ones, if I may. The first one is in terms of competition, right? You guys have been outperforming the market quite consistently. I wanted to see if you see anything different in terms of competitors reacting to this, let's say, or you expect anything different for the next second half of the year? That will be the first one. And then the second one on the new regions that you're entering, I wanted to understand if this is north or south of Mexico. And if you expect competitive dynamics and performance of the stores to be similar to the ones that you already have maybe more towards the center of the country.

In terms of competition, we have seen no real change in the environment. The market in Mexico has always been highly competitive, and that's a good thing. And it's good for the consumer at the end of the day that it pushes us to always try to offer them more for their money. But at a granular level, I see no change in the dynamics of the environment or the competitive level that we've seen in the last 2 quarters. It seems to be more of the same. In terms of seeing a change as we enter new geographical areas where we expand from where we are outwards because remember, we're always expanding by stretching as opposed to jumping to a new area where we have 0 presence Again, it's been very consistent in terms of buying habits. And fundamentally, when we think about it in more detail, we are selling basic goods things that everybody pretty much consumes irrespective of geography and almost irrespective of socioeconomic level. And the ramp-ups of our stores, our client behaviors, our client reactions have all been very consistent. I would say at an extreme possibly when one day we reach the U.S. border, we might see some changes in purchasing behavior just because tastes will probably change as we get closer to the U.S. But for the foreseeable future, it remains stable and predictable.

Our next question comes from the line of Irma Sgarz.

I just wanted to touch upon the gross margin pressure, which I think was largely expected given the branching out into new regions, but I was wondering if you could just help us think through a little bit of how we should think about the ramp-up or the dilution into the back half of those expenses that you've layered in anticipation of this build out this quarter, if it's correct to think that we should relatively swiftly, as you laid out, as you grow the store base at the rate that you're growing, I should think that relatively quickly you grow into those new expenses that you've layered on? And the second question I had, if I may, is if you could just comment a little bit about the mature stores, Same Store sales growth, sort of what you're observing there in terms of sort of just magnitude because it's obviously a little bit hard to parse that out from your Same Store sales, which obviously still is also seeing the benefits of stores that continue to ramp up the mature ratio curve.

Irma, let me start with your last question, which is Same Store sales growth. Well, there is no doubt that given that we have a large number of new stores when you think about it. In the last 3 years, we opened more than 40% of our stores that, that would sort of bias the Same Store sales numbers upwards. But I can also tell everybody that even when we look at our oldest vintages, stores that are 20 years old, they're still growing extremely healthy, much better than inflation. Posting a very solid Same Store sales growth. And fundamentally, what drives that again is that the portfolio of products that we sell across all our stores has been continuously improving. And so in that very old store, the customer that comes in today sees something that is significantly better than what they used to see 5 years ago. And that drives in more purchase from that client and possibly even more clients that we were not reaching before. On the matter of margin, right? I can say that our commercial margin is very healthy. And that as Eduardo had mentioned, the -- the decrease in margin that we're seeing is driven by the acceleration in store openings and the expenses that it generates. And of course, you have to pay upfront for all these expenses before you see the sales materialize. And as you said correctly, eventually, you achieve these sales and this expense gets diluted. But here's the perverse thing. The faster we accelerate the more we have these expenses, even though we're creating tremendous value for the shareholder. And at the end of the day, we've chosen to go that route. We'll try to accelerate our growth rates and create tremendous value for the shareholder. Even though optically on a consolidated basis, you're going to see a margin that is possibly not growing as fast as you want. But I think it's very worthwhile because at the end of the day, what's important is for us to create more value and also to put more distance between us and the rest of the market.

That's very helpful. May I just follow-up. If I do the math sort of the stores that are in year 4, 5 of your entire store base, so much closer to, I guess, sort of the mature margin, if I may say. So that percentage is actually up a little bit year-over-year just you're obviously accelerating at the margin, but it's also a much larger store base and there's like past cohorts continuing to mature. So I was just wondering if why that wouldn't already sort of drive some benefits in terms of dilution of the selling expenses at least I understand that G&A also is seeing some upgrades that you're making to internal structures, and that's well understood already from last quarters, but on selling, I was just a little bit curious about that.

Yes. I wouldn't see much into that more than the fact is that when you do accelerate, you're going to get that expense upfront. Take the extreme case, of course, if we reduce our store opening rate to 0, you will immediately see a pop in margin and EBITDA. But of course, we're not going to do that. We're going to continue to try and open as many stores as many healthy stores as we can because that -- every store we open that is successful is value accretive. But I don't know, Eduardo, if you want to add some more color to this exactly as to where 4-, 5-year cohorts are doing versus how much they represent of the total number of stores.

Irma, are you there?

Yes, I'm here.

Sorry, we lost you for a second. Yes.

I think you can take it up.

No problem Irma. We will follow up. Eduardo, we're not hearing your mic. Operator, please go ahead with the next question.

Our next question comes from the line of Héctor Maya.

Hector we are not hearing at least, I'm not. Héctor Manuel Maya López: Can you hear me now?

Yes, yes. I can.

Yes, we can.

Anthony, Eduardo, always a pleasure and congrats on the results. Just wondering if you see that the Same Store sales performance could be sustainable at this level during the second half of 2025? Or if you are having any signs of moderation, anything that concerns you? And also, even with the further opening acceleration and level of acceptance that you are seeing from consumers, still, I believe that there are lots of people that maybe are not yet familiar with the industry as with. So just wanted to understand, is there any point in the future in which you would be open to allocate a budget for marketing to create more awareness for the brand?

Hector, you're asking extremely tough questions, hard. Same Store, let's start with Same Store sales expectations going forward in I'm not going to answer this directly, but I'm going to tell you that we don't see anything right now that would say that this would flatten out or decrease, but at the same time, I can't tell you if it's going to be 17% next quarter over 16% or 15%, but let me just say that it's been consistently healthy and I do expect it to continue to be healthy for the next quarter. In terms of spending on marketing, again, a very tough call. I think our best marketing has been word of mouth. And even when you think about it, we have great marketing coming from social media, which is not generated by us. It's just another way, a modern way of doing word of mouth. And I think that, that has driven a lot of new customers to our stores. In terms of formally spending on marketing, we've done so in the past in many tests and we don't exclude it from the future. But what we found to be extremely challenging is to link this marketing dollar spent to the increase in sales. We're getting the increase in sales, but we cannot tell you that it was the marketing dollar. And fundamentally, I believe that -- it's the value proposition improvement by itself that drives the vast majority of the increase. And that, of course, in turn generates the word of mouth, and that in turns creates that virtuous circle of increasing Same Store sales. But bottom line, we don't exclude it, but it has its challenges.

Our next question comes from the line of Ulises Argote.

Ulises Argote from Santander. A couple of questions from my side. So the first one on the supply chain side of the equation. As you continue to expand here further through the country and at this faster pace, are your private label suppliers mostly keeping up with this expansion? Or are you bringing new suppliers on Board? Just trying to get a sense of how things are evolving in this site. And the second one, I think it's kind of a bit obvious, but is there space to revise the store opening guidance you provided at the start of the year given the current run rate of store openings.

Ulises, I'll start with the last one. We're not revising our guidance. We usually don't. But I think we'll just -- we're confident that whatever we give us guidance is going to be met. In terms of your question about supply chain, again, it's as we improve our suppliers also need to improve. And I think in the past, I've talked about how we do it, everything is long-term planned. So we can predict with a fair degree of accuracy how many stores we're going to have in the future and the volumes of products we would need to have to meet demand. And as such, we start working on ensuring that we have that supply and the quality and the price that we want way ahead of time. Think about a 3-year lead time to ensure that you have everything ready. And by doing so, you mitigate a lot of the risk and you can ensure that your growth, even though it's very high growth rates is smooth and continuous. And again, by thinking ahead, you mitigate a significant amount of risks, not only on the supply chain, but in human resources and technology and anything you can think of.

Our next question comes from the line of [ Andres Ortiz ].

Andres Ortiz from BT Pactual Asset Management. I would like to ask about compensation once 2024 equity incentive plan ends [further] release, you expect that the non-cash expenses finished by 2028. But how should we think about management compensation once start this plan ends? Should we expect additional equity incentive plans going forward or higher wages, just to get that sense.

Andres, I'm going to answer the question on a conceptual level, and then I'll let Eduardo talk about the expenses. Since inception, we've always believed that equity-linked compensation is key to attracting the right profile that we want and motivating and aligning anybody who works at 3B with the interest of shareholders. And I can say unequivocally that our success today is in large part because we've attracted the right profile of somebody with a can-do attitude that is working towards creating value. And I think we'll continue to do so looking forward. Our new equity-linked compensation plan, the 2024 plan is one that goes forward. It doesn't -- I sort of understood from you that might end, no, it doesn't. It's -- these are yearly allocations of equity that we give out that the Board approves and gives out to people in 3B, who have demonstrated leadership. And also, as I mentioned before, to attract and retain people who we think are the right profile for a high-growth company like ours. And I would say that our Board is also very conscious about this matter of how much equity linked compensation to give out and does it within market parameters going forward. And so that -- the benefits -- if you ask me personally, I'd say the benefits of equity-linked compensation outweigh the equivalent benefit of just giving out cash compensation. Thank you, operator, and thank you all for participating and for your interest in our company, much appreciated next time. And please

The only thing that I would add, Andreas, is that and Anthony briefly touched on it and just clarifying that table that we disclosed table. But just for everybody to have clarity on what will happen with this non-cash expenses, that's what we laid out this table.

We will now pause for further questions.

Well, thank you -- sorry, go ahead, operator.

We have not received any further questions. I would like to hand the call back over to Anthony for his closing remarks.

don't hesitate if you have any questions to reach out to myself, Eduardo, Martin now, who is part of our Investor Relations team.

That concludes today's call. You may now disconnect.