BBB Foods Inc. (TBBB) Q3 2026 earnings review
Tiendas 3B sales jump 40%, but stock grants dilute shareholders
BBB Foods Inc., the operator of Tiendas 3B discount grocery stores across Mexico, grew faster at existing shops while opening new ones at a record clip. Revenue rose 40% as sales at stores open at least a year climbed 21% and the store count expanded 19% to 3,765 locations. Profit before interest, taxes and depreciation, excluding non-cash stock pay, jumped 61% as supplier credit funded four new warehouses and 141 new stores.
| Same-store sales growth | +20.5% +17.9% a year ago |
|---|---|
| Total revenue | Ps. 28,445M +40.3% from a year ago |
| EBITDA excluding stock pay | Ps. 1,877M 6.6% margin, +0.8 points from a year ago |
| FY26 stock pay outlook | Cut Ps. 3M Ps. 2,376M for 2026; falls to Ps. 879M in 2027 |
⚖️ Verdict: 🟢 Bullish
The story got better because the grocer proved it can open warehouses and stores at peak speed while expanding profit margins against its toughest sales comparison of the year. Scheduled drops in executive stock compensation also turned reported net profit positive at Ps. 23 million. One caution: those stock plans still expanded the diluted share count to 30% above basic shares and left taxes taking over 90% of pre-tax profit.
The question now is whether Tiendas 3B will keep letting scale gains lift profit margins or pass them back into lower shelf prices, as chief executive K. Anthony Hatoum says the company prefers. If it holds prices down, same-store sales stay near 20% while margins flatten; if it keeps the savings, profit grows faster than sales. Fourth-quarter gross margin and any 2027 annual targets will tell.
🐂 Bull Case
Existing Stores Accelerated Through Tough Comparisons
Tiendas 3B runs small, no-frills grocery stores across Mexico that sell a limited range of everyday items and store brands. Chief executive K. Anthony Hatoum said "growing Tiendas 3B brand equity, and increasing customer trust drove robust same-store sales (SSS) growth of 20.5%." Same-store sales measure revenue at shops open for at least a year.
- Total revenue: Ps. 28,445 million, up 40.3% from a year ago
- Same-store sales: up 20.5%, accelerating from 17.9% a year ago and 20.0% last quarter
- Store network: 3,765 stores, up 19.1% after adding 141 stores in the quarter and 603 over the past year
That 20.5% pace matters because the grocer faced its toughest comparison of the year, lapping 17.9% growth in the third quarter of 2025. Instead of slowing down, older shops grew even faster while the company opened 603 stores over the past twelve months, proving that new locations are not taking shoppers away from existing ones.
What to watch: fourth-quarter same-store sales against the 16.6% comparison from late 2025. Holding growth near 20% would show that older stores can keep compounding even as the store base expands by nearly a fifth each year.
Store and Logistics Leverage Lifted Margins
Opening warehouses and hiring staff can weigh on profit margins when a retailer expands into new regions. Hatoum noted that "we do not manage our business to achieve a specific EBITDA margin target", preferring to reinvest scale savings into lower shelf prices. EBITDA is profit before interest, taxes, depreciation and amortization.
- EBITDA margin excluding stock compensation: 6.6% of revenue, up 0.8 percentage points from a year ago
- Gross margin (profit left after paying for goods): 16.7%, up 0.5 percentage points
- Store operating expenses: 9.8% of revenue, down 0.4 percentage points
- Headquarters expenses excluding stock compensation: 2.6% of revenue, down 0.1 percentage points
Every cost line improved as a share of sales even though the chain opened four distribution centers in the quarter, bringing its total to 25. The company attributed the higher gross margin to "a stronger commercial margin and lower transportation costs as a percentage of revenue, despite the opening of four distribution centers in 3Q26", while fast sales growth covered rising store wages.
What to watch: store operating expenses as a percentage of revenue in 2027. Falling store costs would prove that 20% same-store sales growth can absorb mandatory Mexican wage increases.
Suppliers Funded Expansion and Added Cash
Tiendas 3B sells groceries for cash in days but pays its suppliers weeks later, creating negative working capital that generates cash as the chain grows. Hatoum said "Cash flow generation remained strong, fully funding our expansion during the quarter." In the third quarter, operating cash flow more than doubled to Ps. 2,765 million, leaving Ps. 1,658 million in free cash flow after Ps. 1,107 million of capital spending on stores, warehouses and equipment.
Over the first nine months of 2026, money owed to suppliers rose by Ps. 3,328 million while inventories grew by only Ps. 458 million, lifting nine-month operating cash flow 127.8% to Ps. 7,051 million. What to watch: supplier payables relative to inventory at year-end. A widening gap means vendors are funding the faster pace of store openings.
Lower Stock Compensation Turned Net Profit Positive
In June 2025 the board finalized its Liquidity Event Plan, an executive stock award granted after the initial public offering that vests over three years. Accounting rules require Tiendas 3B to record most of this non-cash cost early in the vesting period. That accounting rule pushed the retailer into a Ps. 1,424 million net loss in the third quarter of 2025, when stock compensation hit Ps. 1,574 million, or 7.8% of revenue.
This quarter, the non-cash charge dropped 65.0% to Ps. 550 million, or 1.9% of revenue, swinging the company to a reported net profit of Ps. 23 million. What to watch: fourth-quarter stock compensation against the company's Ps. 489 million projection. Staying on schedule sets up a drop from Ps. 2,376 million this year to Ps. 879 million in 2027, lifting reported profit.
🐻 Bear Case
Stock Grants Still Dilute Shareholders by 30%
Management emphasizes EBITDA excluding stock pay because the awards require no cash outlay and are already included in the fully diluted share count. That framing sets aside how much of the company those awards transfer to insiders, and how heavily the remaining costs weigh on net profit.
- Diluted shares for earnings per share: 162.5 million, 30.4% above the 124.6 million basic share count
- Illustrative fully diluted shares: 165.4 million, up 4.6% from 158.1 million a year ago by our math
- Income tax expense: Ps. 290 million on Ps. 313 million of pre-tax profit, a 92.6% effective tax rate by our math
Because the stock grants are not deductible for Mexican taxes, income taxes consumed 92.6% of pre-tax profit and left just Ps. 23 million for shareholders, or Ps. 0.14 per diluted share. Even as the quarterly accounting charge shrinks, the 35.2 million net shares reserved for option and stock plans permanently reduce outside shareholders' claim on future earnings.
What to watch: new awards under the 2024 Equity Incentive Plan in the annual filing. Additional grants would keep the diluted share count climbing after the 2025 executive plan finishes vesting.
Unexplained Cash Pile and Dual-Class Control
Three governance and competitive concerns received no new explanation in the release.
- Idle equity proceeds: Tiendas 3B raised Ps. 1,487 million of new equity in May 2026 even though operations fund all store openings, and total cash plus bank deposits now sits at Ps. 7,295 million by our math; watch for a stated use of cash.
- Dual-class voting control: Hatoum's vehicle controls 45.2% of voting rights with 11.3% of the shares, limiting minority shareholders' say on executive pay; watch the annual report for governance changes.
- Hard-discount competition: rival retailer Femsa is expanding its Bara discount chain across Mexico; watch whether Tiendas 3B's gross margin or same-store sales slow in overlapping regions.
💲 Other KPIs
Cash rent paid for store and warehouse buildings rose 37.8% from a year ago and 7.6% from last quarter as the store base grew 19.1%. Under international accounting rules, Tiendas 3B records rent as depreciation and lease interest rather than operating expense, so EBITDA leaves out this Ps. 638 million cash cost.
Total cash and short-term bank deposits rose 19.4% from last quarter and 87.7% from a year ago by our math. The balance includes Ps. 3,075 million in pesos and $237 million (Ps. 4,220 million) in US dollar bank deposits, which generated a Ps. 97 million foreign-exchange gain in the quarter as the dollar strengthened.
🔮 Guidance
Unchanged. The company still expects non-cash stock compensation of Ps. 489 million in the fourth quarter, down 11.2% from the third quarter and down 45.1% from Ps. 891 million a year earlier by our math. The schedule includes Ps. 235 million for the Liquidity Event Plan and Ps. 254 million for option and restricted-stock plans.
Cut. The full-year non-cash stock compensation projection moved down Ps. 3 million after third-quarter expense came in slightly below plan, pointing to an 18.9% decline from 2025 by our math. After a Ps. 617 million jump when awards were finalized in mid-2025, revisions have been tiny: Ps. 0 million, -Ps. 12 million, and -Ps. 3 million. For 2027, the schedule projects Ps. 879 million, a 63.0% drop.
❓ Key Questions
Why has Tiendas 3B stopped updating its annual targets?
In late 2025, management forecast 2026 revenue growth of 29–32% and same-store sales growth of 13–16%, but has not mentioned those numbers for three quarters. Nine-month revenue is already up 37.7%, implying fourth-quarter growth of just 12.2% at the old midpoint by our math.
What is the plan for the $237 million in dollar deposits?
Supplier credit and store cash flows covered all Ps. 2,763 million of nine-month capital spending and still added cash. Yet the company raised Ps. 1,487 million in a May 2026 share offering and holds Ps. 4,220 million in US dollar bank deposits with no stated purpose.
Where does private-label sales share stand this year?
Store-brand goods rose from 53.6% of merchandise sales in 2024 to 58.2% in 2025 and are the main driver of customer loyalty and gross margin. Management has not disclosed the percentage in 2026.
How much did the four new warehouses cost to open?
Opening four distribution centers in a single quarter expanded the logistics network by 19% from last quarter, yet gross margin rose 0.5 percentage points and administrative costs excluding stock pay fell to 2.6% of sales. Investors need to know if start-up costs were deferred into the fourth quarter.