Tiendas 3B opened 593 net new stores over the past 12 months while continuing to fund its organic expansion internally through a structurally negative working-capital model that has become an important part of the Mexican hard-discount grocery retailer’s growth strategy.
The company opened 155 net new stores during the second quarter, bringing its total store count to 3,624 locations as of June 30. The latest openings extended a period of rapid expansion across the company’s footprint, with Tiendas 3B adding 593 net stores during the trailing 12 months. That compares with 528 net new stores opened during the comparable prior-year period, indicating that the retailer has continued to accelerate the pace of its expansion even as its store base has grown substantially larger.
Tiendas 3B is also investing in the logistics infrastructure needed to support that broader network. The company operated 21 distribution centers at the end of the quarter, up from 16 a year earlier. Expanding distribution capacity is increasingly important as the retailer adds hundreds of stores annually and seeks to maintain product availability, inventory efficiency and low operating costs across a geographically larger footprint.
The rapid store growth has been accompanied by strong performance at existing locations. Second-quarter same-store sales increased 20%, showing that the company’s revenue growth is being driven by both new-unit expansion and rising sales from its established store base. Total Q2 revenue increased 38.7% to Ps. 26.04 billion, while EBITDA excluding non-cash share-based compensation increased 43.8% to Ps. 1.58 billion.
The combination of strong comparable-store sales and continued store openings gives Tiendas 3B multiple avenues for growth. New locations increase the company’s physical presence and customer reach, while higher sales at mature stores provide additional operating leverage across the existing network.
Tiendas 3B’s working-capital structure remains central to its ability to sustain that expansion. The company operates with structurally negative working capital, meaning it is generally able to sell inventory and collect cash from customers before it is required to pay suppliers. This dynamic allows growth in the business to generate additional liquidity rather than requiring substantial amounts of incremental working capital.
That model was reflected in first-half cash generation. Operating cash flow increased to Ps. 4.29 billion from Ps. 1.96 billion a year earlier. The stronger cash flow gives Tiendas 3B the ability to invest in new stores, distribution centers and other infrastructure without relying heavily on external financing to support organic growth.
Management emphasized that the company’s expansion continues to be fully self-funded. Maintaining that funding model could become increasingly valuable as Tiendas 3B scales, particularly because the retailer is simultaneously investing in physical locations and the distribution infrastructure required to support them.
KEY QUOTES:
“Cash flow generation was strong in the quarter, supported by robust revenue growth, healthy operating profitability, and our structurally negative working capital model. As a result, our organic expansion continues to be fully self-funded.”
K. Anthony Hatoum, Chairman and CEO of Tiendas 3B
