#Mexico #Mexico City #Retail Growth #Chedraui #Investor Dividends

Grupo Comercial Chedraui Reports Impressive Q4 2024 Results

Grupo Comercial Chedraui, S.A.B. de C.V. has recently revealed its outstanding performance for the fourth quarter of 2024. This period not only marks a significant accomplishment in same-store sales growth but also showcases the company’s strategic expansions, further solidifying its position in the competitive retail market.

Strong Sales Performance

During the fourth quarter, Chedraui experienced a 2.9% increase in same-store sales (SSS) in Mexico, surpassing the ANTAD metrics for the eighteenth consecutive quarter. The growth signifies the company’s effective marketing strategies and customer engagement initiatives. In the U.S., Chedraui USA reported a growth of 0.8% in SSS, indicating a sustained positive trend across the border.

The consolidated EBITDA margin stood at 7.6%, which, when adjusted for the RCDC impact, improved to 8.0%. This improvement reflects efficient operational management and higher profitability levels. Chedraui’s EBITDA margin for its retail and real estate sectors in Mexico was reported at 8.6%, while the margin for Chedraui USA was 6.8%, increasing to 7.4% when considering exclusive impacts from RCDC.

Robust Expansion Strategy

The company has strategically focused on expanding its physical presence and enhancing customer experience. Notably, 57 new stores were opened in Mexico and 2 in the U.S. during Q4 2024. For the entire year, Chedraui opened a total of 84 stores in Mexico and 6 in the United States, bringing their total count to 541 in Mexico and 384 in the U.S.. CEO Antonio Chedraui remarked that this growth reflects their customer-centric approach that has driven market share gains against competitors.

Commitment to Customer Engagement

A critical aspect of Chedraui’s growth has been its loyalty program “Mi Chedraui,” which has registered 13 million members, marking a 5.7% increase from the previous year. This initiative has enabled the company to effectively understand customer preferences, allowing for data-driven promotional strategies, resulting in the identification of 74% of sales through unique customer insights in Mexico.

Financial Health

Chedraui's financial position remains strong, with a net debt to EBITDA ratio of -0.18x at the end of Q4. Through enhanced cash flow generated from operations, the company reported a cash position of 4,330 million pesos.

In terms of investments, the capital expenditure (CAPEX) for FY 2024 amounted to 11,454 million pesos, which is 53.0% higher than 2023, indicating a robust increase due to organic growth and significant investments in the Rancho Cucamonga distribution center. This is expected to facilitate improved EBITDA margins for El Super and Smart & Final of approximately 50 basis points by 2026.

Rewarding Investors

Reflecting confidence in its financial health and growth prospects, the Board of Directors has approved a substantial dividend distribution plan for investors. This plan includes an ordinary dividend of 1,007 million pesos, scheduled for distribution in April 2025, supplemented by extraordinary dividends of 570 million pesos each in November and December. In total, the dividends for 2024 will reach 2,147 million pesos, constituting 32.0% of the net income attributable to controlling interest.

Conclusion

Chedraui's fourth quarter results highlight the effectiveness of its growth strategy and customer-centric approach. As the company continues to expand both domestically and in the U.S., it sets a solid foundation for future growth while ensuring rewarding returns for its investors. The strong quarterly performance cements Grupo Comercial Chedraui’s status as a reliable player in the retail sector, paving the way for further advancements in 2025 and beyond.