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BBB FOODS INC

BBB FOODS INCTBBB決算レポート

NYSE · 必須消費財 · 小売り八百屋

Humpty Dumpty Snack Foods is an American food company, operating as a subsidiary of Old Dutch Foods, that packages and sells snack foods. The company is named after the nursery rhyme character and features the character as the company logo. Humpty Dumpty products are generally sold in New England, Quebec and Atlantic Canada.

What changed in BBB FOODS INC's 20-F — 2023 vs 2024

Top changes in BBB FOODS INC's 2024 20-F

376 paragraphs added · 373 removed · 273 edited across 6 sections

Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3. KEY INFORMATION 1 A. [Reserved] 1 B. CAPITALIZATION AND INDEBTEDNESS 1 C. REASONS FOR THE OFFER AND USE OF PROCEEDS 1 D. RISK FACTORS 1 ITEM 4. INFORMATION ON THE COMPANY 26 A. HISTORY AND DEVELOPMENT OF THE COMPANY 26 B. BUSINESS OVERVIEW 30 C. ORGANIZATIONAL STRUCTURE 41 D.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3. KEY INFORMATION 1 A. [Reserved] 1 B. CAPITALIZATION AND INDEBTEDNESS 1 C. REASONS FOR THE OFFER AND USE OF PROCEEDS 1 D. RISK FACTORS 1 ITEM 4. INFORMATION ON THE COMPANY 26 A. HISTORY AND DEVELOPMENT OF THE COMPANY 26 B. BUSINESS OVERVIEW 29 C. ORGANIZATIONAL STRUCTURE 41 D.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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If any of these events result in the closure, or a limitation on operating hours, of one or more of our distribution centers, a significant number of stores, our sourcing offices, our corporate headquarters or data center or impact one or more of our key suppliers, our operations and financial performance could be materially 9 Table of Contents and adversely affected through an inability or reduced ability to make deliveries, process payroll or provide other support functions to our stores and through lost sales.
If any of these events result in the closure, or a limitation on operating hours, of one or more of our distribution centers, a significant number of stores, our sourcing offices, our corporate headquarters or data center or impact one or more of our key suppliers, 9 Table of Contents our operations and financial performance could be materially and adversely affected through an inability or reduced ability to make deliveries, process payroll or provide other support functions to our stores and through lost sales.
Litigation trends and expenses and the outcomes of litigation cannot be predicted with certainty and adverse litigations, trends, expenses and outcomes could have a material adverse effect on our business, financial condition, results of operations and prospects. 11 Table of Contents We will continue to be subject to legal proceedings and we may be subject to investigations.
Litigation trends and expenses and the outcomes of litigation cannot be predicted with certainty and adverse litigations, trends, expenses and 11 Table of Contents outcomes could have a material adverse effect on our business, financial condition, results of operations and prospects. We will continue to be subject to legal proceedings and we may be subject to investigations.
There can be no assurance that the USMCA will not be renegotiated, or its terms will continue to drive growth in Mexico, or that U.S. and Mexico trade relations will not deteriorate leading to further imposition of trade barriers.
There can be no assurance that the USMCA will not be renegotiated, or its terms will continue to drive growth in Mexico, or that U.S. and Mexico trade relations will not further deteriorate leading to further imposition of trade barriers.
Any change in the current consumer protection or outer regulatory policies could have a significant effect on Mexican consumer service providers, including us, variations in interest rates, demand for our products and services, market conditions, and the prices of and returns on Mexican securities. Mexican political events may significantly affect our business operations.
Any change in the current consumer protection or outer regulatory policies could have a significant effect on Mexican consumer service providers, including us, variations in interest rates, demand for our products and services, market conditions, and the prices of and returns on Mexican securities. Political events in Mexico may significantly affect our business operations.
As a result of the above, even though we are required to furnish reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to British Virgin Islands law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company. 21 Table of Contents As a foreign private issuer, we are permitted to, and we will, rely on exemptions from certain corporate governance standards applicable to U.S. issuers, including the requirement that a majority of an issuer’s directors consist of independent directors.
As a result of the above, even though we are required to furnish reports on Form 6-K disclosing the limited information which we have made or are required to make public pursuant to British Virgin Islands law, or are required to distribute to shareholders generally, and that is material to us, you may not receive information of the same type or amount that is required to be disclosed to shareholders of a U.S. company. 21 Table of Contents As a foreign private issuer, we are permitted to, and we do, rely on exemptions from certain corporate governance standards applicable to U.S. issuers, including the requirement that a majority of an issuer’s directors consist of independent directors.
The political situation in Mexico could negatively affect our operating results. In Mexico, political instability has been a determining factor in business investment. Significant changes in laws, public policies and/or regulations or the use of public referendums ( consultas populares ) could affect Mexico’s political and economic situation, which could, in turn, adversely affect our business.
The political situation in Mexico could negatively affect our operating results. In Mexico, political instability has been a determining factor in business investment and economic conditions. Significant changes in laws, public policies and/or regulations or the use of public referendums ( consultas populares ) could affect Mexico’s political and economic situation, which could, in turn, adversely affect our business.
However, consumer demand generally decreases during economic downturns, which will negatively affect our business and results of operations. Fluctuations in the U.S. economy may adversely affect Mexico’s economy and our business. The United States is the single country with the highest share of trade with Mexico.
However, consumer demand generally decreases during economic downturns, which will negatively affect our business and results of operations. Fluctuations in the U.S. economy may adversely affect Mexico’s economy and our business. The United States is the country with the highest share of trade with Mexico.
In addition to the proceeds that we received from our initial public offering, cash flows from our operating activities have been, and we expect that these cash flows will continue to be, the single largest source of our liquidity and capital resources.
In addition to the proceeds that we received from our initial public offering (our “IPO”), cash flows from our operating activities have been, and we expect that these cash flows will continue to be, the single largest source of our liquidity and capital resources.
Under Mexican law, our Mexican subsidiaries may only pay dividends, if among other things, any existing losses applicable to prior years have been made up or absorbed into shareholders equity and after at least 5% of net profits for the relevant fiscal year have been allocated to a legal reserve until the amount of the reserve equals 20% of a company’s paid-in capital stock.
Under Mexican law, our Mexican subsidiary may only pay dividends, if among other things, any existing losses applicable to prior years have been made up or absorbed into shareholders equity and after at least 5% of net profits for the relevant fiscal year have been allocated to a legal reserve until the amount of the reserve equals 20% of a company’s paid-in capital stock.
As a foreign private issuer, however, we are permitted to, and we will, follow home country practice in lieu of the above requirements. See “Item 10. Additional Information–B.
As a foreign private issuer, however, we are permitted to, and we follow home country practice in lieu of the above requirements. See “Item 10. Additional Information–B.
Our growth has been largely focused in 15 states across the center of Mexico which are generally more densely populated and developed than other regions in Mexico. Expansion into new regions involves risks and uncertainties related to our ability to replicate our business model, efficiently expand our logistics capabilities and achieve profitability.
Our growth has been largely focused in 16 states across the center of Mexico which are generally more densely populated and developed than other regions in Mexico. Expansion into new regions involves risks and uncertainties related to our ability to replicate our business model, efficiently expand our logistics capabilities and achieve profitability.
Our business is subject to a significant number of laws, rules and regulations, including those relating to anti-bribery, anti-corruption and anti-money laundering. However, the Mexican regulatory regime related to anti-bribery, anti-corruption and anti-money laundering legislation is still developing and could be less stringent than anti-bribery, anti-corruption and anti-money laundering legislation, which has been implemented in other jurisdictions.
Our business is subject to a significant number of laws, rules and regulations, including those relating to anti-bribery, anti-corruption, anti-money laundering, and sanctions. The Mexican regulatory regime related to anti-bribery, anti-corruption, anti-money laundering, and sanctions legislation is still developing and could be less stringent than anti-bribery, anti-corruption, anti-money laundering, and sanctions legislation, which has been implemented in other jurisdictions.
To the extent that any health disruptions affect the Mexican and global economy and our business, it may also heighten other risks described under the “Risk Factors” heading, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, 15 Table of Contents payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements.
To the extent that any health disruptions affect the Mexican and global economy and our business, it may also heighten other risks described under the “Risk Factors” heading, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements.
If we or our Mexican subsidiaries fail to comply with the requirements to pay dividends under Mexican law, we may not be able to make distributions to our shareholders or service our debt obligations, which could ultimately have a material adverse effect on us.
If we or our Mexican subsidiary fail to comply with the requirements to pay dividends under Mexican law, we may not be able to make distributions to our shareholders or service our debt obligations, which could ultimately have a material adverse effect on us.
Any failure or delay to pass on increased costs may adversely affect our profitability.” A material devaluation or depreciation of the Mexican peso against the U.S. dollar may result in disruption of the international foreign exchange markets and may limit our ability to transfer or to convert Mexican pesos into U.S. dollars and other currencies to make timely payments of interest and principal on our U.S. dollar-denominated debt or obligations in other currencies.
Any failure or delay to pass on increased costs may adversely affect our profitability.” A material devaluation or depreciation of the Mexican peso against the U.S. dollar may result in disruption of the international foreign exchange markets and may limit our ability to transfer or to convert Mexican pesos into U.S. dollars and other currencies to make timely payments of our U.S. dollar-denominated obligations.
Under our memorandum and articles of association, to the extent allowed by law, the rights and obligations among or between us, any of our current or former directors, officers and employees and any current or former shareholder will be governed exclusively by the laws of the British Virgin Islands and subject to the exclusive jurisdiction of the British Virgin Islands courts, unless those rights or obligations do not relate to or arise out of their capacities as such.
Under our memorandum and articles of association, to the extent allowed by law, the rights and obligations among or between us, any of our current or former directors, officers and employees and any current or former shareholder are governed exclusively by the laws of the British Virgin Islands and subject to the exclusive jurisdiction of the British Virgin Islands courts, unless those rights or obligations do not relate to or arise out of their capacities as such.
In addition, we intend to rely on exemptions from certain U.S. rules which will permit us to follow British Virgin Islands legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants.
In addition, we rely on exemptions from certain U.S. rules which permit us to follow British Virgin Islands legal requirements rather than certain of the requirements that are applicable to U.S. domestic registrants.
The occurrence of one or more natural disasters, such as Hurricane Otis that struck Acapulco, Guerrero on Mexico’s pacific coast on October 25, 2023 where we have 54 stores, and other future hurricanes, fires, floods, tornadoes, earthquakes, unusual weather conditions, pandemic outbreaks or other health crises, political or civil unrest, acts of violence or terrorism, looting (including within our stores, distribution centers or other Company property), or disruptive global political events or similar disruptions could adversely affect our reputation, business and financial performance.
The occurrence of one or more natural disasters, such as Hurricane Otis and Hurricane John that struck Acapulco, Guerrero on Mexico’s pacific coast on October 25, 2023 and September 23, 2024, respectively, where we have 54 stores, and other future hurricanes, fires, floods, tornadoes, earthquakes, unusual weather conditions, pandemic outbreaks or other health crises, political or civil unrest, acts of violence or terrorism, looting (including within our stores, distribution centers or other Company property), or disruptive global political events or similar disruptions could adversely affect our reputation, business and financial performance.
In addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of our Class A common shares, regardless of our 22 Table of Contents operating performance.
In addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of our Class A common shares, regardless of our operating performance.
Although this new rule was voluntarily stayed by the SEC on April 4, 2024, pending resolution of multiple challenges to be heard by the Eighth Circuit Court, we cannot assure you that the stay will not be lifted in the future. Meeting stakeholder expectations and regulatory requirements could require additional resources and compliance costs.
Although this new rule was voluntarily stayed by the SEC on April 4, 2024, pending resolution of multiple challenges to be heard by the United States Court of Appeals for the Eighth Circuit, we cannot assure you that the stay will not be lifted in the future. Meeting stakeholder expectations and regulatory requirements could require additional resources and compliance costs.
Our corporate affairs will be governed by our memorandum and articles of association, the Companies Act and the common law of the British Virgin Islands. Under our memorandum and articles of association, we indemnify and hold our directors harmless against all claims and suits brought against them, subject to limited exceptions.
Our corporate affairs are governed by our memorandum and articles of association, the Companies Act and the common law of the British Virgin Islands. Under our memorandum and articles of association, we indemnify and hold our directors harmless against all claims and suits brought against them, subject to limited exceptions.
In the past, following periods of volatility in the market price of certain companies’ securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or results of operations.
In the past, following periods of volatility in the market price of certain companies’ 22 Table of Contents securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or results of operations.
We are still in the process of implementing Internal Control—Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We are still in the process of implementing Internal Control-Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Past economic crises that have occurred in the United States, China or in countries with emerging 14 Table of Contents markets could cause a decrease in the levels of interest in the securities issued by companies with Mexican operations.
Past economic crises that have occurred in the United States, China or in countries with emerging markets could cause a decrease in the levels of interest in the securities issued by companies with Mexican operations.
Since some of the information we receive is considered as sensitive in terms of the Mexican Federal Law on Personal Data Protection ( Ley Federal de Protección de Datos Personales en Posesión de los Particulares ), any breaches or perceived breaches of data privacy may lead to a wide range of sanctions from regulators as well as reduced confidence from clients and affect our reputation, which may have a substantial effect on our results. 13 Table of Contents We are subject to the Mexican Federal Consumer Protection Law.
Since some of the information we receive is considered as sensitive in terms of the Mexican Federal Law on Personal Data Protection ( Ley Federal de Protección de Datos Personales en Posesión de los Particulares ), any breaches or perceived breaches of data privacy may lead to a wide range of sanctions from regulators as well as reduced confidence from clients and affect our reputation, which may have a substantial effect on our results.
The U.S. government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries, and has made proposals and taken actions related thereto.
The U.S. government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements and treaties with foreign countries, and has made proposals and taken actions related thereto, including imposing generalized tariffs.
Accordingly, the U.S. economy heavily influences the Mexican economy, and therefore, the deterioration of the United States’ economy, the termination of the USMCA, claims thereunder or other related events may impact the economy of Mexico.
Accordingly, the U.S. economy heavily influences the Mexican economy, and therefore, the deterioration of the United States’ economy, any amendments to, or termination of, the USMCA, claims thereunder or other related events may impact the economy of Mexico.
Department of Justice) or otherwise be found to be in violation 12 Table of Contents of such laws, which may result in penalties, fines and sanctions and in turn adversely affect our reputation, business, financial condition and results of operations. We are subject to the provisions contained in the Mexican Industrial Property Law.
Department of Justice) or otherwise be found to be in violation of such laws. This may result in penalties, fines, or sanctions and in turn adversely affect our reputation, business, financial condition and results of operations. We are subject to the provisions contained in the Mexican Industrial Property Law.
In the past, no party had a majority in Mexico’s congress, and congressional opposition hampered the passage of laws and reforms. However, as of December 31, 2023, the president’s political party and its allies held a simple majority in the Chamber of Deputies and the Senate and a strong influence in various local legislatures.
In the past, no party had a majority in Mexico’s congress, and congressional opposition hampered the passage of laws and reforms. As of December 31, 2024, the president’s political party and its allies held a qualified majority in the Chamber of Deputies and the Senate and a strong influence in various local legislatures.
We are subject to the Mexican federal anticorruption laws, and similar worldwide anticorruption, anti-bribery and anti-money laundering laws. Failure to comply with these laws could result in penalties, which could harm our reputation and have an adverse effect on our business.
We are subject to the Mexican federal anti-corruption laws, and similar foreign anti-corruption, anti-bribery, anti-money laundering, and sanctions laws. Failure to comply with these laws could result in penalties, which could harm our reputation and have an adverse effect on our business.
Economic conditions in Mexico have become increasingly correlated to economic conditions in the United States as a result of the North American Free Trade Agreement (“NAFTA”), and, subsequently, the USMCA, which has induced higher economic activity between the two countries and increased the remittance of funds from Mexican immigrants working in the United States to Mexican residents.
Economic conditions in Mexico are highly correlated to economic conditions in the United States as a result of the North American Free Trade Agreement, and, subsequently, the USMCA, which has induced higher economic activity between the two countries and increased the remittance of funds from Mexican immigrants working in the United States to Mexican residents.
As of December 31, 2023, all of our 14 distribution centers were leased by us, and we are analyzing the expansion of our distribution capabilities in line with our store openings.
As of December 31, 2024, all of our 16 distribution centers were leased by us, and we are analyzing the expansion of our distribution capabilities in line with our store openings.
Regulatory requirements are also increasing, including a new rule on the Enhancement and Standardization of Climate-Related Disclosures for Investors adopted by the U.S.
Regulatory requirements relating to ESG matters are also increasing, including a new rule on the Enhancement and Standardization of Climate-Related Disclosures for Investors adopted by the U.S.
Major Shareholders.” As a result, and for so long as our principal shareholder continues to beneficially own a sufficient number of Class B common shares and Class C common shares, our principal shareholder will have significant influence over the outcome of all decisions taken by our shareholders.
See “Item 7. Major Shareholders and Related Party Transactions–A. Major Shareholders.” As a result, and for so long as our principal shareholder continues to beneficially own a sufficient number of Class B common shares and Class C common shares, our principal shareholder will have significant influence over the outcome of all decisions taken by our shareholders.
However, the foregoing does not include Class C common shares that are held by our principal shareholder and our directors and officers in respect of both unvested and vested (but currently unexercisable) stock options or delayed-delivery awards under the Liquidity Event Bonus Plan and the Founder Liquidity Bonus, as applicable.
However, the foregoing does not include Class C common shares that are held by our principal shareholder and our directors and officers in respect of both unvested and vested (but currently unexercisable) stock options or delayed-delivery awards or allocations under the Liquidity Event Share Plan and the Bolton Partners Share Allocation, as applicable.
Our principal shareholder owns all of our Class B common shares and a portion of our Class C common shares, representing approximately 46.4% of the voting power and 11.6% of the total number of our outstanding common shares, and will therefore have significant influence over matters requiring shareholder approval.
Our principal shareholder owns all of our Class B common shares and a portion of our Class C common shares, representing approximately 44.7% of the voting power and 9.6% of the total number of our outstanding common shares, and will therefore have significant influence over matters requiring shareholder approval.
We may be unable to timely complete our evaluation testing and any required remediation. 23 Table of Contents If we fail to achieve and maintain an effective internal control environment or remediate any identified material weaknesses and other deficiencies or discover and address future material weaknesses or deficiencies, we could suffer material misstatements in our financial statements, fail to meet our reporting obligations or fail to prevent fraud, which would likely cause investors to lose confidence in our reported financial information.
If we fail to achieve and maintain an effective internal control environment or remediate any identified material weaknesses and other deficiencies or discover and address future material weaknesses or deficiencies, we could suffer material misstatements in our financial statements, fail to meet our reporting obligations or fail to 23 Table of Contents prevent fraud, which would likely cause investors to lose confidence in our reported financial information.
In the event that the Mexican economy experiences a deterioration in GDP growth or of economic conditions such as inflation, interest rate increases, downgrade of sovereign debt, among other factors, the activities, financial situation, operating results, cash flows and/or prospects of the Company, could be adversely and significantly affected.
In the event that the Mexican economy experiences a deterioration in 14 Table of Contents gross domestic product (“GDP”) growth or of economic conditions such as inflation, interest rate increases, downgrade of sovereign debt, among other factors, the activities, financial situation, operating results, cash flows and/or prospects of the Company, could be adversely and significantly affected.
Prior to our initial public offering (“IPO”), we were a private company and had had limited accounting and financial reporting personnel and other resources with which to address our internal controls and procedures.
Prior to our IPO, we were a private company and had limited accounting and financial reporting personnel and other resources with which to address our internal controls and procedures.
We cannot make assurances that any events in the United States or elsewhere will not materially and adversely affect us. The effects of public health crises may amplify the risks and uncertainties facing our business.
We cannot make assurances that any events in the United States or elsewhere will not materially and adversely affect us. The effects of public health crises may amplify the risks and uncertainties facing our business. Pandemic outbreaks have impacted and may continue to impact our business.
In the year ended December 31, 2023, we purchased products from 322 suppliers, with our largest supplier accounting for 3.7% of our total purchases, and the five largest suppliers accounting for 16.8% of our total purchases. Although we have developed a broad network of suppliers, some of our top selling products are only supplied by a single supplier or manufacturer.
In the year ended December 31, 2024, we purchased products from 346 suppliers, with our largest supplier accounting for 3.6% of our total purchases, and the five largest suppliers accounting for 15.3% of our total purchases. Although we have developed a broad network of suppliers, some of our top selling products are only supplied by a single supplier or manufacturer.
In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our Class A common shares or publish inaccurate or unfavorable research about our business, the price of our Class A common shares would likely decline.
If one or more of the analysts who cover us downgrade our Class A common shares or publish inaccurate or unfavorable research about our business, the price of our Class A common shares would likely decline.
We are subject to laws and regulations related to consumer protection, particularly with respect to our marketing and promotional programs.
We are subject to the Mexican Federal Consumer Protection Law. We are subject to laws and regulations related to consumer protection, particularly with respect to our marketing and promotional programs.
Our private labels may not be successful in improving our gross profit and may increase certain of the risks we face. Our business has expanded its own range of private label items, which included 95 different private label brands and over 422 stock keeping units (“SKUs”) as of December 31, 2023, representing 46.5% of our sales for 2023.
Our private labels may not be successful in improving our gross profit and may increase certain of the risks we face. Our business has expanded its own range of private label items, which included 108 different private label brands and over 458 stock keeping units (“SKUs”) as of December 31, 2024, representing 53.6% of our sales for 2024.
Fluctuation of the Mexican peso relative to the U.S. dollar could adversely affect our financial condition, our ability to repay debt and other obligations and results of operations.
Fluctuation of the Mexican peso relative to the U.S. dollar could adversely affect our financial condition, our ability to meet contractual obligations and results of operations.
Likewise, any action taken by the current U.S. or Mexico administrations, including changes to the USMCA and/or other U.S. government policies that may be adopted by the U.S. administration, could have a negative impact on the Mexican economy, such as reductions in the levels of remittances, reduced commercial activity or bilateral trade or declining foreign direct investment in Mexico.
Likewise, any action taken by the new U.S. or Mexico administrations, including changes to the USMCA, tariffs and/or other U.S. government policies or executive orders that may be adopted or issued by the U.S. administration, could have a negative impact on the Mexican economy, such as reductions in the levels of remittances, changes to the U.S. dollar-Mexican peso exchange rate and cost of capital, reduced commercial activity or bilateral trade or declining foreign direct investment in Mexico.
If any of our employees, contractors, agents, officers or other persons with whom we conduct business engage in fraudulent, corrupt or other improper or unethical business practices or otherwise violate applicable laws, regulations or our own internal compliance systems, we could become subject to one or more enforcement actions by Mexican or foreign authorities (including the U.S.
If any of our employees, contractors, agents, officers or other persons with whom we conduct business engages in fraudulent, corrupt, or other improper or unethical business practices, has or is deemed to have a nexus to an FTO, or otherwise violates applicable laws, regulations, or our own internal compliance systems, we could become subject to one or more enforcement actions by Mexican or foreign authorities (including the U.S.
Although it is presently anticipated that the ESA will have little material impact on us or our operations, as the legislation is new and remains subject to further clarification and interpretation it may not be possible to ascertain the precise impact of any legislative changes or changes in official guidance on us.
As of the date of this annual report, we expect that the ESA will have little material impact on us or our operations, however, because the legislation is new and remains subject to further clarification and interpretation, it may not be possible to ascertain the precise impact of any legislative changes or changes in official guidance on us.
We analyze the potential implications of the application of the Pillar Two rules, including evaluating whether the requirements in each jurisdiction qualify as income taxes, and as of now we have determined there are no quantitative effects. Our operations are subject to the general risks of litigation.
However, additional informational returns or disclosures may be required in certain jurisdictions. We analyze the potential implications of the application of the Pillar Two rules, including evaluating whether the requirements in each jurisdiction qualify as income taxes, and as of now we have determined there are no quantitative effects. Our operations are subject to the general risks of litigation.
Other countries, including Mexico, have threatened retaliatory tariffs on certain U.S. products. Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect our financial performance. In particular, the United States, Mexico and Canada renegotiated the North American Free Trade Agreement.
Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect our financial performance. In particular, the United States, Mexico and Canada renegotiated the North American Free Trade Agreement.
Our inventory balance represented 15.9% and 16.4% of our total assets as of December 31, 2023 and 2022, respectively. Efficient inventory management is a key component of our business success and profitability.
Our inventory balance represented 13.3% and 15.8% of our total assets as of December 31, 2024 and 2023, respectively. Efficient inventory management is a key component of our business success and profitability.
We cannot predict whether potential changes in Mexican governmental and economic policy could adversely affect Mexico’s economic conditions or the sector in which we operate. We cannot provide any assurances that political developments in Mexico, over which we have no control, will not have an adverse effect on our business, results of operations, financial condition and prospects.
We cannot predict whether potential changes in Mexican governmental and economic policy could adversely affect Mexico’s economic conditions or the sector in which we operate, nor can we provide any assurance that political developments in Mexico, or that resulting economic, social and political instability will not have an adverse effect on our business, results of operations, financial condition and prospects or the price of our Class A common shares .
In addition, negative consumer perceptions regarding the sourcing of the products we sell and the sufficiency and transparency of our reporting on ESG matters, where applicable or as required by recently adopted regulations, and events that give rise to actual, potential, or perceived compliance and social responsibility concerns could damage our reputation, result in lost sales, cause our clients to seek alternative sources for their products and make it difficult and costly for us to regain our client’s confidence.
In addition, negative consumer perceptions regarding the sourcing of the products we sell and the sufficiency and transparency of our reporting on ESG matters, where applicable or as required by recently adopted regulations, and events that give rise to actual, potential, or perceived compliance and social responsibility concerns could damage our reputation, result in lost sales, cause our clients to seek alternative sources for their products and make it difficult and costly for us to regain our client’s confidence. 13 Table of Contents We are subject to risks due to breaches of the Federal Law on Protection of Personal Data Held by Private Parties ( Ley Federal de Protección de Datos Personales en Posesión de los Particulares ).
However, in connection with the audit of our financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 in accordance with PCAOB standards, we identified material weaknesses in our internal control over financial reporting as described in “Item 15. Controls and Procedures–D. Changes in Internal Control Over Financial Reporting”.
In connection with the audit of our financial statements as of December 31, 2024 and 2023 and for the years then ended, we identified certain material weaknesses in our internal control over financial reporting as described in “Item 15. Controls and Procedures–B.
A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows Risks Relating to Our Class A Common Shares Our principal shareholder, Bolton Partners Ltd., owns all of our Class B common shares and a portion of our Class C common shares, which in the aggregate represent approximately 46.4% of the voting power of our 18 Table of Contents common shares and therefore exercises significant influence over all matters requiring shareholder approval, which limits or precludes your ability to influence corporate matters.
Risks Relating to Our Class A Common Shares Our principal shareholder, Bolton Partners Ltd., owns all of our Class B common shares and a portion of our Class C common shares, which in the aggregate represent approximately 44.7% of the voting power of our 18 Table of Contents common shares and therefore exercises significant influence over all matters requiring shareholder approval, which limits or precludes your ability to influence corporate matters.
For example, as a result of Hurricane Otis, our stores in Acapulco and surrounding areas suffered significant damages and property loss. Given the extensive damage to Acapulco’s infrastructure, its population and their property, 51 stores were temporarily closed and thus we have delayed our expansion plans in the city which may affect our broader expansion plans, operations and financial performance.
Given the extensive damage to Acapulco’s infrastructure, its population and their property, 51 stores were temporarily closed and thus we have delayed our expansion plans in the city which may affect our broader expansion plans, operations and financial performance.
In addition, as a public company, our reporting obligations may place a significant strain on our management, operational and financial resources, and systems for the foreseeable future.
In addition, as a public company, our reporting obligations may place a significant strain on our management, operational and financial resources, and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.
In light of the increased public focus on employment, health and safety and environmental matters, a violation, or allegations of a violation of such laws or regulations, or a failure to achieve particular standards by any of our manufacturers, could lead to unfavorable publicity and a decline in public demand for our products, or require us to incur expenditure or make changes to our supply chain and other business arrangements to ensure compliance. 10 Table of Contents Any such events concerning us, or any of our manufacturers or suppliers that supply our products could create substantial erosion in the reputation of, or value associated with, the Tiendas 3B brand or our other private labels and could result in a material adverse effect on our business, results of operations, financial condition, or prospects.
In light of the increased public focus on employment, health and safety and environmental matters, a violation, or allegations of a violation of such laws or regulations, or a failure to achieve particular standards by any of our manufacturers, could lead to unfavorable publicity and a decline in public demand for our products, or require 10 Table of Contents us to incur expenditure or make changes to our supply chain and other business arrangements to ensure compliance.
Unless these material weaknesses are timely remediated, there is a risk that our internal control processes may not detect, or detect on a timely basis, misstatements in our financial statements or other financial reporting. In addition, going forward, we may continue to depend on third party advisors in respect of certain financial reporting matters.
Unless these material weaknesses are timely remediated, there is a risk that our internal control processes may not detect, or detect on a timely basis, misstatements in our financial statements or other financial reporting.
Following the identification of these material weaknesses, we have taken measures, and plan to continue to take additional measures, to remediate these issues.
Management’s Annual Report on Internal Control over Financial Reporting.” Following the identification of these material weaknesses, we have taken measures, and plan to continue to take additional measures, to remediate these issues.
Factors influencing such rating may include, among others, concerns about public spending pressure, election cycles, trade tensions, the ability of the state oil company (Petróleos Mexicanos, or “PEMEX”) to meet its obligations and the government’s support of it and others affecting the general macroeconomic outlook.
Factors influencing such rating have historically included, among others, concerns about public spending pressure, election cycles, trade tensions, the ability of the Mexican state oil company (Petróleos Mexicanos, or “PEMEX”) to meet its obligations and the Mexican government’s support of PEMEX and the general macroeconomic outlook, and more recently, the constitutional overhaul has undermined the checks and balances of the country's judicial system.
Given the informal nature of their operations, informal vendors are able to offer substantial cost savings to customers. Our ability to compete depends on our ability to maintain our existing stores and open new stores in advantageous locations, as well as to offer the most competitive prices.
Our ability to compete depends on our ability to maintain our existing stores and open new stores in advantageous locations, as well as to offer the most competitive prices.
Pandemic outbreaks have impacted and may continue to impact our business and the long-term impacts of the social, economic, and financial disruptions caused by pandemics and the government responses to such disruptions are unknown. In addition, the impact on our business of the long-term effects of public health crises will depend on numerous factors that we cannot accurately predict.
The long-term effects of the social, economic, and financial disruptions caused by pandemics, as well as the government responses to these disruptions, remain uncertain. Additionally, the impact on our business from the long-term effects of public health crises will depend on numerous factors that we cannot accurately predict.
The trading market for our Class A common shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company.
The trading market for our Class A common shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. If no or too few securities or industry analysts cover of our company, the trading price for our Class A common shares would likely be negatively affected.
In particular, we compete against informal vendors which represent a significant part of the Mexican economy. Informal vendors also have different formats, from small street side stands to larger, well stocked neighborhood shops or specialty stands in markets, all of which target a customer segment similar to ours.
Informal vendors also have different formats, from small street side stands to larger, well stocked neighborhood shops or specialty stands in markets, all of which target a customer segment similar to ours. Given the informal nature of their operations, informal vendors are able to offer substantial cost savings to customers.
Taking into account such Class C common shares, which our principal shareholder, directors and officers will be entitled to receive at later dates, and assuming net settlement at their respective strike prices, our principal shareholder beneficially owns approximately 45.0% of the combined voting power of our outstanding common shares. See “Item 7. Major Shareholders and Related Party Transactions–A.
Taking into account such Class C common shares, which our principal shareholder, directors and officers will be entitled to receive at later dates, and assuming net settlement at their respective strike prices and a price per Class A common share of US$30.19 (the last reported sale price of our Class A common shares on the New York Stock Exchange on April 25, 2025), our principal shareholder beneficially owns approximately 43.5% of the combined voting power of our outstanding common shares.
In addition, the U.S. government has recently imposed tariffs on certain foreign goods, including steel and aluminum and has indicated a willingness to impose tariffs on imports of other products. Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods and have indicated a willingness to impose additional tariffs on U.S. products.
Some foreign governments, including China, have instituted retaliatory tariffs on certain U.S. goods and have indicated a willingness to impose additional tariffs on U.S. products. Other countries have threatened retaliatory tariffs on certain U.S. products or, like Mexico, have sought to negotiate with the U.S. administration.
As is customary for businesses with high inventory turnover and strict control over working capital, we consistently maintain a negative working capital position. Although we received investments in the form of equity and debt to fund our foundation and initial growth, our working capital and capital expenditure requirements have historically been funded entirely from cash generated by our operations.
Although we have received funding through a combination of equity issuances and incurrence of debt to fund our foundation and initial growth, our working capital and capital expenditure requirements have historically been funded entirely from cash generated by our operations.
However, since Tiendas Tres B, S.A. de C.V., the main operating subsidiary of the Company, has an effective tax rate that exceeds 15%, no additional current tax exposure is expected to be recognized.
Considering Tiendas Tres B, S.A. de C.V., has an effective tax rate that exceeds 15%, no additional current tax exposure is expected to be recognized in connection with the Mexican source of revenue, even if Pillar Two legislation, or similar legislation is adopted by either the British Virgin Islands or Mexico.
As of December 31, 2023, the Movimiento Regeneración Nacional (National Regeneration Movement, or “Morena”), the president’s political party, and its allies held a simple majority in the Chamber of Deputies and the Senate and a strong influence in various local legislatures.
In June 2024, Mexico held presidential, federal and local elections. Claudia Sheinbaum won the presidency and her political party, Movimiento Regeneración Nacional (National Regeneration Movement, or “MORENA”) won a qualified majority in both the Senate and the Chamber of Deputies, as well as most local elections.
Furthermore, once we have fully implemented Internal Control—Integrated Framework (2013 Framework) issued by COSO, and we perform an evaluation of internal controls over financial reporting under the Sarbanes-Oxley Act, we may identify further issues, including additional material weaknesses or control deficiencies.
As a result, we have implemented the Internal Control-Integrated Framework (2013 Framework) issued by COSO and performed an evaluation of internal controls over financial reporting, pursuant to which we identified certain material weaknesses.
Since our IPO, we have been subject to the reporting requirements under the Exchange Act and the Sarbanes-Oxley Act, as well as the rules and regulations of the SEC.
We are working to remediate as quickly as possible the material weaknesses we identified as part of this internal control program by implementing compensating and mitigating controls. Following our IPO, we became subject to the reporting requirements under the Exchange Act and the Sarbanes-Oxley Act, as well as the rules and regulations of the SEC.
Removed
We are subject to risks due to breaches of the Federal Law on Protection of Personal Data Held by Private Parties ( Ley Federal de Protección de Datos Personales en Posesión de los Particulares ).
Added
We also expect to see increased competition from government-run stores ( Tiendas del Bienestar ), whose product offering is being expanded by the current administration, to sell more consumer staples and necessities at low prices. In particular, we compete against informal vendors which represent a significant part of the Mexican economy.
Removed
In June 2024, Mexico will hold presidential elections and will renew the composition of the Chamber of Deputies ( Cámara de Diputados) , as well as local congresses and local governments.
Added
As is customary for businesses with high inventory turnover and strict control over working capital, we consistently maintain a negative working capital position.
Removed
We cannot predict the impact that political developments in Mexico will have on the Mexican economy nor can we provide any assurances that the election or its outcome will not have an adverse effect on our business, financial condition and results of operations.
Added
For example, as a result of Hurricane Otis and Hurricane John, our stores in Acapulco and surrounding areas suffered significant damages and property loss.
Removed
Although the federal administration currently does not have significant power to implement substantial changes in law, policy and regulations in Mexico, including Constitutional reforms, which could negatively affect our business, results of operations, financial condition and prospects, we cannot guarantee that following the upcoming presidential elections in 2024 this will continue to be the case.
Added
Any such events concerning us, or any of our manufacturers or suppliers that supply our products could create substantial erosion in the reputation of, or value associated with, the Tiendas 3B brand or our other private labels and could result in a material adverse effect on our business, results of operations, financial condition, or prospects.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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In addition, we offer spot products: these are quality food and non-food products such as clothing, electronics, household goods and others. We introduce an assortment of approximately 50 spot products every two weeks on average, that offer notably high value for money and higher gross profit margins. They add a treasure hunt factor to our stores.
In addition, we offer spot products: these are quality food and non-food products such as clothing, electronics, household goods and others. We introduce an assortment of approximately 40 spot products every two weeks on average, that offer notably high value for money and higher gross profit margins. They add a treasure hunt factor to our stores.
We indirectly hold 100% equity interests in our Mexican subsidiaries. The following chart and the information set forth in the following paragraph presents our corporate structure, including our principal shareholder and principal subsidiaries.
We indirectly hold 100% equity interests in our Mexican subsidiary. The following chart and the information set forth in the following paragraph presents our corporate structure, including our principal shareholder and principal subsidiaries.
Our provisions for probable losses arising from legal proceedings are estimated and periodically adjusted by management after consideration of the opinions of our external counsel. As of December 31, 2023, we had not recorded any provisions in connection with legal proceedings based on probable loss. However, legal proceedings are inherently unpredictable and subject to significant uncertainties.
Our provisions for probable losses arising from legal proceedings are estimated and periodically adjusted by management after consideration of the opinions of our external counsel. As of December 31, 2024, we had not recorded any provisions in connection with legal proceedings based on probable loss. However, legal proceedings are inherently unpredictable and subject to significant uncertainties.
Our subsidiaries’ operations are primarily governed by the Mexican Corporations Law and associated provisions, while real estate property leasing activities in Mexico are governed by the Mexican Constitution, state civil codes, and various laws and regulations, which provide a legal framework for the use, operation, and transfer of real estate properties in Mexico, including environmental matters.
Our Mexican subsidiary’s operations are primarily governed by the Mexican Corporations Law and associated provisions, while real estate property leasing activities in Mexico are governed by the Mexican Constitution, state civil codes, and various laws and regulations, which provide a legal framework for the use, operation, and transfer of real estate properties in Mexico, including environmental matters.
A typical store is operated by a store manager, two assistant managers, and a team of 6 sales associates on average. The store manager is responsible for managing and developing their team, ordering, restocking, serving and selling to customers, maintaining operating standards, and executing any in-store communication/marketing campaigns.
A typical store is operated by a store manager, two assistant managers, and a team of six sales associates on average. The store manager is responsible for managing and developing their team, ordering, restocking, serving and selling to customers, maintaining operating standards, and executing any in-store communication/marketing campaigns.
ORGANIZATI ONAL STRUCTURE The Company is a holding company incorporated in the British Virgin Islands. The Company has no material operations of its own and substantially all of its operations are conducted through the Company’s Mexican subsidiaries. Holders of Class A common shares own equity interests in the British Virgin Islands holding company, and not in such Mexican subsidiaries.
ORGANIZATI ONAL STRUCTURE The Company is a holding company incorporated in the British Virgin Islands. The Company has no material operations of its own and substantially all of its operations are conducted through the Company’s Mexican subsidiary. Holders of Class A common shares own equity interests in the British Virgin Islands holding company, and not in such Mexican subsidiary.
Geographical Presence We opened our first store in Mexico City and have since expanded primarily in the central region of Mexico. As of December 31, 2023, we were present in Mexico City, State of Mexico, Hidalgo, Puebla, Tlaxcala, Morelos, Querétaro, Guanajuato, Michoacán, Guerrero, Veracruz, Aguascalientes, Nayarit, Jalisco, and San Luis Potosí.
Geographical Presence We opened our first store in Mexico City and have since expanded primarily in the central region of Mexico. As of December 31, 2024, we were present in Mexico City, State of Mexico, Hidalgo, Puebla, Tlaxcala, Morelos, Querétaro, Guanajuato, Michoacán, Guerrero, Veracruz, Aguascalientes, Nayarit, Jalisco, Zacatecas and San Luis Potosí.
With an estimated white space for at least 12,000 additional Tiendas 3B stores in Mexico, we are constantly looking to increase our number of stores and expand into new regions. 31 Table of Contents Our Stores Our stores have been thoughtfully designed to improve our customer’s experience and achieve operational efficiencies.
With an estimated white space for at least 12,000 additional Tiendas 3B stores in Mexico, we are constantly looking to increase our number of stores and expand into new regions. Our Stores Our stores have been thoughtfully designed to improve our customer’s experience and achieve operational efficiencies.
We outsource the manufacturing of these products to over 100 carefully selected local manufacturers with tested supply reliability and quality controls. We are generally able to offer our private label products at a lower cost than that of the branded products they compete with.
We outsource the manufacturing of these products to over 150 carefully selected manufacturers with tested supply reliability and quality controls. We are generally able to offer our private label products at a lower cost than that of the branded products they compete with.
Spot products are quality food and non-food products that we offer in addition to our regularly stocked products. These are offered in limited amounts and offer exceptional value. The selection changes every two weeks on average. For 2022 and 2023, our spot products represented 5.4% and 5.8% of our sales, respectively. Our stores serve low-to-middle income households.
Spot products are quality food and non-food products that we offer in addition to our regularly stocked products. These are offered in limited amounts and offer exceptional value. The selection changes every two weeks on average. For 2023 and 2024, our spot products represented 5.8% and 5.7% of our sales, respectively. Our stores serve low-to-middle income households.
The interior of our stores is well lit, with wide and convenient aisles and reduced shelving height that allows store employees to see the full store, which in turn helps control shrinkage and makes restocking quicker and easier.
The interior of our stores is well lit, 31 Table of Contents with wide and convenient aisles and reduced shelving height that allows store employees to see the full store, which in turn helps control shrinkage and makes restocking quicker and easier.
Sourcing of Our Portfolio of Products Each Tiendas 3B store carries approximately 800 SKUs, as compared to 3,000 SKUs for a convenience store and approximately 10,000 or more SKUs for a conventional supermarket based on analysis of publicly available information.
Sourcing of Our Portfolio of Products 33 Table of Contents Each Tiendas 3B store carries approximately 800 SKUs, as compared to 3,000 SKUs for a convenience store and approximately 10,000 or more SKUs for a conventional supermarket based on analysis of publicly available information.
This allows us to offer and sustain everyday low prices to our customers. • Rapid expansion : In 2023, we averaged a new store opening every 22 hours, which is faster than any other grocery retailer in Mexico.
This allows us to offer and sustain everyday low prices to our customers. • Rapid expansion : In 2024, we averaged a new store opening every 18 hours, which is faster than any other grocery retailer in Mexico.
Due to our low number of SKUs and focus on serving daily grocery needs, we have been able to achieve a high ratio of sales per SKU and a ratio of 3.0 Payable Days to Inventory Days during 2023.
Due to our low number of SKUs and focus on serving daily grocery needs, we have been able to achieve a high ratio of sales per SKU and a ratio of 3.1 Payable Days to Inventory Days during 2024.
Compliance and Controls We are fully committed to maintaining strong compliance and controls for financial reporting, as evidenced by the measures currently being implemented. The Company recognizes the significance of accurate and reliable financial information in building investor trust. To establish a robust internal control framework, the Company is conducting a comprehensive assessment of potential risks and documenting them meticulously.
Compliance and Controls We are fully committed to maintaining strong compliance and controls for financial reporting, as evidenced by the measures currently being implemented. The Company recognizes the significance of accurate and reliable financial information in building investor trust. To establish a robust internal control framework, the Company has conducted a comprehensive assessment of potential risks and documented them meticulously.
As of December 31, 2023, we operated a fleet of 336 same-model trucks and 785 utility vehicles for our District Managers, Zone Managers and other personnel. Standardization simplifies truck management and operations thus reducing costs. For security and for key performance indicator management, we monitor our fleet through real-time geographic positioning, live video, and dual-way audio.
As of December 31, 2024, we operated a fleet of 367 same-model trucks and 971 utility vehicles for our District Managers, Zone Managers and other personnel. Standardization simplifies truck management and operations thus reducing costs. For security and for key performance indicator management, we monitor our fleet through real-time geographic positioning, live video, and dual-way audio.
We launched our first private label, “LactiBu,” a modified liquid milk formula, in May 2005. As of December 31, 2023, we had developed over 95 different private label brands, representing over 422 SKUs. Our value offer to our customers improves continuously as we introduce new private labels and continue to improve existing ones.
We launched our first private label, “LactiBu,” a modified liquid milk formula, in May 2005. As of December 31, 2024, we had developed over 108 different private label brands, representing over 458 SKUs. Our value offer to our customers improves continuously as we introduce new private labels and continue to improve existing ones.
As of December 31, 2023, the size of our stores ranged from smaller than 300 square meters to larger than 450 square meters, with approximately 61% between 300 square meters and 450 square meters. The uniformity of our stores enables us to streamline inventory management and optimize staffing and operational processes.
As of December 31, 2024, the size of our stores ranged from smaller than 300 square meters to larger than 450 square meters, with approximately 58.0% between 300 square meters and 450 square meters. The uniformity of our stores enables us to streamline inventory management and optimize staffing and operational processes.
Bolton Partners Ltd., our principal shareholder, owns approximately 46.4% of the combined voting power of our outstanding common shares, and therefore has significant influence over matters requiring shareholder approval.
Bolton Partners Ltd., our principal shareholder, owns approximately 44.7% of the combined voting power of our outstanding common shares, and therefore has significant influence over matters requiring shareholder approval.
Protection of a trademark in Mexico continues for as long as the brand is registered and used. As of December 31, 2023, we had approximately 1,391 owned brand files and registries in Mexico. In addition, within Mexico our licensors register their own brands granting us the right to use them within the territory. 40 Table of Contents C.
Protection of a trademark in Mexico continues for as long as the brand is registered and used. As of December 31, 2024, we had approximately 1,515 owned brand files and registries in Mexico. In addition, within Mexico our licensors register their own brands granting us the right to use them within the territory. C.
We endeavor to sell our products at the lowest possible prices. We minimize our operating costs throughout all aspects of the value chain, from site selection, store layout, merchandise selection, purchasing, staffing, distribution, and management. These savings are passed on to our customers by reducing the price of our products.
We minimize our operating costs throughout all aspects of the value chain, from site selection, store layout, merchandise selection, purchasing, staffing, distribution, and management. These savings are passed on to our customers by reducing the price of our products.
Private label products are products that we have developed ourselves and which we believe are of comparable or better quality than the equivalent branded alternative offered at our stores. For 2022 and 2023, private label products represented 42.8% and 46.5% of our sales, respectively.
Private label products are products that we have developed ourselves and which we believe are of comparable or better quality than the equivalent branded alternative offered at our stores. For 2023 and 2024, private label products represented 46.5% and 53.6% of our sales, respectively.
We believe that having a diffuse landlord base allows us to achieve better commercial lease terms. Each of our lease follows a standard form of Mexican law governed agreement, which includes a 10-year term with an automatic 10-year renewal and may be terminated at will by us.
No landlord represents more than 6.5% of our lease expense. We believe that having a diffuse landlord base allows us to achieve better commercial lease terms. Each of our lease follows a standard form of Mexican law governed agreement, which generally includes a 10-year term with an automatic 10-year renewal and may be terminated at will by us.
In order to ensure that our pricing remains competitive, we regularly monitor our competitors’ prices based on an index we have established for our top 100 SKUs by sales. We compare prices on average once every two weeks.
In order to ensure that our pricing remains competitive, we regularly monitor our competitors’ prices based on an index we have established for our top 250 SKUs by sales. We compare prices on average once a week.
A fundamental part of our logistics operation is our drivers. We provide a comprehensive 385-hour training program where the operator is taught skills covering mechanics, driver education, regulations, and service culture. 42 Table of Contents As of December 31, 2023, our academy had become compulsory for all our drivers to ensure better logistics efficiency, timeliness and safety. ITEM 4A.
A fundamental part of our logistics operation is our drivers. We provide a comprehensive 385-hour training program where the operator is taught skills covering mechanics, driver education, regulations, and service culture. Since December 31, 2023, our academy has become compulsory for all our drivers to ensure better logistics efficiency, timeliness and safety. ITEM 4A. UNRESOLVED STAFF COMMENTS Not applicable.
When the number of total stores served by any given distribution center approaches the 150-store mark, we proceed to open a new distribution center nearby and redistribute the stores to optimize distances and routing. A typical distribution center is 12,000 square meters, with additional space for a maneuvering yard.
When the number of total stores served by any given distribution center approaches the 150-store mark, we proceed to open a new distribution center nearby and redistribute the stores to optimize distances and routing. Our distribution centers are on average 11,850 square meters, with additional space for a maneuvering yard.
Box 3140, Road Town, Tortola VG1110, British Virgin Islands. Our website is www.tiendas3b.com and our investor relations website is https://www.investorstiendas3b.com/ . 26 Table of Contents In 2004, K.
Our registered office is located at Commerce House, Wickhams Cay 1, P.O. Box 3140, Road Town, Tortola VG1110, British Virgin Islands. Our website is www.tiendas3b.com and our investor relations website is https://www.investorstiendas3b.com/ . 26 Table of Contents In 2004, K.
The shopping experience is typically localized, as most customers live within a 10-street (800-meter) radius of their favored store. They visit our stores three to four times a week, purchasing enough for a maximum of two days. For items we currently do not offer, like fresh fruits and vegetables, they complete their shopping needs within the neighborhood.
They visit our stores three to four times a week, purchasing enough for a maximum of two days. For items we currently do not offer, like fresh fruits and vegetables, they complete their shopping needs within the neighborhood.
The Tiendas 3B product range consists of approximately 800 SKUs of branded, private label and spot products. Branded products are well known national and international brand label goods that we offer at the lowest sustainable price in the market to attract customers and drive traffic. For 2022 and 2023, branded products represented 51.8% and 47.5% of our sales, respectively.
Branded products are well known national and international brand label goods that we offer at the lowest sustainable price in the market to attract customers and drive traffic. For 2023 and 2024, branded products represented 47.5% and 40.6% of our sales, respectively.
This structure, supported by nimble central headquarters, has enabled us to scale efficiently by allowing us to dynamically select new store locations in a constant pursuit of scale and expansion, while achieving positive gross and operating profit.
This structure, supported by nimble central headquarters, has enabled us to scale efficiently by allowing us to dynamically select new store locations in a constant pursuit of scale and expansion, while achieving positive gross and operating profit. Additionally, it enables suppliers to reach our decision makers quickly, fostering collaboration and accelerating the development of private label products.
To launch a product, a marketing and communication campaign is prepared targeting both our clients and our store teams. The purchasing team is tasked with developing enduring partnerships with our private label product suppliers in order to ensure supply chain synchronization, quality consistency and costs efficiencies. Pricing Our pricing policy is designed to attract new customers and retain existing ones.
The purchasing team is tasked with developing enduring partnerships with our private label product suppliers in order to ensure supply chain synchronization, quality consistency and costs efficiencies. Pricing Our pricing policy is designed to attract new customers and retain existing ones. We endeavor to sell our products at the lowest possible prices.
However, the foregoing does not include Class C common shares that will be held by our principal shareholder and our directors and officers in respect of both unvested and vested (but currently unexercisable) stock options or delayed-delivery awards under the Liquidity Event Bonus Plan and the Founder Liquidity Bonus, as applicable.
However, the foregoing does not include Class C common shares that will be held by our principal shareholder and our directors and officers in respect of both unvested and vested (but currently unexercisable) stock options (other than those Class A common shares that were issued upon conversion of Class C common shares acquired upon the net exercise of stock options in connection with our follow-on offering dated February 7, 2025) or delayed-delivery awards under the Liquidity Event Share Plan and the Bolton Partners Share Allocation, as applicable.
Our high purchasing power develops strong supplier relationships which in turn translates to better payment terms and lower purchasing costs that allow us to maintain our low prices, which in turn boosts sales.
Our high purchasing power develops strong supplier relationships which in turn translates to better payment terms and lower purchasing costs that allow us to maintain our low prices, which in turn boosts sales. Our non-private label products are sourced directly form leading consumer good suppliers in Mexico. Our private label products are developed with manufacturer partners.
BUSINESS O VERVIEW Overview We are pioneers and leaders of the grocery hard discount model in Mexico and one of the fastest growing retailers in the country as measured by our sales and store growth rates.
Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings and public conference calls and webcasts. B. BUSINESS O VERVIEW Overview We are pioneers and leaders of the grocery hard discount model in Mexico and one of the fastest growing retailers in the country as measured by our sales and store growth rates.
Major Shareholders.” D. PROPERTY, PLAN TS AND EQUIPMENT Properties As of December 31, 2023, we only owned one property used in our operations. Our remaining 2,287 stores and office space is leased from a wide array of landlords. No landlord represents more than 5.0% of our lease expense.
See “Item 7. Major Shareholders and Related Party Transactions–A. Major Shareholders.” 41 Table of Contents D. PROPERTY, PLAN TS AND EQUIPMENT Properties As of December 31, 2024, we only owned one property used in our operations. Our remaining 2,771 stores and office space is leased from a wide array of landlords.
Our Customers Our customer base is largely composed of smart value shoppers—aligned with our slogan “ tu despensa inteligente ” or “your smart pantry choice.” We serve the low-to middle socioeconomic segments in Mexico, specifically those in the second to ninth income deciles. However, our broader target increasingly encompasses 34 Table of Contents value shoppers across all income brackets.
We also keep samples of every lot received in case we need to investigate a quality-related issue or to send a product to test if it complies with the contracted quality standards. 34 Table of Contents Our Customers Our customer base is largely composed of smart value shoppers—aligned with our slogan “ tu despensa inteligente ” or “your smart pantry choice.” We serve the low-to middle socioeconomic segments in Mexico, specifically those in the second to ninth income deciles.
We are subject to several legal proceedings, including civil and labor claims, which we generally believe are common and incidental to business operations in Mexico. We record provisions, if any, based on our external and in-house counsel’s assessment of the likelihood of loss as well as the history of similar and related proceedings.
We record provisions, if any, based on our external and in-house counsel’s assessment of the likelihood of loss as well as the history of similar and related proceedings.
As of December 31, 2023, we operated 14 distribution centers. Each serves approximately 150 stores, with a capacity to stretch to serve 200 stores, within a 150-kilometer radius, within a capacity to stretch up to a 200-kilometer radius.
Distribution Centers We believe we are highly efficient with our logistics and distributions infrastructure without sacrificing service and speed. As of December 31, 2024, we operated 16 distribution centers. Each serves approximately 150 stores, with a capacity to stretch to serve up to 200 stores, within a 150-kilometer radius, within a capacity to stretch up to a 200-kilometer radius.
Taking into account such Class C common shares which our principal shareholder, directors and officers will be entitled to receive at later dates, and assuming net settlement at their respective strike prices, our principal shareholder beneficially owns approximately 45.0% of the combined voting power of our outstanding common shares. See “Item 7. Major Shareholders and Related Party Transactions–A.
Taking into account such Class C common shares which our principal shareholder, directors and officers will be entitled to receive at later dates, and assuming net settlement at their respective strike prices and a price per Class A common share of US$30.19 (the last reported sale price of our Class A common shares on the New York Stock Exchange on April 25, 2025), our principal shareholder beneficially owns approximately 43.5% of the combined voting power of our outstanding common shares.
Our founder-led management team continues to run the business and has successfully transitioned the company from a startup to Mexico’s 137 th most important company according to Expansión magazine’s ranking of the 500 most important companies in Mexico. The Company was recognized by the Financial Times in 2023 as one of the fastest growing companies in the Americas.
Our Same Store Sales growth has seen consistent double-digit growth over recent years. Our founder-led management team continues to run the business and has successfully transitioned the company from a startup to Mexico’s 119 th most important company according to Expansión magazine’s ranking of the 500 most important companies in Mexico for 2023.
We define our typical customer as anyone who buys groceries, primarily focusing on those looking for value for money, a convenient and pleasant shopping experience, and minimizing transportation costs. Approximately 85.0% of our customers are women, primarily between the ages of 30 and 60. The majority are homemakers (46.0%), followed by employed individuals (28.0%) and small merchants or shopkeepers (15.0%).
However, our broader target increasingly encompasses value shoppers across all income brackets. We define our typical customer as anyone who buys groceries, primarily focusing on those looking for value for money, a convenient and pleasant shopping experience, and minimizing transportation costs. Approximately 91.2% of our customers are women, primarily between the ages of 30 and 60.
Legal and Administrative Proceedings From time to time, we are or may become involved in disputes that arise in the ordinary course of our business. Any claims against us, whether meritorious or not, can be time-consuming, result in costly litigation, require significant management time and result in the diversion of significant operational resources.
Any claims against us, whether meritorious or not, can be time-consuming, result in costly litigation, require significant management time and result in the diversion of significant operational resources. We are subject to several legal proceedings, including civil and labor claims, which we generally believe are common and incidental to business operations in Mexico.
Key control activities are being designed and implemented to mitigate these risks and ensure the integrity of financial reporting. In addition, information and communication channels are being strengthened to promote timely and accurate reporting. The Company’s proactive approach to compliance and controls underscores its commitment to upholding high standards of transparency and adherence to relevant laws and regulatory requirements.
Key control activities are being designed and implemented to mitigate these risks and ensure the completeness and accuracy of financial reporting. In addition, information and communication channels are being strengthened to promote timely and accurate reporting.
We believe that the hard discount segment in Mexico has significant entry barriers for new participants, including: (i) the time and capital it takes to achieve scale and profitability given the inherent low gross margins of a hard discounter; (ii) the knowledge required to find competitive real estate and qualified personnel; (iii) the investment and know-how required to develop a meaningful private label product offering; and (iv) obtaining access to highly qualified senior management and experienced teams.
We believe that the hard discount segment in Mexico has significant entry barriers for new participants, including: (i) the time and capital it takes to achieve scale and profitability given the inherent low gross margins of a hard discounter; (ii) the knowledge required to find competitive real estate and qualified personnel; (iii) the investment and know-how required to develop a meaningful private label product offering; and (iv) obtaining access to highly qualified senior management and experienced teams. 30 Table of Contents Our Business Model Our business model is based on the following pillars: • High rotation of products : By limiting our selection of products, we have been able to achieve a high turnover of sales per SKU, which makes us a relevant buyer of the products we sell, in turn allowing for favorable terms with suppliers. • Strong private label offering : We own 108 different private label brands representing over 458 SKUs, that cover an array of food and non-food products.
ITEM 4. INFORMATION ON THE COMPANY A. HISTORY AND DEVELOPMENT OF THE COMPANY We were incorporated on July 9, 2004 under the laws of the British Virgin Islands with company number 605635. Our principal executive offices are located at Río Danubio 51, Col. Cuauhtémoc, Mexico City, Mexico 06500. Our registered office is located at Commerce House, Wickhams Cay 1, P.O.
ITEM 4. INFORMATION ON THE COMPANY A. HISTORY AND DEVELOPMENT OF THE COMPANY We were incorporated on July 9, 2004 under the laws of the British Virgin Islands with company number 605635. Our principal executive offices are located at Av. Presidente Masaryk 8, Polanco V Sección, Miguel Hidalgo, Mexico City, Mexico 11560.
New customers initially buy in our stores because of the competitive pricing of our branded and spot products. Over time, however, as they become more familiar with our offering, customers begin to try our private label products, which eventually become their preferred choice for their mix of value and quality.
Over time, however, as they become more familiar with our offering, customers begin to try our private label products, which eventually become their preferred choice for their mix of value and quality. The shopping experience is typically localized, as most customers live within a 10-street (800-meter) radius of their favored store.
Each distribution center carries the vast majority of the SKUs we sell, including refrigerated items. Frozen items, a relatively new category, are being rolled out to all our stores gradually as we build frozen refrigeration in our distribution centers. Our distribution centers are designed to be efficient and reduce the amount of man hours required to move our products.
Frozen items, a relatively new category, are being rolled out to all our stores gradually as we build frozen refrigeration in our distribution centers. 42 Table of Contents Our distribution centers are designed to be efficient and reduce the amount of man hours required to move our products: we use cross-docking whenever possible, layouts which allocate space depending on inventory turnover, and floor storage instead of racks, as this is more efficient for fast-moving SKUs.
From 2021 to 2023, our total revenue grew at a compounded annual growth rate (“CAGR”) of 38.2%, reaching Ps.44.1 billion (US$2.6 billion) for 2023, and our number of stores increased from 1,249 as of January 1, 2021 to 2,288 as of December 31, 2023, which represents a CAGR of 35.3%.
From 2021 to 2024, our total revenue grew at a compounded annual growth rate (“CAGR”) of 35.5%, reaching Ps.57.4 billion (US$2.8 billion) for 2024, and our number of stores increased from 1,249 as of January 1, 2021 to 2,772 as of December 31, 2024, which represents a CAGR of 22.1%. 29 Table of Contents Our business model is simple yet disruptive: we offer a limited assortment of products that cover the daily grocery needs of our clients.
We anticipate our personnel needs several years in advance and invest significant resources to ensure that we have the right talent at the right time.
Developing and retaining talent, as well as fostering a strong corporate culture, are key components of our business model and essential to sustaining our rapid growth rates and achieving efficiencies. We anticipate our personnel needs several years in advance and invest significant resources to ensure that we have the right talent at the right time.
In some jurisdictions, the local civil code additionally requires that the landlord grant us a right of first refusal in the event they decide to sell the relevant property to a third party. Distribution Centers We believe we are highly efficient with our logistics and distributions infrastructure without sacrificing service and speed.
To minimize our initial store expenditures, we typically only advance two months of rent and give one month of rent as a security deposit. In some jurisdictions, the local civil code additionally requires that the landlord grant us a right of first refusal in the event they decide to sell the relevant property to a third party.
Our business model is simple yet disruptive: we offer a limited assortment of products that cover the daily grocery needs of our clients. We price our products to offer what is generally market-leading value for money: the lowest sustainable price in the market for a given quality.
We price our products to offer what is generally market-leading value for money: the lowest sustainable price in the market for a given quality. Our stores also offer convenience, since they are generally located within central neighborhoods that allow for daily visits and minimize transportation needs for our customers.
The team identifies the required or potential new product, identifies the potential supplier, develops specifications and tests samples, designs the packaging and image, and selects and registers the brand name. Before launching a private label, the team tests it or a proxy product to determine price elasticity and fine tune the design for maximum sales and performance.
Before launching a private label, the team tests it or a proxy product to determine price elasticity and fine tune the design for maximum sales and performance. To launch a product, a marketing and communication campaign is prepared targeting both our clients and our store teams.
The charts below highlight our growth trajectory from 2019 to 2023. 27 Table of Contents Our sales growth is attributable to both our store footprint expansion as well as Same Store Sales growth from our existing store base. Our Same Store Sales growth has seen consistent double-digit growth over recent years.
Same Store Sales growth is measured by comparing the Same Store Sales of stores that were open during the measurement period. 27 Table of Contents Our sales growth is attributable to both our store footprint expansion as well as Same Store Sales growth from our existing store base.
We perform quality checks of our products when they arrive at our distribution centers and randomly select samples for further laboratory testing. We also keep samples of every lot received in case we need to investigate a quality-related issue or to send a product to test if it complies with the contracted quality standards.
We perform quality checks of our products when they arrive at our distribution centers and randomly select samples for further laboratory testing.
As of December 31, 2023, we had grown to become the leading hard discount retailer in Mexico with 2,288 stores, 14 distribution centers, and, as of December 31, 2023, 21,924 employees.
As of December 31, 2024, we had grown to become the leading hard discount retailer in Mexico with 2,772 stores, 16 distribution centers, and 25,300 employees. The charts below highlight our growth trajectory from 2020 to 2024. __________________ Notes: 1. Total revenue is calculated as the sum of Revenue from sales of merchandise and sales of recyclables. 2.
Our private label products are developed and designed largely by our in-house purchasing team, who are fully responsible for all aspects of the product. Our purchasing team is integral to our operations, ensuring that our supply chain is efficient and scales with our growth.
In the year ended December 31, 2024, we purchased products from 346 suppliers, with our largest supplier accounting for 3.6% of our total purchases, and the five largest suppliers accounting for 15.3% of our total purchases. Our private label products are developed and designed largely by our in-house purchasing team, who are fully responsible for all aspects of the product.
Risk Factors—Risks Relating to Our Business and Industry—Our operations are subject to the general risks of litigation.” Intellectual Property Our most important brands, slogans and logos are protected by trademarks in Mexico through registration with the Mexican Industrial Property Institute ( Instituto Mexicano de la Propiedad Industrial ).
In such a case, should it occur, any appeal process could take several years to conclude, and there is no assurance as to whether we would prevail. Intellectual Property Our most important brands, slogans and logos are protected by trademarks in Mexico through registration with the Mexican Industrial Property Institute ( Instituto Mexicano de la Propiedad Industrial ).
Our non-private label products are sourced directly form leading consumer good suppliers in Mexico. 33 Table of Contents Our private label products are developed with local manufacturers’ partners. These are carefully selected for their ability to provide high-quality products and scale production to meet demand, their efficiency, and their belief in our business model.
These are carefully selected for their ability to provide high-quality products and scale production to meet demand, their efficiency, and their belief in our business model. We seek to build long-term partnerships with transparent pricing, proactively planning future manufacturing capacity and consulting on improved technologies.
Our stores also offer convenience, since they are generally located within central neighborhoods that allow for daily visits and minimize transportation needs for our customers. Our customers visit us on average three to four times per week to fulfill one or two days of groceries.
Our customers visit us on average three to four times per week to fulfill one or two days of groceries. The Tiendas 3B product range consists of approximately 800 SKUs of branded, private label and spot products.
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Accordingly, investors should monitor our investor relations website, in addition to following our press releases, SEC filings and public conference calls and webcasts. 29 Table of Contents B.
Added
“Same Store Sales” is calculated using revenue from sales of merchandise from stores that were operational for at least the full 12 months for the periods under consideration. Stores that were temporarily closed (for one month or more) or permanently closed during the periods under consideration were excluded when calculating this measure.
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Additionally, it enables suppliers to reach our decision makers quickly, fostering collaboration and accelerating the development of private label products. 30 Table of Contents Developing and retaining talent, as well as fostering a strong corporate culture, are key components of our business model and essential to sustaining our rapid growth rates and achieving efficiencies.
Added
The Company was recognized by the Financial Times in 2024 as one of the fastest growing companies in the Americas.
Removed
Our Business Model Our business model is based on the following pillars: • High rotation of products : By limiting our selection of products, we have been able to achieve a high turnover of sales per SKU, which makes us a relevant buyer of the products we sell, in turn allowing for favorable terms with suppliers. • Strong private label offering : We own 95 different private label brands representing over 422 SKUs, that cover an array of food and non-food products.
Added
Our purchasing team is integral to our operations, ensuring that our supply chain is efficient and scales with our growth. The team identifies the required or potential new product, identifies the potential supplier, develops specifications and tests samples, designs the packaging and image, and selects and registers the brand name.
Removed
We seek to build long-term partnerships with transparent pricing, proactively planning future manufacturing capacity and consulting on improved technologies. In the year ended December 31, 2023, we purchased products from 322 suppliers, with our largest supplier accounting for 3.7% of our total purchases, and the five largest suppliers accounting for 16.8% of our total purchases.
Added
Most are homemakers (53.3%), followed by employed individuals (22.3%) and small merchants or shopkeepers (15.4%). New customers initially buy in our stores because of the competitive pricing of our branded and spot products.
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To minimize our initial store expenditures, we 41 Table of Contents typically only advance two months of rent and give one month of rent as a security deposit.
Added
The Company’s proactive approach to compliance and controls underscores its commitment to upholding high standards of transparency and adherence to relevant laws and regulatory requirements. Legal and Administrative Proceedings From time to time, we are or may become involved in disputes that arise in the ordinary course of our business.
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We make use of cross-docking, whenever possible, use an ABC layout, which allocates space depending on inventory turnover, and favor floor storage instead of racks, as it is more efficient for fast-moving SKUs.
Added
Risk Factors—Risks Relating to Our Business and Industry—Our operations are subject to the general risks of litigation.” On February 1, 2023, the Mexican tax authority ( Servicio de Administración Tributaria , or the “SAT”) commenced an audit of our tax return for the fiscal year ended 2018. The SAT is questioning the deductibility of certain expenses for services.
Added
The SAT is also asking for a reduction of the capital contribution account balance. The audit and the substance of questions raised by the SAT are consistent with audits currently undertaken by the SAT with respect to other Mexican corporate taxpayers.
Added
However, the challenges made by the SAT refer to actual operating expenses incurred by the Company, which were necessary for the operation of the Company and which the Company believes were properly supported and documented.
Added
As a result of a mediation process with the tax authority and the Mexican tax ombudsman ( Procuraduría de la Defensa del Contribuyente ), a partial agreement was reached, under which the deductibility of certain items was validated.
Added
As of the date of this annual report, we are in ongoing discussions with the SAT as part of the tax audit regarding the deductibility of certain items.
Added
To the extent the tax audit is not finalized to our satisfaction and the 40 Table of Contents SAT determines that taxes are owed, we expect that we would exercise our legal rights, including the right to appeal such determination.
Added
Each distribution center carries the vast majority of the SKUs we sell, including refrigerated items.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

73 edited+20 added−37 removed60 unchanged
Financial Costs Financial costs are comprised principally of interest on lease liabilities, promissory notes, convertible notes and the financing of transportation and store equipment, including through a reverse factoring arrangement we have entered into with Santander. Exchange Rate Fluctuation Foreign currency transactions are translated to the functional currency using the exchange rates in effect on the transactions dates.
Financial Costs Financial costs are comprised principally of interest on lease liabilities, promissory notes, convertible notes and the financing of transportation and store equipment, including through a reverse factoring arrangement we have entered into with Santander and HSBC. Exchange Rate Fluctuation Foreign currency transactions are translated to the functional currency using the exchange rates in effect on the transactions dates.
A. OPERATIN G RESULTS Overview We are pioneers and leaders of the grocery hard discount model in Mexico and one of the fastest growing retailers in the country as measured by our sales and store growth rates.
OPERATIN G RESULTS Overview We are pioneers and leaders of the grocery hard discount model in Mexico and one of the fastest growing retailers in the country as measured by our sales and store growth rates.
We incurred significant administrative and other expenses in connection with our IPO and, in addition, compliance with the requirements of being a public company will increase our administrative expenses in order to pay our employees, legal counsel and accounting advisors to assist us in, among other things, instituting and monitoring a more comprehensive compliance and board governance function, establishing and maintaining internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act and commencing the preparation and distribution of periodic public reports to our investors and in compliance with our obligations under the federal securities laws.
We incurred significant administrative and other expenses in connection with our IPO and, in addition, compliance with the requirements of being a public company has required us to increase our administrative expenses in order to pay our employees, legal counsel and accounting advisors to assist us in, among other things, instituting and monitoring a more comprehensive compliance and board governance function, establishing and maintaining internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act and commencing the preparation and distribution of periodic public reports to our investors and in compliance with our obligations under the federal securities laws.
We cannot assure you that we will generate sufficient cash flow from operations, or that we will have access to external financing sources, to adequately fund such or any future capital expenditures. Indebtedness Our indebtedness for borrowed money consists of promissory notes and convertible notes which we have incurred to finance our expansion.
We cannot assure you that we will generate sufficient cash flow from operations, or that we will have access to external financing sources, to adequately fund such or any future capital expenditures. Indebtedness Our indebtedness for borrowed money consisted of promissory notes and convertible notes which we have incurred to finance our expansion.
In addition, we obtained directors’ and officers’ liability insurance appropriate for a public company, which is more expensive that such insurance for a non-public company. Components of Our Results of Operations The following is a summary of the principal line items comprising consolidated statements of profit or loss.
In addition, we obtained directors’ and officers’ liability insurance appropriate for a public company, which is more expensive than such insurance for a non-public company. Components of Our Results of Operations The following is a summary of the principal line items comprising consolidated statements of profit or loss.
This discussion, which presents our results for the years ended December 31, 2023, 2022 and 2021, should be read in conjunction with our audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021, together with the notes thereto, in each case included elsewhere in this annual report.
This discussion, which presents our results for the years ended December 31, 2024 and 2023 should be read in conjunction with our audited consolidated financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022, together with the notes thereto, in each case included elsewhere in this annual report.
LIQUIDITY AN D CAPITAL RESOURCES The following discussion of our liquidity and capital resources is based on the financial information derived from our audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021, included elsewhere in this annual report.
LIQUIDITY AN D CAPITAL RESOURCES The following discussion of our liquidity and capital resources is based on the financial information derived from our audited consolidated financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022, included elsewhere in this annual report.
Risk Factors.” In addition, the impact of rising interest rates has adversely affected the cost of borrowing, hedging activities and access to capital in general, which could limit our ability to obtain financing or hedges in a timely manner, on acceptable terms or at all.
Key Information–D. Risk Factors.” In addition, the impact of rising interest rates has adversely affected the cost of borrowing, hedging activities and access to capital in general, which could limit our ability to obtain financing or hedges in a timely manner, on acceptable terms or at all.
As consideration for the Senior Promissory Note holders’ agreement to extend the maturity from May 31, 2024 to 54 Table of Contents December 31, 2026, we agreed to pay an additional US$4,100,000 to the Senior Promissory Note holders on the date the Senior Promissory Notes were repaid with the proceeds of our IPO. 2017 Junior Promissory Notes .
As consideration for the Senior Promissory Note holders’ agreement to extend the maturity from May 31, 2024 to December 31, 2026, we agreed to pay an additional US$4,100,000 to the Senior Promissory Note holders on the date the Senior Promissory Notes were repaid with the proceeds of our IPO. 2017 Junior Promissory Notes .
The Convertible Notes matured on November 20, 2026 and accrued interest at a rate of 14% per annum compounded quarterly. Interest on the Convertible Notes was added to the outstanding principal amount thereof, such that the outstanding principal amount increased by an amount equal to the accrued interest.
The Convertible Notes matured on November 20, 2026 and accrued interest at a rate of 14% per annum compounded quarterly. Interest on the Convertible Notes was added to the outstanding principal amount thereof, such that the outstanding principal amount increased by an amount equal 54 Table of Contents to the accrued interest.
Any disruption in our supply chain could adversely affect our sales and profitability, including due to an inability to procure and stock sufficient quantities of merchandise to match market demand and our expansion plans resulting in lost sales. 56 Table of Contents Inflation and deflation trends .
Any disruption in our supply chain could adversely affect our sales and profitability, including due to an inability to procure and stock sufficient quantities of merchandise to match market demand and our expansion plans resulting in lost sales. Inflation and deflation trends .
As of December 31, 2023, we had approximately 1,391 owned brand files and registries in Mexico. In addition, within Mexico our licensors register their own brands granting us the right to use them within the territory. D. TREN D INFORMATION Principal Factors Affecting our Results of Operations and Material Trends Overall economic trends .
As of December 31, 2024, we had approximately 1,515 owned brand files and registries in Mexico. In addition, within Mexico our licensors register their own brands granting us the right to use them within the territory. D. TREN D INFORMATION Principal Factors Affecting our Results of Operations and Material Trends Overall economic trends .
However, our suppliers’ ability to timely manufacture and deliver the products may be subject to various factors, including, among others, changes to the prices and flow of goods and ingredients, logistics disruptions, availability and cost of raw materials and labor disruptions.
However, our suppliers’ ability to timely manufacture and 55 Table of Contents deliver the products may be subject to various factors, including, among others, changes to the prices and flow of goods and ingredients, logistics disruptions, availability and cost of raw materials and labor disruptions.
We intend for this discussion to provide the reader with information that will assist in 43 Table of Contents understanding our financial statements, the changes in certain key items in those financial statements from period to period and the primary factors that accounted for those changes. We also discuss certain performance metrics that management uses to assess our performance.
We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period and the primary factors that accounted for those changes. We also discuss certain performance metrics that management uses to assess our performance.
The following analysis and discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021, together with the notes thereto, in each case included elsewhere in this annual report, as well as the information set forth under “Presentation of Financial and Other Information.” Our consolidated financial statements are presented in thousands of Mexican pesos, except as otherwise specified.
The following analysis and discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022, together with the notes thereto, in each case included elsewhere in this annual report, as well as the information set forth under “Presentation of Financial and Other Information.” Our consolidated financial statements are presented in thousands of Mexican pesos, except as otherwise specified. 43 Table of Contents A.
Information on the judgments made in applying accounting policies that have significant effect on the amounts recognized in our consolidated financial statements are included in Note 4 to our audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021.
Information on the judgments made in applying accounting policies that have significant effect on the amounts recognized in our consolidated financial statements are included in Note 4 to our audited consolidated financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022. 56 Table of Contents
For 2022 and 2023, private label products represented 42.8% and 46.5% of our sales, respectively. • Spot products are quality food and non-food products that we offer in addition to our regularly stocked products. These are offered in limited amounts and offer exceptional value. The selection changes every two weeks on average.
For 2023 and 2024, private label products represented 46.5% and 53.6% of our sales, respectively. • Spot products are quality food and non-food products that we offer in addition to our regularly stocked products. These are offered in limited amounts and offer exceptional value. The selection changes every two weeks on average.
Variations in the aggregate amount of our indebtedness from period to period are primarily due to either increases in accrued interest payable on the Promissory Notes which, were payable in U.S. dollars, or to the issuance of the Convertible Notes.
Variations in the aggregate amount of our indebtedness from period to period are primarily due to either increases in accrued interest payable on the Promissory Notes, which were payable in U.S. dollars, or to the issuance of the Convertible Notes, which were repaid in full with the proceeds of our IPO.
Interest on the 2020 Junior Promissory Notes was added to the outstanding principal amount thereof, such that the outstanding principal amount increased by an amount equal to the accrued interest. As of December 31, 2023 and 2022, accrued interest contractually outstanding on the 2020 Junior Promissory Notes was US$407,613 (Ps.6,887 thousand) and US$258,884 (Ps.5,012 thousand).
Interest on the 2020 Junior Promissory Notes was added to the outstanding principal amount thereof, such that the outstanding principal amount increased by an amount equal to the accrued interest. As of December 31, 2023, accrued interest contractually outstanding on the 2020 Junior Promissory Notes was US$407,613 (Ps.6,887 thousand).
For 2022 and 2023, branded products represented 51.8% and 47.5% of our sales, respectively. • Private label products are products that we have developed ourselves and which we believe are of comparable or better quality than the equivalent branded alternative offered at our stores.
For 2023 and 2024, branded products represented 47.5% and 40.6% of our sales, respectively. • Private label products are products that we have developed ourselves and which we believe are of comparable or better quality than the equivalent branded alternative offered at our stores.
The aggregate principal amount and accrued interest outstanding on the Convertible Notes was US$22,494 thousand (Ps.380,002 thousand) as of December 31, 2023 and US$19,465 thousand (Ps.376,878 thousand) as of December 31, 2022. See “—Indebtedness” for additional information. In addition, we have entered into a reverse factoring arrangement with Banco Santander Mexico, S.A.
The aggregate principal amount and accrued interest outstanding on the Convertible Notes was US$22,494 thousand (Ps.380,002 thousand) as of December 31, 2023. See “Indebtedness” for additional information. In addition, we have entered into a reverse factoring arrangement with Banco Santander Mexico, S.A.
Interest on the 2017 Junior Promissory Notes was added to the outstanding principal amount thereof, such that the outstanding principal amount increased by an amount equal to the accrued interest. As of December 31, 2023 and 2022, accrued interest contractually outstanding on the 2017 Junior Promissory Notes was US$7,631,284 (Ps.128,919 thousand) and US$5,767,168 (Ps.111,661 thousand), respectively.
Interest on the 2017 Junior Promissory Notes was added to the outstanding principal amount thereof, such that the outstanding principal amount increased by an amount equal to the accrued interest. As of December 31, 2023 accrued interest contractually outstanding on the 2017 Junior Promissory Notes was US$7,631,284 (Ps.128,919 thousand).
Cost of Sales Cost of sales represents the cost of merchandise that is sold at our, stores including logistics costs incurred in bringing each product to the final point of sale and warehousing costs, as well as depreciation of properties, furniture, equipment and lease-hold improvements, right-of-use assets and shrinkage. 44 Table of Contents Gross Profit Gross profit is equal to revenue from sales of merchandise and sales of recyclables net of cost of sales.
Cost of Sales Cost of sales represents the cost of merchandise that is sold at our, stores including logistics costs incurred in bringing each product to the final point of sale and warehousing costs, as well as depreciation of properties, furniture, equipment and lease-hold improvements, right-of-use assets and shrinkage.
As of December 31, 2023 2022 2021 (thousands of Ps.) Senior Promissory Notes Debt – Related parties Ps. 4,158,458 Ps. 4,098,238 Ps. 3,815,332 Debt – Third parties 20,454 20,158 18,767 Total Ps. 4,178,912 Ps. 4,118,396 Ps. 3,834,099 2017 Junior Promissory Notes Debt – Related parties Ps. 179,245 Ps. 175,114 Ps. 161,591 Debt – Third parties 34,142 33,355 30,779 Total Ps. 213,387 Ps. 208,469 Ps. 192,370 2020 Junior Promissory Notes Debt – Related parties Ps. 2,749 Ps. 2,707 Ps. 2,520 Debt – Third parties 15,118 14,890 13,863 Total Ps. 17,867 Ps. 17,597 Ps. 16,383 Convertible Notes Debt – Third parties Ps. 380,002 Ps. 376,878 Ps. 346,719 Total Ps. 380,002 Ps. 376,878 Ps. 346,719 Promissory Notes and Convertible Notes Prior to our IPO, as part of our financing strategy, we incurred indebtedness pursuant to senior and junior U.S. dollar-denominated pay-in-kind promissory notes and pay-in-kind convertible notes, all of which were repaid in full with the proceeds of our IPO.
As of December 31, 2024 2023 2022 (thousands of Ps.) Senior Promissory Notes Debt – Related parties Ps. — Ps. 4,158,458 Ps. 4,098,238 Debt – Third parties — 20,454 20,158 Total Ps. — Ps. 4,178,912 Ps. 4,118,396 2017 Junior Promissory Notes — Debt – Related parties Ps. — Ps. 179,245 Ps. 175,114 Debt – Third parties — 34,142 33,355 Total Ps. — Ps. 213,387 Ps. 208,469 2020 Junior Promissory Notes Debt – Related parties Ps. — Ps. 2,749 Ps. 2,707 Debt – Third parties — 15,118 14,890 Total Ps. — Ps. 17,867 Ps. 17,597 Convertible Notes — Debt – Third parties Ps. — Ps. 380,002 Ps. 376,878 Total Ps. — Ps. 380,002 Ps. 376,878 Promissory Notes and Convertible Notes Prior to our IPO, as part of our financing strategy, we incurred indebtedness pursuant to senior and junior U.S. dollar-denominated pay-in-kind promissory notes and pay-in-kind convertible notes, all of which were repaid in full with the proceeds of our IPO.
Exchange Rate Fluctuation Exchange rate fluctuation was a gain of Ps.606,270 thousand for the year ended December 31, 2023 as compared to a gain of Ps.264,930 thousand for the year ended December 31, 2022.
Exchange Rate Fluctuation Exchange rate fluctuation was a gain of Ps.490,428 thousand for the year ended December 31, 2024, as compared to a gain of Ps.606,270 thousand for the year ended December 31, 2023.
Loss Before Income Tax For the reasons described above, loss before income tax was Ps.100,905 thousand for the year ended December 31, 2023 as compared to a loss before income tax of Ps.363,747 thousand for the year ended December 31, 2022.
Profit (Loss) Before Income Tax For the reasons described above, profit before income tax was Ps.717,546 thousand for the year ended December 31, 2024 as compared to a loss before income tax of Ps.100,905 thousand for the year ended December 31, 2023.
Net Loss for the Period For the reasons described above, net loss was Ps.306,153 thousand for the year ended December 31, 2023 as compared to a net loss of Ps.565,110 thousand for the year ended December 31, 2022.
Net Profit (Loss) for the Period For the reasons described above, net profit was Ps.334,422 thousand for the year ended December 31, 2024 as compared to a net loss of Ps.306,153 thousand for the year ended December 31, 2023.
See Note 3.8 to our audited consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 for more information about this arrangement. On June 2, 2023, we and HSBC Mexico, S.A.
See Note 14 to our audited consolidated financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 included elsewhere in this annual report, for more information about this arrangement. On June 2, 2023, we and HSBC Mexico, S.A.
Our capital expenditures represented 4.1%, 3.4% and 2.3% of our total revenue in 2023, 2022 and 2021, respectively. Capital expenditures for the years ended December 31, 2023, 2022 and 2021 amounted to Ps.1,798,019 thousand, Ps.1,122,877 thousand and Ps.532,173 thousand, respectively. We expect to fund our capital expenditures program with a combination of cash flows from operations and additional financing.
Capital expenditures for the years ended December 31, 2024, 2023 and 2022 amounted to Ps.2,435,695 thousand, Ps.1,798,019 thousand and Ps.1,122,877 thousand, respectively. We expect to fund our capital expenditures program with a combination of cash flows from operations and additional financing.
For 2022 and 2023, our spot products represented 5.4% and 5.8% of our sales, respectively.
For 2023 and 2024, our spot products represented 5.8% and 5.7% of our sales, respectively.
Our negative working capital for 2023, 2022 and 2021 was Ps.4,558,781 thousand, Ps.3,205,200 thousand and Ps.2,121,704 thousand, respectively. As of December 31, 2023 and 2022, our total current assets amounted to Ps.4,393,160 thousand and Ps.3,599,202 thousand, respectively. We have also used certain amounts of short-term and long-term debt with related parties and third parties to supplement our cash flows.
Our negative working capital for 2024 and 2023 was Ps.2,633,277 thousand and Ps.4,558,781 thousand, respectively. As of December 31, 2024 and 2023, our total current assets amounted to Ps.8,554,139 thousand and Ps.4,393,160 thousand, respectively. We have also used certain amounts of short-term and long-term debt with related parties and third parties to supplement our cash flows.
From 2021 to 2023, our total revenue grew at a CAGR of 38.2%, reaching Ps.44.1 billion (US$2.6 billion) for 2023, and our number of stores increased from 1,249 as of January 1, 2021 to 2,288 as of year-end 2023, which represents a CAGR of 22.4%.
From 2021 to 2024, our total revenue grew at a CAGR of 35.5%, reaching Ps.57.4 billion (US$2.8 billion) for 2024, and our number of stores increased from 1,249 as of January 1, 2021 to 2,772 as of year-end 2024, which represents a CAGR of 22.1%.
(“HSBC”) entered into a reverse factoring transaction (the “HSBC Supplier Finance Agreement”) and a credit facility (the “HSBC Credit Line” and, together with the HSBC Supplier Finance Agreement, the “HSBC Agreement”). The aggregate principal amount financeable under the HSBC Agreement is Ps.450,000 thousand.
(“HSBC”) entered into a reverse factoring transaction (the “HSBC Supplier Finance Agreement”) and a credit facility (the “HSBC Credit Line” and, together with the HSBC Supplier Finance Agreement, the “HSBC Agreement”). The original aggregate principal amount financeable under the HSBC Agreement was Ps.450,000 thousand. This amount was increased to Ps.700,000 thousand on June 20, 2024.
Sales Expenses Sales expenses increased 39.4% to Ps.4,822,912 thousand for the year ended December 31, 2023 from Ps.3,460,840 thousand for the year ended December 31, 2022. Our sales expenses as a percentage of total revenue, were 10.9% and 10.6% for the years ended December 31, 2023 and 2022, respectively.
Sales Expenses Sales expenses increased 26.9% to Ps.6,121,566 thousand for the year ended December 31, 2024 from Ps.4,822,912 thousand for the year ended December 31, 2023. Our sales expenses as a percentage of total revenue decreased to 10.7% from 10.9% for the years ended December 31, 2024 and 2023, respectively.
Cash Flows The following table sets forth certain consolidated cash flow information for the periods indicated: For the Years Ended December 31, 2023 2022 2021 (thousands of Ps.) Net cash flows provided by operating activities Ps. 3,140,349 Ps. 2,116,335 Ps. 1,366,308 Net cash flows used in investing activities (1,778,789 ) (1,111,350 ) (524,080 ) Net cash flows used in financing activities (1,095,692 ) (1,027,115 ) (450,241 ) Increase (decrease) in cash and cash equivalents 265,868 (22,130 ) 391,987 Net foreign exchange difference (30,373 ) 7,066 (1,963 ) Net increase (decrease) in cash and cash equivalents Ps. 235,495 Ps.
Cash Flows The following table sets forth certain consolidated cash flow information for the periods indicated: For the Years Ended December 31, 2024 2023 2022 (thousands of Ps.) Net cash flows provided by operating activities Ps. 3,748,537 Ps. 3,140,349 Ps. 2,116,335 Net cash flows used in investing activities (4,907,296 ) (1,778,789 ) (1,111,350 ) Net cash flows obtained from (used in) financing activities 1,288,113 (1,095,692 ) (1,027,115 ) Increase (decrease) in cash and cash equivalents 129,354 265,868 (22,130 ) Net foreign exchange difference 97,341 (30,373 ) 7,066 Net increase (decrease) in cash and cash equivalents Ps. 226,695 Ps. 235,495 Ps.
(15,064) Ps. 390,024 Net Cash Provided by Operating Activities Net cash provided by operating activities was Ps.3,140,349 thousand, Ps.2,116,335 thousand and Ps.1,366,308 thousand for the years ended December 31, 2023, 2022 and 2021, respectively. Net cash provided by operating activities for the year ended December 31, 2023 increased by Ps.1,024,014 thousand as compared to the year ended December 31, 2022.
(15,064 ) Net Cash Provided by Operating Activities Net cash provided by operating activities was Ps.3,748,537 thousand, Ps.3,140,349 thousand and Ps.2,116,335 thousand for the years ended December 31, 2024, 2023 and 2022, respectively. Net cash from operating activities for the year ended December 31, 2024, increased by Ps.608,188 thousand compared to the year ended December 31, 2023.
As of December 31 31, 2023 and 2022, accrued interest contractually outstanding on the Senior Promissory Notes was US$152,620,740 (Ps.2,578,298 thousand) and US$117,963,235 (Ps.2,283,945 thousand), respectively.
As of December 31, 2023, accrued interest contractually outstanding on the Senior Promissory Notes was 53 Table of Contents US$152,620,740 (Ps.2,578,298 thousand).
These events may also increase the costs of insurance if they result in significant loss of property or other insurable damage by us or in the market more generally.In this case, As a result of the impact of Hurricane Otis, the Company recognized Ps.42,422 in impairment losses as other expenses for the year ended December 31, 2023 due to damages to properties, furniture, equipment, and lease-hold improvements resulting from the hurricane and related events.
In this case, as a result of the impact of Hurricane Otis, the Company recognized Ps.42,422 in impairment losses as other expenses for the year ended December 31, 2023 due to damages to properties, furniture, equipment, and lease-hold improvements resulting from the hurricane and related events.
Administrative Expenses Administrative expenses generally consist of expenses relating to headquarters, regional offices and the back office, including wages and salaries of administrative employees, depreciation, and amortization, energy, social security contributions of administrative employees, payments relating to options granted under our share-based compensation plan, administrative services, advertising expenses, corporate services, maintenance and conservation expenses and professional fees.
Administrative Expenses Administrative expenses generally consist of expenses relating to headquarters, regional offices and the back office, including wages and salaries of administrative employees, depreciation, and amortization, energy, social security contributions of administrative employees, payments relating to options granted under our share-based compensation plan, administrative services, advertising expenses, corporate services, maintenance and conservation expenses and professional fees. 45 Table of Contents Other Income—Net Other income includes a variety of income streams, including revenues from asset disposals, reimbursement of costs, and insurance proceeds, among others.
We believe that our existing cash and cash equivalents and the liquidity provided from other sources of funds (including the proceeds to us from our IPO) will be sufficient to meet our anticipated cash needs for at least the next 12 months, considering our expected organic growth.
We believe that our existing cash and cash equivalents and the liquidity provided from other sources of funds will be sufficient to meet our anticipated cash needs for at least the next 12 months, considering our expected organic growth. Our future capital requirements and the adequacy of available funds will depend on many factors, including those described under “Item 3.
Our cost of sales as a percentage of total revenue was 84.0% and 84.9% for the years ended December 31, 2023 and 2022, respectively. 46 Table of Contents Gross Profit Gross profit increased 42.9% to Ps.7,039,917 thousand for the year ended December 31, 2023 from Ps.4,924,754 thousand for the year ended December 31, 2022, and our gross profit margin, calculated as gross profit as a percentage of total revenue, was 16.0% and 15.1% for the years ended December 31, 2023 and 2022, respectively.
Gross Profit Gross profit increased 33.2% to Ps.9,376,106 thousand for the year ended December 31, 2024 from Ps.7,039,917 thousand for the year ended December 31, 2023, and our gross profit margin, calculated as gross profit 47 Table of Contents as a percentage of total revenue, was 16.3% and 16.0% for the years ended December 31, 2024 and 2023, respectively.
The aggregate principal amount and accrued interest outstanding on the Promissory Notes was US$261,057 thousand (Ps.4,410,166 thousand) as of December 31, 2023 and US$224,387 thousand (Ps.4,344,461 thousand) as of December 31, 2022. We also issued Convertible Notes.
The aggregate principal amount and accrued interest outstanding on the Promissory Notes was US$261,057 thousand (Ps.4,410,166 thousand) as of December 31, 2023. We also issued Convertible Notes which were repaid in full in 2024 with the proceeds of our IPO.
The aggregate principal amount and all accrued interest on the Convertible Notes was payable on the maturity date. The Convertible Notes were guaranteed by the Guarantors pursuant to a guarantee agreement dated November 20, 2020.
The aggregate principal amount and all accrued interest on the Convertible Notes was payable on the maturity date. The Convertible Notes were guaranteed by the Guarantors pursuant to a guarantee agreement dated November 20, 2020. As of December 31, 2023, the contractual amounts payable under the Convertible Notes were US$22,830,216 (Ps.385,682 thousand).
Financial Costs—Net For the reasons described above, financial costs – net increased 1.2% to Ps.894,768 thousand for the year ended December 31, 2023 from Ps.884,016 thousand for the year ended December 31, 2022.
Financial Costs-Net For the reasons described above, financial costs – net decreased 31.7% to Ps.610,963 thousand for the year ended December 31, 2024 from Ps.894,768 thousand for the year ended December 31, 2023.
Net cash used in investing activities was Ps.1,778,789 thousand, Ps.1,111,350 thousand and Ps.524,080 thousand for the years ended December 31, 2023, 2022 and 2021, respectively. 52 Table of Contents Net cash used in investing activities increased by Ps.667,439 thousand for the year ended December 31, 2023 as compared to the year ended December 31, 2022, mainly as we expanded our store count by 396 net new store openings and three new distribution centers, one if which opened during 2023 and the other two opened in the first quarter of 2024, leading to increased purchases of property and equipment and of cold rooms.
Net cash used in investing activities was Ps.4,907,296 thousand, Ps.1,778,789 thousand and Ps.1,111,350 thousand for the years ended December 31, 2024, 2023 and 2022, respectively. 51 Table of Contents Net cash used in investing activities increased by Ps.3,128,507 thousand for the year ended December 31, 2024 as compared to the year ended December 31, 2023, mainly as we increased our store count by 484 net new stores between January 1, 2024 and December 31, 2024 and added two new distribution centers, leading to increased purchases of property and equipment and of cold rooms.
Other Income—Net Other income includes a variety of income streams, including from non-recurring sources, such as dispositions of assets, subleases and royalties. Operating Profit Operating profit is equal to gross profit net of sales expenses, administrative expenses, plus other income—net. Financial Income Financial income is comprised of interest generated on accounts or investments held by us.
Operating Profit Operating profit is equal to gross profit net of sales expenses, administrative expenses, plus other income—net. Financial Income Financial income is comprised of interest generated on accounts or investments held by us.
Additionally, we have historically incurred limited amounts of third-party financing for our operations, which has been limited to supplier financing lines and financial leases of transportation and certain store equipment. 53 Table of Contents The table below sets forth selected information regarding our outstanding indebtedness corresponding to the Promissory Notes and the Convertible Notes as of December 31, 2023, 2022 and 2021.
Additionally, we have historically incurred limited amounts of third-party 52 Table of Contents financing for our operations, which has been limited to supplier financing lines and financial leases of transportation and certain store equipment.
In addition, under the terms of the HSBC Agreement, the Company must comply with certain covenants, including restrictions on dividends. 51 Table of Contents Additionally, pursuant to the terms of the HSBC Agreement, we have created a trust, which is meant to be a source of payment in the case of a payment default, into which Ps.540,000 thousand of cash flows have to be deposited each month and are released so long as no payment default occurs.
Additionally, pursuant to the terms of the HSBC Agreement, we have created a trust, which is meant to be an alternative source of payment in the case of a payment default, into which Ps.540,000 thousand of cash flows have to be deposited (as a pass-through) on the trust each month.
Our administrative expenses, as a percentage of total revenue, were 3.1% and 2.9% for the years ended December 31, 2023 and 2022, respectively.
Administrative Expenses Administrative expenses increased 43.3% to Ps.1,987,075 thousand for the year ended December 31, 2024 from Ps.1,386,929 thousand for the year ended December 31, 2023. Our administrative expenses, as a percentage of total revenue, were 3.5% and 3.1% for the years ended December 31, 2024 and 2023, respectively.
Expenses recognized in respect of grants under our share-based compensation plan during the years ended December 31, 2023 and 2022 were Ps.384,566 thousand and Ps.303,789 thousand, respectively.
Expenses recognized in respect of grants under our share-based compensation plan during the years ended December 31, 2024 and 2023 were Ps.523,143 thousand and Ps.384,566 thousand, respectively. Other Income (Expense)-Net Other income–net for the year ended December 31, 2024 was Ps.61,044 thousand, as compared to other expense-net of Ps.36,213 thousand for the year ended December 31, 2023.
As of December 31, 2023 and 2022, our long-term debt with third parties consisted of Ps.577,318 thousand and Ps.540,734 thousand, respectively. In addition to financing from third parties, we issued several senior and junior U.S. dollar-denominated pay-in-kind Promissory Notes that mature on December 31, 2026, most of which are held by related parties, including some of our shareholders.
In addition to financing from third parties, we issued several series of senior and junior U.S. dollar-denominated pay-in-kind Promissory Notes would have matured on December 31, 2026, most of which were held by related parties, including some of our shareholders, and which were repaid in full in 2024 with the proceeds of our IPO.
The aggregate limit of amounts invoiced under this arrangement was Ps.350,000 thousand; however, on December 4, 2023, the Company increased the aggregate limit to Ps.500,000 thousand.
The aggregate limit of amounts invoiced under this arrangement was Ps.350,000 thousand; however, on December 4, 2023, the Company increased the aggregate limit to Ps.500,000 thousand. Pursuant to the terms of this arrangement, we have created a trust, which is meant to be an alternative source of payment in the case of a payment default.
The decrease was mainly driven by a decrease in the cardboard price per ton, offset by an increase in higher sales. Cost of Sales Cost of sales increased 33.9% to Ps.37,038,542 thousand for the year ended December 31, 2023 from Ps.27,655,643 thousand for the year ended December 31, 2022.
Same Store Sales for the year ended December 31, 2024 increased 13.4%. Sales of Recyclables Sales of recyclables increased 16.6% to Ps.105,692 thousand for the year ended December 31, 2024 from Ps.90,656 thousand for the year ended December 31, 2023. The increase was mainly driven by an increase in sales, offset by a decrease in the cardboard price per ton.
Of the total increase in revenue from sales of merchandise, 18.9% was attributable to sales from 396 net new stores opened in 2023, while 57.2% of the increase was attributable to increases in sales volume and 23.9% of the increase was attributable to higher prices due to inflation and shifts in the product mix.
Of the total increase in revenue from sales of merchandise, 24.0% was attributable to sales from 484 net new stores opened over the course of the year, while 91.3% of the increase was attributable to increases in sales volume and a 15.3% reduction was attributable to lower prices due to shifts in the product mix.
For the year ended December 31, 2024, we have budgeted capital expenditures of approximately Ps.2,425 thousand, including approximately Ps.1,651 thousand for opening new stores and the remodeling expenses for the reopening of our stores in Acapulco that were damaged by Hurricane Otis on October, 2023 and approximately Ps.104 thousand for opening of new distribution centers, which will be funded through our operating activities.
For the year ending December 31, 2025, we have budgeted capital expenditures of approximately Ps.3,650,000 thousand, including approximately Ps.2,550,000 thousand for opening new stores and approximately Ps.360,000 thousand for opening four new distribution centers, which will be funded through our operating activities. Our capital expenditures represented 4.2%, 4.1% and 3.4% of our total revenue in 2024, 2023 and 2022, respectively.
Pursuant to the terms of this arrangement, we have created a trust, which is meant to be a source of payment in the case of a payment default, into which cash flows coming from 419 stores in a minimum aggregate amount of Ps.300,000 thousand are deposited and released so long as no payment default occurs.
Cash flows from 419 stores are deposited in a bi-weekly minimum aggregate amount of Ps.300,000 thousand in the trust account as a pass-through and released to our treasury on a daily basis, as long as no payment default occurs.
There are no commissions or interests payable to HSBC when invoices are discounted, and only an opening commission of Ps.2,250 thousand was paid for entering into the agreement, however, we receive a commission from HSBC for each factoring transaction and we must pay penalties in case of late payment.
There are no commissions or interests payable to HSBC when invoices are discounted, and only an opening commission of Ps.2,250 thousand was paid for entering into the 50 Table of Contents original agreement. In addition, under the terms of the HSBC Agreement, the Company must comply with certain covenants, including restrictions on dividends.
Net cash used in financing activities was Ps.1,095,692 thousand, Ps.1,027,115 thousand and Ps.450,241 thousand for the years ended December 31, 2023, 2022 and 2021, respectively.
Transactions with non-controlling interest shareholders are also classified as cash flows from financing activities. Net cash obtained from financing activities was Ps.1,288,113 thousand for the year ended December 31, 2024, compared to net cash used in financing activities of Ps.1,095,692 thousand and Ps.1,027,115 thousand for the years ended December 31, 2023 and 2022, respectively.
As a result of our becoming a public company, we need to comply with new laws, regulations and requirements that we did not need to comply with as a private company, including provisions of the Sarbanes-Oxley Act, other applicable SEC regulations and the requirements of the New York Stock Exchange.
We used the net proceeds of our IPO for the repayment of all amounts outstanding under the Promissory Notes and the Convertible Notes, and we intend to use the remainder of the net proceeds from our IPO for general corporate purposes. 44 Table of Contents Since our IPO, we have been required to comply with new laws, regulations and requirements that we did not need to comply with as a private company, including provisions of the Sarbanes-Oxley Act, other applicable SEC regulations and the requirements of the New York Stock Exchange.
This increase was primarily driven by Ps.619,779 thousand and Ps.615,592 thousand in accrued interest on the Promissory Notes and Convertible Notes (which were repaid in full with the proceeds of our IPO) during the year ended December 31, 2023 and 2022, respectively, as 47 Table of Contents well as the increased interest expense generated by increased lease liabilities, due to new lease agreements for our expanding store base of Ps.762,872 thousand and Ps.507,875 thousand, during the year ended December 31, 2023 and 2022, respectively.
This decrease was primarily driven by the decreased interest expense related to the Promissory Notes and the Convertible Notes, which were repaid in February 2024, using a portion of the primary proceeds from our IPO, offset by an increase in the lease payments in connection with incremental lease agreements for our expanding store base of Ps.1,072,774 thousand and Ps.762,872 thousand, during the years ended December 31, 2024 and 2023, respectively.
The increase was attributable mainly to an increase in sales in existing stores and new stores and was proportional to the increase in revenue from sales of merchandise.
Cost of Sales Cost of sales increased 29.8% to Ps.48,062,913 thousand for the year ended December 31, 2024 from Ps.37,038,542 thousand for the year ended December 31, 2023. The increase was attributable mainly to an increase in sales in existing stores and new stores and was proportional to the increase in revenue from sales of merchandise.
Income Tax Expense Income tax expense increased 1.9% to Ps.205,248 thousand for the year ended December 31, 2023 from Ps.201,363 thousand for the year ended December 31, 2022.
Financial Income Financial income increased 497.9% to Ps.155,863 thousand for the year ended December 31, 2024 from Ps.26,069 thousand for the year ended December 31, 2023.
Net cash used in financing activities increased by Ps.576,874 thousand for the year ended December 31, 2022 as compared to the year ended December 31, 2021, mainly driven by an increase of lease payments due to 392 net new store openings and the opening of three distribution centers, offset by an increase in transactions under our reverse factoring arrangement with Santander.
Net cash obtained from financing activities varied by Ps.2,383,805 thousand for the year ended December 31, 2024 as compared to net cash used in financing activities for the year ended December 31, 2023, mainly driven by the proceeds received from our IPO, partially offset by the repayment of all amounts outstanding under the Promissory Notes and the Convertible Notes, and the increase of lease payments due to our 484 net new store openings between January 1, 2023 and December 31, 2024 and the opening of two new distribution centers.
As of December 31, 2023 and 2022, the contractual amounts payable under the Convertible Notes were US$22,830,216 (Ps.385,682 thousand) and US$19,857,885 (Ps.384,478 thousand), respectively. 55 Table of Contents Starting on May 25, 2025, and until the maturity date, the Convertible Notes were convertible into Class A common shares of the Company, at the option of the holder.
Starting on May 25, 2025, and until the maturity date, the Convertible Notes were convertible into Class A common shares of the Company, at the option of the holder.
This change was driven by the significant appreciation of the Mexican peso against the U.S. dollar during the year ended December 31, 2023, which, in turn, impacted the carrying value of the Promissory Notes and the Convertible Notes, which are denominated in U.S. dollars.
This change was primarily driven by the significant devaluation of the U.S. dollar against the Mexican peso during the year ended December 31, 2023, at which time we had a net exposure to U.S. dollar-denominated debt, resulting in a significant exchange rate fluctuation gain.
The increase in sales expenses remained proportional to the increase in revenue from sales of merchandise and largely derived from the increase in the number of stores, as headcount expanded to operate new stores, plus the impact of wage inflation on labor costs. Administrative Expenses Administrative expenses increased 52.6% to Ps.952,090 thousand for 2022 from Ps.623,874 thousand for 2021.
The increase in sales expenses remained proportional to the increase in revenue from sales of merchandise and largely derived from the opening of new stores, an increase in headcount required to operate new stores, and to the effects of wage inflation.
The increase in administrative expenses was principally due to option (i) grants under our share-based compensation plan, (ii) expenses incurred to meet our public company obligations, (iii) expenses related to expansion of operations to new regions during the year ended December 31, 2023 and (iv) other non-recurring expenses, principally relating to our IPO.
The increase in administrative expenses was principally due to (i) the hiring of additional headquarters personnel to support growth, (ii) public company readiness, reporting and compliance expenses, (iii) expansion of regional operations as we opened new regions, and (iv) non-recurring fees and expenses, mainly related to our IPO.
Exchange rate fluctuations are primarily driven by changes in the carrying value of amounts payable under the Promissory Notes and the Convertible Notes, which were payable at maturity in U.S. dollars, but were repaid in full with the proceeds of our IPO. 45 Table of Contents Historical Results of Operations For the Year Ended December 31, 2023 compared to the Year Ended December 31, 2022 For the year ended December 31, 2023 2022 Variation (%) (thousands of Ps.) Revenue from sales of merchandise Ps. 43,987,803 Ps. 32,472,577 35.5 % Sales of recyclables 90,656 107,820 (15.9 )% Total revenue 44,078,459 32,580,397 35.3 % Cost of sales (37,038,542 ) (27,655,643 ) 33.9 % Gross profit 7,039,917 4,924,754 42.9 % Sales expenses (4,822,912 ) (3,460,840 ) 39.4 % Administrative expenses (1,386,929 ) (952,090 ) 45.7 % Other (expense) income – net (36,213 ) 8,445 (528.8 )% Operating profit 793,863 520,269 52.6 % Financial income 26,069 19,840 31.4 % Financial costs (1,527,107 ) (1,168,786 ) 30.7 % Exchange rate fluctuation 606,270 264,930 128.8 % Financial costs – net (894,768 ) (884,016 ) 1.2 % Loss before income tax (100,905 ) (363,747 ) (72.3 )% Income tax expense (205,248 ) (201,363 ) 1.9 % Net loss for the period Ps.
Additionally, after our IPO, we keep U.S. dollars deriving from the IPO proceeds on our balance sheet, which also contributes to the exposure to exchange rate fluctuations. 46 Table of Contents Historical Results of Operations For the Year Ended December 31, 2024 compared to the Year Ended December 31, 2023 For the year ended December 31, 2024 2023 Variation (%) (thousands of Ps.) Revenue from sales of merchandise Ps. 57,333,327 Ps. 43,987,803 30.3 % Sales of recyclables 105,692 90,656 16.6 % Total revenue 57,439,019 44,078,459 30.3 % Cost of sales (48,062,913 ) (37,038,542 ) 29.8 % Gross profit 9,376,106 7,039,917 33.2 % Sales expenses (6,121,566 ) (4,822,912 ) 26.9 % Administrative expenses (1,987,075 ) (1,386,929 ) 43.3 % Other income (expense) – net 61,044 (36,213 ) (268.6 )% Operating profit 1,328,509 793,863 67.3 % Financial income 155,863 26,069 497.9 % Financial costs (1,257,254 ) (1,527,107 ) (17.7 )% Exchange rate fluctuation 490,428 606,270 (19.1 )% Financial costs – net (610,963 ) (894,768 ) (31.7 )% Profit (loss) before income tax 717,546 (100,905 ) (811.1 )% Income tax expense (383,124 ) (205,248 ) 86.7 % Consolidated net profit (loss) for the year Ps. 334,422 (306,153 ) (209.2 )% Revenue from Sales of Merchandise Revenue from sales of merchandise increased 30.3% to Ps.57,333,327 thousand for the year ended December 31, 2024 from Ps.43,987,803 thousand for the year ended December 31, 2023.
Our operating profit, as a percentage of total revenue, were 1.8% and 1.6% for the years ended December 31, 2023 and 2022, respectively. Financial Income Financial income increased 31.4% to Ps.26,069 thousand for the year ended December 31, 2023 from Ps.19,840 thousand for the year ended December 31, 2022.
As a percentage of total revenue, other income (expense)–net remained flat at 0.1% in 2024 compared to 2023. Operating Profit Operating profit increased 67.3% to Ps.1,328,509 thousand for the year ended December 31, 2024 from Ps.793,863 thousand for the year ended December 31, 2023, representing 2.3% and 1.8% of total revenue for each year.
Net Cash Used in Financing Activities Net cash used in financing activities generally consists of transactions related to our short-term and long-term debt and financing obligations. Transactions with non-controlling interest shareholders are also classified as cash flows from financing activities.
Liquidity and Capital Resources” in our annual report on Form 20-F for the fiscal year ended December 31, 2023, which was filed with the SEC on April 30, 2024. Net Cash Obtained from (Used in) Financing Activities Net cash used in financing activities generally consists of transactions related to our short-term and long-term debt and financing obligations.
See Notes 13 and 14 to our consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 for further information.
Since our IPO, the Mexican peso has depreciated against the U.S. dollar, contributing to a positive exchange rate fluctuation; however, the positive impact in 2024 was lower compared to the gain recorded in 2023. See Notes 13 and 14 to our financial statements as of December 31, 2024 for further information.
This change was due to an increase in taxable profits in our subsidiaries, on which an increase in the annual income tax expense is expected to be recognized for the full financial year.
Income Tax Expense Income tax expense increased 86.7% to Ps.383,124 thousand for the year ended December 31, 2024 from Ps.205,248 thousand for the year ended December 31, 2023. This change was due to an increase in taxable profits in our subsidiaries, which led to a higher annual effective tax rate that was partially offset by increased expenditures and tax benefits.
The increase was primarily attributable to a higher interest gain on short-term investments and an increase in the gain on commissions from supplier finance arrangement. Financial Costs Financial costs increased 30.7% to Ps.1,527,107 thousand for the year ended December 31, 2023 from Ps.1,168,786 thousand for the year ended December 31, 2022.
The increase was primarily due to interest income earned from investing the net proceeds received from our IPO. 48 Table of Contents Financial Costs Financial costs decreased 17.7% to Ps.1,257,254 thousand for the year ended December 31, 2024 from Ps.1,527,107 thousand for the year ended December 31, 2023.
Removed
We used the net proceeds of our IPO for the repayment of all amounts outstanding under the Promissory Notes and the Convertible Notes, and we intend to use the remainder of the net proceeds from our IPO for the repayment of other indebtedness and for general corporate purposes.
Added
Gross Profit Gross profit is equal to revenue from sales of merchandise and sales of recyclables net of cost of sales.
Removed
(306,153 ) (565,110 ) (45.8 )% Revenue from Sales of Merchandise Revenue from sales of merchandise increased 35.5% to Ps.43,987,803 thousand for the year ended December 31, 2023 from Ps.32,472,577 thousand for the year ended December 31, 2022.
Added
Exchange rate fluctuations are primarily driven by changes in the carrying value of amounts payable under the Promissory Notes and the Convertible Notes, which were payable at maturity in U.S. dollars, but were repaid in full in 2024 with the proceeds of our IPO.
Removed
Same Store Sales for the year ended December 31, 2023 increased 17.6%. Sales of Recyclables Sales of recyclables decreased 15.9% to Ps.90,656 thousand for the year ended December 31, 2023 from Ps.107,820 thousand for the year ended December 31, 2022.
Added
Our cost of sales as a percentage of total revenue was 83.7% and 84.0% for the years ended December 31, 2024 and 2023, respectively.
Removed
However, this increase was partially offset by better negotiations with suppliers resulting in a lower increase relative to the growth of revenue from sales of merchandise growth in the year ended December 31, 2022.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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He was a founding principal at Penske Capital Partners, a private equity firm in New York and also served as president of Leland Corporation, a private investor venture fund. Mr. Fuster was also a consultant at McKinsey & Company and an accountant at PricewaterhouseCoopers.
He was a founding principal at Penske Capital Partners, a private equity firm in New York and also served as president of Leland Corporation, a private investor venture fund. Mr. Fuster was also a consultant at McKinsey & Company and an accountant and consultant for PricewaterhouseCoopers.
The Audit Committee is responsible for, among other things: • the appointment, compensation, retention and oversight of any auditor or accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services; • pre-approving the audit services and non-audit services to be provided by our independent auditor before the auditor is engaged to render such services; • reviewing and discussing with the independent auditor its responsibilities under generally accepted auditing standards, the planned scope and timing of the independent auditor’s annual audit plan(s) and significant findings from the audit; • obtaining and reviewing a report from the independent auditor describing all relationships between the independent auditor and the Company consistent with the applicable PCAOB requirements regarding the independent auditor’s communications with the Audit Committee concerning independence; • confirming and evaluating the rotation of the audit partners on the audit engagement team as required by law; • reviewing with management, in separate meetings whenever the Audit Committee deems appropriate, any analyses or other written communications prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative IFRS methods on the financial statements, and other critical accounting policies and practices of the Company; • reviewing, in conjunction with the Chief Executive Officer and Chief Financial Officer and Investor Relations Officer of the Company, the Company’s disclosure controls and procedures and internal control over financial reporting; • establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; and • approving or ratifying any related party transaction (as defined in our related party transaction policy) in accordance with our related party transaction policy.
The Audit Committee is responsible for, among other things: • the appointment, compensation, retention and oversight of any auditor or accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services; • pre-approving the audit services and non-audit services to be provided by our independent auditor before the auditor is engaged to render such services; 65 Table of Contents • reviewing and discussing with the independent auditor its responsibilities under generally accepted auditing standards, the planned scope and timing of the independent auditor’s annual audit plan(s) and significant findings from the audit; • obtaining and reviewing a report from the independent auditor describing all relationships between the independent auditor and the Company consistent with the applicable Public Company Accounting Oversight Board ("PCAOB") requirements regarding the independent auditor’s communications with the Audit Committee concerning independence; • confirming and evaluating the rotation of the audit partners on the audit engagement team as required by law; • reviewing with management, in separate meetings whenever the Audit Committee deems appropriate, any analyses or other written communications prepared by management and/or the independent auditor setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative IFRS methods on the financial statements, and other critical accounting policies and practices of the Company; • reviewing, in conjunction with the Chief Executive Officer and Chief Financial Officer and Investor Relations Officer of the Company, the Company’s disclosure controls and procedures and internal control over financial reporting; • establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters; and • approving or ratifying any related party transaction (as defined in our related party transaction policy) in accordance with our related party transaction policy.
Share numbers presented in this section were calculated after giving effect to a 3-for-1 share split carried out in connection with our IPO. The maximum number of Class C common shares that may be issued under 2004 Option Plan is 45,000,000 Class C common shares, subject to adjustment in accordance with the terms of the 2004 Option Plan.
Share numbers presented in this section were calculated after giving effect to a 3-for-1 share split carried out in connection with our IPO. The maximum number of Class C common shares that may be issued under the 2004 Option Plan was 45,000,000 Class C common shares, subject to adjustment in accordance with the terms of the 2004 Option Plan.
DIRECTORS AN D SENIOR MANAGEMENT 57 Table of Contents Board of Directors Our memorandum and articles of association provide that the board of directors will be composed of a minimum of seven directors and a maximum of 15 directors, with the number of board seats being exclusively determined by a resolution of directors (and, for the avoidance of doubt, the size of the board of directors may not be changed by the shareholders of the Company at any time (whether by resolution of members, special resolution of members or otherwise)).
DIRECTORS AN D SENIOR MANAGEMENT Board of Directors Our memorandum and articles of association provide that the board of directors will be composed of a minimum of seven directors and a maximum of 15 directors, with the number of board seats being exclusively determined by a resolution of directors (and, for the avoidance of doubt, the size of the board of directors may not be changed by the shareholders of the Company at any time (whether by resolution of members, special resolution of members or otherwise)).
Audit Committee The Audit Committee is comprised of Ms. Reich, who is the chair, and Messrs. Gertsacov, Fuster and Cappello. The Audit Committee is governed by a charter that complies with the New York Stock Exchange rules and is available on our investor relations website at https://www.investorstiendas3b.com/.
Audit Committee The Audit Committee is comprised of Ms. Reich, who serves as chair, and Messrs. Fuster and Cappello. The Audit Committee is governed by a charter that complies with the New York Stock Exchange rules and is available on our investor relations website at https://www.investorstiendas3b.com/.
During 2023, we promoted 4,277 of our employees, reflecting our commitment to career development and growth within our organization. We recognize that our employees’ well-being is paramount to their professional success. To further our commitment, we have a toll-free telephone line handled by health professionals who provide psychological, nutritional, and medical advice to our employees.
During 2024, we promoted 4,970 of our employees, reflecting our commitment to career development and growth within our organization. We recognize that our employees’ well-being is paramount to their professional success. To further our commitment, we have a toll-free telephone line handled by health professionals who provide psychological, nutritional, and medical advice to our employees.
Integral to our corporate culture is the value we place on open communication. We believe in empowering our employees and that they should have voice in company matters. For example, all employees have access to a platform with direct access to our Chief Executive Officer, all improvement proposals are heard and responded to 67 Table of Contents through this platform.
Integral to our corporate culture is the value we place on open communication. We believe in empowering our employees and that they should have voice in company matters. For example, all employees have access to a platform with direct access to our Chief Executive Officer, all improvement proposals are heard and responded to through this platform.
Hatoum, Cappello and Meffre, and their terms will expire at the annual general meeting of the shareholders expected to be held no later than April 2026; and • the initial Class III directors are Ms. Reich and Messrs.
Hatoum, Cappello and Meffre; their terms will expire at the annual general meeting of the shareholders expected to be held no later than April 2026; and • the initial Class III directors are Ms. Reich and Messrs. Fuster and Khouri; their terms will expire at the annual general meeting of shareholders expected to be held no later than April 2027.
Since the Class C common shares are subject to restrictions on sale for a period of 180 days after the date of the prospectus relating to our IPO, as well as additional restrictions for a further 24 months following such 180-day period, our board has determined that any vested Stock Options issued under the 2004 Option Plan cannot be exercised until the earliest to occur of (1) the conversion of Class C common shares pursuant to the initial exercise of registration rights under our memorandum and articles of association, (2) July 8, 2026, (3) upon and in connection with any business combination or offer to acquire the Company that would represent a change in control of the Company, which will result in the automatic acceleration of all vested options, and (4) the conversion of Class C common shares into Class A common shares upon the affirmative vote of holders representing at least 75% of the votes of the Class B common shares and Class C common shares voting as a single class (provided that such conversion does not take place within 18 months of the date of the prospectus relating to our IPO). 63 Table of Contents Liquidity Event Bonus Plan Our board of directors has adopted a bonus plan (the “Liquidity Event Bonus Plan”) in which direct reports of the Chief Executive Officer of the Company and Mr.
Since the Class C common shares were subject to restrictions on sale for a period of 180 days after the date of the prospectus relating to our IPO, and are subject to additional restrictions for a further 24 months following such 180-day period, our board determined that any vested Stock Options issued under the 2004 Option Plan cannot be exercised until the earliest to occur of (1) the conversion of Class C common shares pursuant to the initial exercise of registration rights under our memorandum and articles of association, (2) July 8, 2026, (3) upon and in connection with any business combination or offer to acquire the Company that would represent a change in control of the Company, which will result in the automatic acceleration of all vested options, and (4) the conversion of Class C common shares into Class A common shares upon the affirmative vote of holders representing at least 75% of the votes of the Class B common shares and Class C common shares voting as a single class (provided that such conversion does not take place within 18 months of the date of the prospectus relating to our IPO).
No additional Stock Options will be granted under the 2004 Option Plan after our IPO.
No additional Stock Options have been or will be granted under the 2004 Option Plan after our IPO.
In addition, although not required under the laws of the British Virgin Islands, our memorandum and articles of association establish a Compensation 65 Table of Contents Committee. The board of directors may dissolve and appoint at any time any committee. At least one meeting shall be held by each committee on a quarterly basis.
In addition, although not required under the laws of the British Virgin Islands, our memorandum and articles of association establish a Compensation Committee and during 2024 approved the creation of an ESG committee. The board of directors may dissolve and appoint at any time any committee. At least one meeting shall be held by each committee on a quarterly basis.
Martinez, and their terms will expire at the annual general meeting of shareholders expected to be held no later than April 2025; • the initial Class II directors are Messrs.
Bakker Lee) at the annual general meeting of the shareholders held on April 29, 2025; their terms will expire at the annual general meeting of the shareholders expected to be held no later than April 2028; • the initial Class II directors are Messrs.
Khouri is the chief executive officer and a board member of United Investors Holding SAL, a Beirut-based group of distribution companies, that retail and distribute brands such as Nike, Converse and Levi’s.
Sami Khouri has been a director of the Company since 2004. Mr. Khouri is the chief executive officer and a board member of United Investors Holding SAL, a Beirut-based group of distribution companies, that retail and distribute brands such as Nike, Converse and Levi’s.
Fuster is currently a private investor and heads a family office based in Miami, Florida. Prior to his current role, Mr. Fuster co-founded and led a series of privately-held healthcare investments in managed care, and medical services provider networks with an integrated pharmacy delivery system in Florida.
Prior to his current role, Mr. Fuster co-founded and led a series of privately-held healthcare investments in managed care, and medical services provider networks with an integrated pharmacy delivery system in Florida.
This initiative has led to the promotion of over 67 employees to managerial positions between 2021 and 2023. We champion career growth with a hands-on evaluation program, designed to propel employees’ career trajectories within the company. A key initiative of our training and employee development is our performance review process.
This initiative has led to the promotion of at least 42 employees to managerial positions between January 1, 2023 and December 31, 2024. We champion career growth with a hands-on evaluation program, designed to propel employees’ career trajectories within the company. A key initiative of our training and employee development is our performance review process.
Proposals that we believe may add value to the business are analyzed in detail and implemented. E. SHAR E OWNERSHIP The shares and any outstanding options beneficially owned by our directors and officers and/or entities affiliated with these individuals are disclosed in “Item 7–A. Major Shareholders.” F. DISC LOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION Not applicable.
Proposals that we believe may add value to the business are analyzed in detail and implemented. E. SHAR E OWNERSHIP The shares and any outstanding options beneficially owned by our directors and officers and/or entities affiliated with these individuals are disclosed in “Item 7–A. Major Shareholders.” 67 Table of Contents F.
Reich holds a Bachelor’s Degree in Computer Science from the Instituto Tecnológico de Estudios Superiores de Monterrey and an MBA from the Instituto Tecnológico Autónomo de México (ITAM) with postgraduate studies at the Kellogg School of Business at Northwestern University. Dan Gertsacov. Dan Gertsacov has been a director of the Company since 2023. Mr.
Reich holds a Bachelor’s Degree in Computer Science from the Instituto Tecnológico de Estudios Superiores de Monterrey and an MBA from the Instituto Tecnológico Autónomo de México (ITAM) with postgraduate studies at the Kellogg School of Business at Northwestern University. Dennis Stevens.
Equity Incentive Plan Our board of directors has adopted, and our shareholders have approved, an equity incentive plan (the “Equity Incentive Plan”) prior to the completion of our IPO, in order to provide a means through which to attract, retain and motivate key personnel.
Major Shareholders” for the fully diluted share ownership of Bolton Partners Ltd. 2024 Equity Incentive Plan Our board of directors has adopted, and our shareholders have approved, an equity incentive plan (the “Equity Incentive Plan”) prior to the completion of our IPO, in order to provide a means through which to attract, retain and motivate key personnel.
Meffre was also actively involved in client relationship, fundraising and new products development. From 2003 to 2007, he worked at Proparco (a French Development Financial Institution) where he co-founded the Private Equity team, focusing on emerging markets (direct investments, private equity fund investments and co-investments). Mr.
From 2003 to 2007, he worked at Proparco (a French Development Financial Institution) where he co-founded the Private Equity team, focusing on emerging markets (direct investments, private equity fund investments and co-investments). Mr.
The table below sets forth the grants per year (net of forfeitures) and the weighted average strike prices of the Common Options (considering the 3-for-1 share split effected in connection with our IPO).
The table below sets forth the number of Class C common shares issuable upon the exercise of Common Options granted per year (net of forfeitures) and the weighted average strike prices of the Class C common shares subject to Common Options (considering the 3-for-1 share split effected in connection with our IPO).
Cuauhtémoc, Mexico City, Mexico 06500. The following sets forth biographical information for each of our key executives: K. Anthony Hatoum . See “—Board of Directors.” Eduardo Pizzuto. Eduardo Pizzuto is the Chief Financial Officer and Investor Relations Officer of the Company. Mr.
Presidente Masaryk 8, Polanco V Sección, Miguel Hidalgo, Mexico City, Mexico 11560. The following sets forth biographical information for each of our key executives: K. Anthony Hatoum . See “—Board of Directors.” Eduardo Pizzuto. Eduardo Pizzuto is the Chief Financial Officer and Investor Relations Officer of the Company. Mr.
Khouri serves as a director of Endeavor, global organization that supports high-impact entrepreneurs in emerging markets, The Lebanese Center for Palliative Care/BALSAM and Ruwwad Al Tanmeya in Lebanon, which is focused on the empowerment of marginalized societies through scholarships for education. He holds a degree in Economics from the American University of Beirut. Alexis Meffre.
Khouri serves as a director of Endeavor, global organization that supports high-impact entrepreneurs in emerging markets, The Lebanese Center for Palliative Care/BALSAM and Ruwwad Al Tanmeya in Lebanon, which is focused on the empowerment of marginalized societies through scholarships for education, and as a Trustee of Nusaned, a humanitarian community-based Lebanese NGO.
He is actively involved in the growth of development of Miami’s technology ecosystem, having founded LAB Miami, LAB Ventures and Miami Angels. PAG Law has been named Latin American Venture 59 Table of Contents Capital Law Firm of the Year –2022 by Global 100. Mr.
He is actively involved in the growth of development of Miami’s technology ecosystem, having founded LAB Miami, LAB Ventures and Miami Angels. PAG Law has been named Latin American Venture Capital Law Firm of the Year –2022 by Global 100. Mr. Cappello received his undergraduate degree from Duke University and his law degree from NYU Law School. Sami Khouri.
Anthony Hatoum Chief Executive Officer 60 19 Eduardo Pizzuto Chief Financial Officer and Investor Relations Officer 53 16 Diego Apalategui Director of Sales and Operations 47 19 Luis Bermúdez Director of Purchasing 53 5 Javier Suárez Director of Human Resources 47 19 Pablo Grattarola Director of Information Technology 51 Alejandro Dávila Director of Real Estate 46 1 The business address of our key executives is Río Danubio 51, Col.
Anthony Hatoum Chief Executive Officer 61 20 Eduardo Pizzuto Chief Financial Officer and Investor Relations Officer 54 17 Diego Apalategui Director of Sales and Operations 48 20 Luis Bermúdez Director of Purchasing 54 6 Javier Suárez Director of Human Resources 48 20 Pablo Grattarola Director of Information Technology 52 1 Alejandro Dávila Director of Real Estate 47 2 The business address of our key executives is Av.
Cuauhtémoc, Mexico City, Mexico 06500. The following sets forth biographical information for each of the members of our board of directors: 58 Table of Contents K. Anthony Hatoum. K. Anthony Hatoum is the founder, Chairman of the board of directors and Chief Executive Officer of the Company. Mr. Hatoum began his professional career in J.P.
Presidente Masaryk 8, Polanco V Sección, Miguel Hidalgo, Mexico City, Mexico 11560. The following sets forth biographical information for each of the members of our board of directors: K. Anthony Hatoum. K. Anthony Hatoum is the founder, Chairman of the board of directors and Chief Executive Officer of the Company. Mr. Hatoum began his professional career in J.P.
The share options are generally subject to time-based vesting requirements and generally vest over a five year period, with 25% of the share options vesting at the end of each of the second, third, fourth and fifth calendar year following the calendar year in which they were granted (subject to continued employment and service requirements) (the “Common Options”). 62 Table of Contents We have also issued certain exit options under the 2004 Option Plan to senior management and to current and former members of the board of directors.
The share options are generally subject to time-based vesting requirements and generally vest over a five-year period, with 25% of the share options vesting at the end of each of the second, third, fourth and fifth calendar year following the calendar year in which they were granted (subject to continued employment and service requirements) (the “Common Options”).
For the year ended December 31, 2023, deferred bonus payable to our executive officers was Ps.43,161 thousand. 2004 Option Plan We have a Non-Qualified Stock Option Plan, dated as of July 15, 2004 (as amended) (the “2004 Option Plan”) pursuant to which we have granted options to purchase Class C common shares of the Company to certain employees, directors and other service providers of the Company and its subsidiaries.
For the year ended December 31, 2024, the aggregate compensation expense for the members of the board of directors and our executive officers for services in all capacities was Ps.748,907 thousand, which includes both share-based payments and cash compensation. 61 Table of Contents 2004 Option Plan We have a Non-Qualified Stock Option Plan, dated as of July 15, 2004 (as amended) (the “2004 Option Plan”) pursuant to which we have granted options to purchase Class C common shares of the Company to certain employees, directors and other service providers of the Company and its subsidiaries.
He began his career at AB-InBev in Uruguay, where he advanced from IT Analyst to Regional IT Lead over a 10-year period, gaining significant experience in risk, compliance, and auditing processes. Mr. Grattarola later transitioned to the role of chief information officer across various industries, including retail, health, financial technology, and finance.
Pablo Grattarola. Pablo Grattarola is the Director of Information Technology of the Company. Mr. Grattarola brings over two decades of multi-sector experience to the role. He began his career at AB-InBev in Uruguay, where he advanced from IT Analyst to Regional IT Lead over a 10-year period, gaining significant experience in risk, compliance, and auditing processes. Mr.
Before joining Tiendas 3B in 2018, Mr. Bermúdez served as Import Categories Purchasing Manager for the Saudi Market at Dukan Retailing Discount Company While there, he was involved in the company’s purchasing strategy. Mr. Bermúdez holds a Bachelor’s Degree in Business Administration, with a specialization in Market Research, from the Escuela Superior de Negocios y Marketing in Zaragoza, Spain.
Before joining Tiendas 3B in 2018, Mr. Bermúdez served as Import Categories Purchasing Manager for the Saudi Market at Dukan Retailing Discount Company While there, he was involved in the company’s purchasing strategy.
Meffre began his career as financial analyst in Sydney with BNP PARIBAS Equities Australia and then joined Goldman Sachs Global Investment Research focusing on EMEA markets in London. He serves on the Bemberg Family Council, as well as the Boards of Bemberg Capital, Quilvest Capital Partners SA, Quilvest Capital Partners AM SA (the Quilvest Group AIFM). Mr.
Meffre began his career as financial analyst in Sydney with BNP PARIBAS Equities Australia and then joined Goldman Sachs Global Investment Research focusing on EMEA markets in London.
Our Compensation Committee charter is available on our investor relations website at https://www.investorstiendas3b.com/ . 66 Table of Contents Code of Ethics On January 28, 2024 we adopted a revised code of ethics, which will apply to all of our directors, officers and employees and is publicly available on our website.
Code of Ethics On January 28, 2024 we adopted a revised Code of Business Conducts and Ethics, which will applies to all of our directors, officers and employees and is publicly available on our website.
The Class I directors that were put in place upon consummation of our IPO will hold office until our next annual general meeting. Our directors have been divided among the three classes as follows: • the initial Class I directors are Messrs. Le Ruyet and Gertsacov and Ms.
The Class I directors that were put in place upon consummation of our IPO will hold office until our upcoming annual general meeting, expected to be held on or about April 29, 2025, unless re-elected. Our directors have been divided among the three classes as follows: • the Class I directors are Ms. Martinez, Mr. Stevens and Dr.
Apalategui joined Tiendas 3B in December 2004 as Director of Sales and Operations. Mr. Apalategui holds a Bachelor’s Degree in Information Systems from Universidad Tecnológica Nacional in Buenos Aires. Luis Bermúdez. Luis Bermúdez is the Director of Purchasing of the Company. Mr.
Apalategui joined Tiendas 3B in December 2004 as Director of Sales and Operations. He graduated as a commercial agent from the Navy Commander Tomas Espora secondary school in Buenos Aires. Luis Bermúdez. Luis Bermúdez is the Director of Purchasing of the Company. Mr.
Since the Class C common shares are subject to restrictions on sale for a period of 180 days after the date of the prospectus relating to our IPO, as well as additional restrictions for a further 24 months beyond such 180-day period, our board has determined that delivery of the Class C common shares under the Liquidity Event Bonus Plan will be delayed until after the earlier of (1) January 1, 2025 or (2) any business combination or offer to acquire the Company that would represent a change in control of the Company and also constitutes a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, in each case, within the meaning of Section 409A of the U.S.
Delivery of the Class C common shares under the Bolton Partners Share Allocation is delayed until after the earlier of (1) a date to be determined by us that is after January 1, 2025 but on or prior to December 31, 2025 or (2) any business combination or offer to acquire the Company that would represent a change in control of the Company and also constitutes a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, in each case, within the meaning of Section 409A of the U.S.
Meffre was a Director at ACG Capital (ex Groupama Private Equity), co-manager of the investment team and member of the investment committee. At ACG Capital, he was leading private equity fund investments in primary and secondary opportunities, buy-out, venture capital and/ growth equity, debt and mezzanine, infrastructure and special situations. Mr.
At ACG Capital, he was leading private equity fund investments in primary and secondary opportunities, buy-out, venture capital and/ growth equity, debt and mezzanine, infrastructure and special situations. Mr. Meffre was also actively involved in client relationship, fundraising and new products development.
Alexis Meffre has been a director of the Company since 2023. Mr. Meffre joined Quilvest Capital Partners in 2018 as its Executive Chairman and he currently heads its Executive Committee. He has over 20 years of private equity and finance experience across Europe, the United States and in Emerging Markets. Prior to joining Quilvest, Mr.
He has over 20 years of private equity and finance experience across Europe, the United States and in Emerging Markets. Prior to joining Quilvest, Mr. Meffre was a Director at ACG Capital (ex Groupama Private Equity), co-manager of the investment team and member of the investment committee.
He began his professional career in operational roles at McDonald’s in Argentina, and later as Operations Manager of EKI. Mr. Suárez holds a Bachelor’s and Master’s degree in Humanistic Psychology from Universidad Gestalt in Mexico City and is currently pursuing a Ph.D. in philosophy at the same institution. Mr.
Suárez holds a Bachelor’s and Master’s degree in Humanistic Psychology from Universidad Gestalt in Mexico City and is currently pursuing a Ph.D. in philosophy at the same institution. Mr. Suárez also holds an MBA degree from IPADE Business School in Mexico City. Additionally, he is a professor of human capital management and strategic relationships at Universidad Panamericana in Mexico City.
Martinez, is currently the managing director for France of Montblanc, a German luxury pen and accessory label owned by Richemont, where she has overseen the brand’s expansion into the region. Prior to Montblanc, Ms. Martinez was the managing director for Mexico of Swarovski, an Austrian family business in its fifth generation. She has also held positions at luxury label Chanel.
Prior to Montblanc, Ms. Martinez was the managing director for Mexico of Swarovski, an Austrian family business in its fifth generation. She has also held positions at luxury label Chanel. Ms. Martinez holds a business degree from Neoma Business School and a diploma from Instituto Tecnológico Autónomo de México (ITAM).
Fuster and Khouri, and their terms will expire at the annual general meeting of shareholders expected to be held no later than April 2027. See “Item 10. Additional Information—B. Memorandum and Articles of Association” for further information. The following table sets forth the current members of our board of directors and their ages as of December 31, 2023.
See “Item 10. Additional Information—B. Memorandum and Articles of Association” for further information. The following table sets forth the current members of our board of directors and their ages as of December 31, 2024. 57 Table of Contents Name Age Position K.
The Equity Incentive Plan will be administered by the Compensation Committee or such other committee of our board of directors to which it has properly delegated power, or if no such committee or subcommittee exists, our board of directors. 64 Table of Contents Under the Equity Incentive Plan, 8,400,000 Class A common shares were initially reserved for issuance, which number is subject to increase on the first day of each fiscal year beginning with the 2024 fiscal year in an amount equal to the lesser of (i) the positive difference, if any, between (x) 2.0% of the outstanding common shares on the last day of the immediately preceding fiscal year and (y) the available plan reserve on the last day of the immediately preceding fiscal year and (ii) a lower number of common shares as determined by our board of directors.
The Equity Incentive Plan will be administered by the Compensation Committee or such other committee of our board of directors to which it has properly delegated power, or if no such committee or subcommittee exists, our board of directors. Under the Equity Incentive Plan, 8,400,000 Class A common shares were initially reserved for issuance.
As of December 31, 2023, of our 21,924 employees, approximately 3,400 were employed in our warehouses and distribution centers, approximately 18,200 were employed at our stores and approximately 250 were employed in our corporate offices.
As of December 31, 2024, of our 25,300 employees, 4,070 were employed in our warehouses and distribution centers, 20,848 were employed at our stores and 382 were employed in our corporate offices.
Ms. Martinez holds a business degree from Neoma Business School and a diploma from Instituto Tecnológico Autónomo de México (ITAM). 60 Table of Contents Executive Officers Our officers are appointed by the board of directors. The following table sets forth our current executive officers, their titles, their ages and the years with our company as of December 31, 2023.
Executive Officers Our officers are appointed by the board of directors. The following table sets forth our current executive officers, their titles, their ages and the years with our company as of December 31, 2024. Officer Position Age Years with our company K.
He also holds an MBA from ESIC Business & Marketing School in Barcelona, Spain. Javier Suárez. Javier Suárez is the Director of Human Resources of the Company. Mr. Suárez has been with the Company since 2004 helping shape the growth and development of Tiendas 3B’s workforce.
Mr. 60 Table of Contents Bermúdez holds a Bachelor’s Degree in Business Administration, with a specialization in Market Research, from the Escuela Superior de Negocios y Marketing in Zaragoza, Spain. He also holds an MBA from ESIC Business & Marketing School in Barcelona, Spain. Javier Suárez. Javier Suárez is the Director of Human Resources of the Company. Mr.
Information contained on our website should not be considered to be part of this annual report or in deciding whether to invest in our Class A common shares. Service Contracts None of the members of our Board of Directors have entered into service contracts with us or any of our subsidiaries providing for benefits upon termination of employment. D.
We intend to disclose future amendments to, or waivers of, our code of ethics on the same page of our investor relations website. 66 Table of Contents Service Contracts None of the members of our Board of Directors have entered into service contracts with us or any of our subsidiaries providing for benefits upon termination of employment. D.
Number of Common Options 2023 2022 2021 Outstanding as of January 1, 29,366,250 22,031,250 16,991,250 Granted during the year 6,270,000 7,335,000 5,085,000 Forfeited during the year (645,000 ) — (45,000 ) Outstanding as of December 31, 34,991,250 29,366,250 22,031,250 Weighted average strike price (US$) US$ 6.02 US$ 4.69 US$ 3.03 The table below sets forth the grants per year (net of forfeitures) and the weighted average strike prices of the Exit Options.
Number of Class C common shares subject to Common Options 2024 2023 2022 Outstanding as of January 1, 34,991,250 29,366,250 22,031,250 Granted during the year — 6,270,000 7,335,000 Forfeited during the year (1,492,500 ) (645,000 ) — Outstanding as of December 31, 33,498,750 34,991,250 29,366,250 Weighted average strike price (US$) US$ 5.98 US$ 6.02 US$ 4.69 During 2024 and until the date of this annual report, a total of 2,093,449 Class C common shares subject to Common Options were exercised (considering the 3-for-1 share split effected in connection with our IPO), and 93,466 were cancelled due to a net settlement of the exercised options.
Internal Revenue Code of 1986, as amended (the “Delayed Delivery”). Founder Liquidity Bonus Pursuant to the terms of the shareholders’ agreement as in effect prior to our IPO, Bolton Partners Ltd., a vehicle affiliated with Mr. Hatoum, was entitled to receive 4,211,155 Class C common shares of the Company following consummation of our IPO.
Bolton Partners Share Allocation Pursuant to the terms of the 2004 shareholders’ agreement as in effect prior to our IPO, Bolton Partners Ltd., a vehicle affiliated with Mr.
Name Age Position K. Anthony Hatoum 60 Chairman Nicole Reich 58 Independent Director Dan Gertsacov 48 Independent Director Jean-François Le Ruyet 55 Director Alexander Fuster 58 Independent Director Juan Pablo Cappello 56 Independent Director Sami Khouri 72 Independent Director Alexis Meffre 48 Director Stephanie Martinez 47 Independent Director The business address of our directors is Río Danubio 51, Col.
Anthony Hatoum 61 Chairman Nicole Reich 59 Independent Director Dennis Stevens 57 Independent Director Angela Bakker Lee 54 Independent Director Alexander Fuster 59 Independent Director Juan Pablo Cappello 57 Independent Director Sami Khouri 73 Independent Director Alexis Meffre 49 Director Stephanie Martinez 48 Independent Director The business address of our directors is Av.
Number of Exit Options 2023 2022 2021 Outstanding as of January 1, 7,064,982 7,064,982 6,544,974 Granted during the year 379,992 — 900,000 Forfeited during the year — — (379,992 ) Outstanding as of December 31, 7,444,974 7,064,982 7,064,982 Weighted average strike price (US$) US$ 3.43 US$ 3.45 US$ 3.45 The Stock Options issued under the 2004 Option Plan will continue to be governed by the terms of the 2004 Option Plan, and the Common Options (to the extent unvested) will continue to vest on the same terms and conditions that originally applied to such Common Options.
The Stock Options issued under the 2004 Option Plan are governed by the terms of the 2004 Option Plan, and the Common Options (to the extent unvested) will continue to vest on the same terms and conditions that originally applied to such Common Options.
Meffre is a graduate from HEC Paris ( Hautes Etudes Commerciales ) and IEP Paris ( Institut d’Etudes Politiques de Paris ). Stephanie Martinez. Stephanie Martinez has been a director of the Company since 2023. Ms.
He serves on the Bemberg Family Council, as well as the Boards of Bemberg Capital, Quilvest Capital Partners SA, Quilvest Capital Partners AM SA (the Quilvest Group AIFM). 59 Table of Contents Mr. Meffre is a graduate from HEC Paris ( Hautes Etudes Commerciales ) and IEP Paris ( Institut d’Etudes Politiques de Paris ). Stephanie Martinez.
Removed
Gertsacov is an executive with 25 years of experience in the technology, food and restaurant industries. His experience includes senior roles at Google, Arcos Dorados and Focus Brands. Mr. Gertsacov is a Senior Advisor at McKinsey & Company. He holds a Bachelor of Arts degree with Honors from the University of Richmond and an MBA from Harvard Business School.
Added
Bakker Lee; they were re-elected (in the case of Ms. Martinez) or elected for the first time (in the cases of Mr. Stevens and Dr.
Removed
Jean-François Le Ruyet. Jean-François Le Ruyet has been a director of the Company since 2023. Mr. Le Ruyet is a partner at Quilvest Capital Partners, where he is the co-manager of the global co-investment and fund programs with a focus on European buy-out funds. He also serves on Quilvest Capital Partner’s global investment committee and the co-investment investment committee.
Added
Dennis Stevens is the founder and Chief Executive Officer of SecureCorp, a company that develops, implements and operates advanced security technologies for multinational corporations and governments, as well as the founder and president of Pretorious Ltd., a drone manufacturing start-up based in Canada and Mexico. Mr.
Removed
Prior to joining Quilvest Capital Partners in 2003, Mr. Le Ruyet was management and strategic consultant with Bain & Company and later with McKinsey & Company. At McKinsey, he worked with several European private equity sponsors with a focus on media and consumer goods and was involved with strategic and market due diligence as well as merger and acquisition valuation.
Added
Stevens has over 35 years of experience across private equity, venture capital and corporate strategy in Latin America. His ventures include the Nostos Group and Mythos Group, which operate high-end Greek restaurants in Mexico; Centiva S.A. de C.V., a company that designs and operates employee incentive programs for large companies; and Screencast S.A.P.I. de C.V., a digital out-of-home media company.
Removed
Prior to his consulting career, he worked for two years at Société Générale in São Paulo, Brazil. Mr. Le Ruyet received his undergraduate degree from Ecole des Hautes Etudes Commerciales in Paris, France and an MBA from Columbia Business School. Alexander Fuster. Alexander Fuster has been a director of the Company since 2015. Mr.
Added
Previously, he worked in the private equity and venture capital groups of several leading finance firms, including Discovery Capital Americas LLC, where he participated in the launch of the Mexican discount airline Volaris; La Caisse de Dépôts et Placements du Québec, where he specialized in private equity deals originating in Mexico, Colombia, Venezuela, Central America and the Caribbean; and Nexus Ventures International Inc., a hybrid venture capital boutique that developed industrial and environmental joint ventures between strategic and local co-investors across Latin America.
Removed
Cappello received his undergraduate degree from Duke University and his law degree from NYU Law School. Sami Khouri. Sami Khouri has been a director of the Company since 2015. Mr.
Added
Before that, he worked as a consultant for Boston Consulting Group and worked as an analyst at John Labatt Ltd. Mr. Stevens holds an MBA from the Ivey School of Business and an Honors Business Administration degree from the University of Western Ontario’s School of Business Administration. Angela Bakker Lee.
Removed
Officer Position Age Years with our company K.
Added
Angela Bakker Lee is the Chief Executive Officer of Pineapple Ventures, a start-up investor and strategic advisor to several U.S. companies launching innovative technology and AI-powered solutions in healthcare including Lighten Platforms, LifeAire Systems and Ambit. Dr.
Removed
Suárez also holds an MBA degree from IPADE Business School in Mexico City. Additionally, he is a professor of human capital management and strategic relationships at Universidad Panamericana in Mexico City. 61 Table of Contents Pablo Grattarola. Pablo Grattarola is the Director of Information Technology of the Company. Mr. Grattarola brings over two decades of multi-sector experience to the role.
Added
Bakker Lee has over 20 years of senior leadership and general management experience, overseeing go-to-market strategy, product evolution and pricing, 58 Table of Contents channel partnerships and M&A. Prior to becoming an investor, Dr. Bakker Lee served as Executive Vice President for SomaLogic, a proteomics technology and service provider with headquarters in Colorado that completed an IPO in 2021.
Removed
For the year ended December 31, 2023, the aggregate compensation expense for the members of the board of directors and our executive officers for services in all capacities was Ps.515,483 thousand, which includes both share-based payments and cash compensation.
Added
She also held leadership positions at Quid, an AI software provider in San Francisco, and at IBM in New York, where she launched the Watson Business Unit.
Removed
In addition, as part of our retention strategy, certain of our executive officers agreed to defer the payment of certain accrued bonuses.
Added
She began her professional career in 1996 first by joining MAG, an industry-first bioinformatics start-up in Palo Alto California that was later acquired by Celera Genomics, and then as a Global Managing Partner at ZS Associates, a management consulting firm whose healthcare industry clients hail from over 40 countries. Dr.
Removed
As of the date of this annual report, a total of 43,186,224 Stock Options was outstanding (considering the 3-for-1 share split effected in connection with our IPO), of which 25,508,724 were fully vested and all of which were issued pursuant to the 2004 Stock Option Plan. Each Stock Option represents the right to receive one Class C common share.
Added
Bakker Lee holds a bachelor’s degree from Stanford University and a PhD in Immunology from Strathclyde, which she earned as a Marshall Scholar in the UK. Alexander Fuster. Alexander Fuster has been a director of the Company since 2011. Mr. Fuster is currently a private investor and heads a family office based in Miami, Florida.
Removed
Hatoum (directly or indirectly through Bolton Partners Ltd.) are eligible to participate. Participants in the Liquidity Event Bonus Plan are eligible to receive a certain number of Class C common shares of the Company following consummation of our IPO, based on the participant’s allocated percentage of bonus pool under the Liquidity Event Bonus Plan (the “Bonus Pool”).
Added
He holds a degree in Economics from the American University of Beirut. Alexis Meffre. Alexis Meffre has been a director of the Company since 2023. Mr. Meffre joined Quilvest Capital Partners in 2018 as its Executive Chairman and he currently serves as CEO and heads its Executive Committee.
Removed
The Bonus Pool, as calculated at the time of the consummation of our IPO is equal to 7,500,000 Class C common shares.
Added
Stephanie Martinez has been a director of the Company since 2023. Ms. Martinez, is currently the managing director for France of Montblanc, a German luxury pen and accessory label owned by Richemont. Before 2024 and for 10 years, she was the managing director of the same company for Latin America, where she oversaw the brand’s expansion into the region.
Removed
The Bonus Pool was calculated at the time of the consummation of our IPO, based on the sum of (x) 1,440,000 Class C common shares, plus a (y) a certain number of additional Class C common shares if the enterprise value (as defined for purposes of the Liquidity Event Bonus Plan) of the Company immediately prior to our IPO exceeded US$1,000,000,000, with such number of additional Class C common shares equal to the product of (A) the amount of enterprise value above US$1,000,000,000 divided by US$17 million, multiplied by (B) 100,000 (and rounded up to the closest full number).
Added
Suárez has been with the Company since 2004 helping shape the growth and development of Tiendas 3B’s workforce. He began his professional career in operational roles at McDonald’s in Argentina, and later as Operations Manager of EKI. Mr.
Removed
There was a limit of 7,500,000 Class C common shares that may be issued under the Bonus Pool, which was reached based on these calculations.
Added
Grattarola later transitioned to the role of chief information officer across various industries, including retail, health, financial technology, and finance.
Removed
The number of Class C common shares Bolton Partners Ltd. received was calculated based on the internal rate of return (“IRR”) Quilvest Capital Partners realized in connection with our IPO, regardless of whether Quilvest Capital Partners actually sold any of its Company shares as part of our IPO.
Added
In connection with our IPO, our board of directors agreed to accelerate the vesting of all Common Options that were issued during or prior to December 2020 to the extent that such Common Options were outstanding and unvested as of immediately prior to the closing of our IPO.
Removed
The IRR was determined based on the higher of: (x) the price per Class A common share offered to the public under our IPO and (y) the volume-weighted average price per Class A common share for a period of five consecutive trading days beginning and including the first full trading day following our IPO.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

19 edited+15 added−20 removed12 unchanged
Liquidity and Capital Resources” for additional information about the terms of the Promissory Notes. 71 Table of Contents In addition to the amounts set forth below, as consideration for the Promissory Note holders’ agreement to extend the maturity of the Promissory Notes from May 31, 2024 to December 31, 2026, we agreed to pay, on the date the Promissory Notes were repaid with the proceeds of our IPO, an additional: (1) US$4,100,000 to the Senior Promissory Note holders, (2) US$230,000 to the 2017 Junior Promissory Note holders and (3) US$20,000 to the 2020 Junior Promissory Note holders.
Liquidity and Capital Resources” for additional information about the terms of the Promissory Notes. 70 Table of Contents In addition to the amounts set forth below, as consideration for the Promissory Note holders’ agreement to extend the maturity of the Promissory Notes from May 31, 2024 to December 31, 2026, we agreed to pay, on the date the Promissory Notes were repaid with the proceeds of our IPO, an additional: (1) US$4,100,000 to the Senior Promissory Note holders, (2) US$230,000 to the 2017 Junior Promissory Note holders and (3) US$20,000 to the 2020 Junior Promissory Note holders.
However, the table above and the foregoing ownership information does not include the following shares that are or will be held by directly or indirectly by Mr.
However, the table above and the foregoing ownership information do not include the following shares that are or will be held by directly or indirectly by Mr.
Compensation—Agreements with our Executive Officers.” As part of our 72 Table of Contents retention strategy, certain of our executive officers agreed to defer the payment of certain accrued bonuses. For the year ended December 31, 2023, deferred bonus payable to our executive officers was Ps.43,161 thousand. None of our directors have entered into service agreements with us.
Compensation—Agreements with our Executive Officers.” As part of our 71 Table of Contents retention strategy, certain of our executive officers agreed to defer the payment of certain accrued bonuses. For the year ended December 31, 2024, deferred bonus payable to our executive officers was zero. None of our directors have entered into service agreements with us.
Hatoum, directly or indirectly through Bolton Partners Ltd., beneficially owns approximately 45.0% of the combined voting power of our outstanding common shares. See “Item 6. Directors, Senior Management and Employees–B. Compensation—2004 Option Plan,” “Item 6. Directors, Senior Management and Employees –B. 70 Table of Contents Compensation—Liquidity Event Bonus Plan” and “Item 6. Directors, Senior Management and Employees–B.
Hatoum, directly or indirectly through Bolton Partners Ltd., would beneficially own approximately 43.5% of the combined voting power of our outstanding common shares. See “Item 6. Directors, Senior Management and Employees–B. Compensation—2004 Option Plan,” “Item 6. Directors, Senior Management and Employees –B. Compensation—Liquidity Event Share Plan” and “Item 6. Directors, Senior Management and Employees–B.
CII's divisions of each of the investment management entities collectively provide investment management services under the name "Capital International Investors.". The business address for Capital International Investors is 333 South Hope Street, 55th Floor, Los Angeles, California, United States 90071.
CII’s divisions of each of the investment management entities collectively provide investment management services under the name “Capital International Investors.” The business address for Capital International Investors is 333 South Hope Street, 55th Floor, Los Angeles, California, United States 90071. (10) Based solely on a Schedule 13G filed by Capital Research Global Investors on April 4, 2025.
(12) Based solely on a Schedule 13G filed by Capital International Investors on March 11, 2024 . ,Capital International Investors ("CII") is a division of Capital Research and Management Company ("CRMC"), as well as its investment management subsidiaries and affiliates Capital Bank and Trust Company, Capital International, Inc., Capital International Limited, Capital International Sarl, Capital International K.K., Capital Group Private Client Services, Inc., and Capital Group Investment Management Private Limited (together with CRMC, the "investment management entities").
Capital International Investors (“CII”) is a division of Capital Research and Management Company (“CRMC”), as well as its investment management subsidiaries and affiliates Capital Bank and Trust Company, Capital International, Inc., Capital International Limited, Capital International Sarl, Capital International K.K., Capital Group Private Client Services, Inc., and Capital Group Investment Management Private Limited (together with CRMC, the “investment management entities”).
The percentages of beneficial ownership in the table below are calculated on the basis of the following numbers of shares outstanding as of March 31, 2024: 38,709,677 Class A common shares, 5,200,000 Class B common shares and 68,291,075 Class C common shares.
The percentages of beneficial ownership in the table below are calculated on the basis of the following numbers of shares outstanding as of the date hereof: 62,048,108 Class A common shares, 5,200,000 Class B common shares and 47,518,697 Class C common shares outstanding.
ITEM 7. MAJOR S HAREHOLDERS AND RELATED PARTY TRANSACTIONS A. MAJOR SHA REHOLDERS The table below contains information regarding the beneficial ownership of our equity securities. Beneficial ownership is determined under SEC rules and generally includes voting or investment power over securities.
ITEM 7. MAJOR S HAREHOLDERS AND RELATED PARTY TRANSACTIONS A. MAJOR SHA REHOLDERS The table below contains information regarding the beneficial ownership of our equity securities as of April 25, 2025.
Common Shares Beneficially Owned Total Voting Power Class A Class B Class C (1) Shares % Shares % Shares % % Directors and Executive Officers (2) Anthony Hatoum (3) — — 5,200,000 100.0% 7,866,365 11.5% 46.4% Nicole Reich de Polignac — — — — — — — Dan Gertsacov — — — — — — — Jean-François Le Ruyet (4) — — — — — — — Alexander Fuster — — — — — — — Juan Pablo Cappello — — — — — — — Sami Khouri (5) — — — — 5,390,940 7.9% 2.9% Alexis Meffre (6) — — — — — — — Stephanie Martinez — — — — — — — Eduardo Pizzuto — — — — — — — Diego Apalategui — — — — — — — Luis Bermúdez — — — — — — — Javier Suárez — — — — — — — Pablo Grattarola — — — — — — — Alejandro Dávila — — — — — — — All directors and executive officers as a group (15 persons) (7) — — 5,200,000 100.0% 13,257,305 19.4% 49.3% — — — 5% Shareholders — — — QS BBB Inc.
Anthony Hatoum (4) — — 5,200,000 100.0% 5,828,954 12.3% 44.7% Nicole Reich de Polignac — — — — — — — Dennis Stevens * * — — — — * Angela Bakker Lee * * — — — — * Alexander Fuster — — — — — — — Juan Pablo Cappello — — — — — — — Sami Khouri (5) — — — — 3,719,648 7.8% 2.0% Alexis Meffre (6) — — — — — — — Stephanie Martinez — — — — — — — Eduardo Pizzuto — — — — * * * Diego Apalategui — — — — — — — Luis Bermúdez — — — — — — — Javier Suárez — — — — — — — Pablo Grattarola — — — — — — — Alejandro Dávila — — — — — — — All directors and executive officers as a group (15 persons) (7) * * 5,200,000 100.0% 9,559,316 20.1% 46.7% 5% Shareholders QS 3B Aggregator Inc.
Hatoum’s ownership includes (i) 5,200,000 Class B common shares and 7,083,461 Class C common shares held by Bolton Partners Ltd., which is an investment vehicle of which Mr. Hatoum and his immediate family members, directly or through irrevocable trusts for the benefit of family members, hold all of the beneficial ownership interests, and with respect to which Mr.
Hatoum and his immediate family members (directly or through irrevocable trusts for the benefit of family members) hold all of the beneficial ownership interests, owns 5,200,000 Class B common shares and 5,828,954 Class C common shares, in respect of which Mr. Hatoum may be deemed to have voting and dispositive power.
(8) The business address for QS BBB Inc. is Craigmuir Chambers Road Town, VG1110, British Virgin Islands. QS BBB Inc. is an affiliate of QS 3B, Inc. and QS T3B, Inc. Each is an investment vehicle managed by Quilvest Capital Partners or its affiliates. Messrs.
See “Item 6. Directors, Senior Management and Employees—B. Compensation” for further information regarding our equity incentive plans and awards. (8) The business address for QS 3B Aggregator Inc. is Craigmuir Chambers Road Town, VG1110, British Virgin Islands.QS 3B Aggregator Inc. is an investment vehicle managed by Quilvest Capital Partners or its affiliates. Mr.
Taking into account such Class C common shares, as well as the Class C common shares similarly issuable under Stock Options (including both unvested and vested (but currently unexercisable) and assuming net settlement at their respective strike prices), and awarded under the Liquidity Event Bonus Plan to direct reports of the Chief Executive Officer, directors and other officers, as applicable, Mr.
Taking into account such Class A common shares and Class C common shares, as well as other Class A common shares and Class C common shares similarly issuable under stock options under our current Equity Incentive Plan, our 2004 Option Plan (including both unvested and vested (but currently unexercisable) and assuming net settlement at their respective strike prices and a price per Class A common share of US$30.19 (the last reported sale price of our Class A common shares on the New York Stock Exchange on April 25, 2025)), and those under the Liquidity Event Share Plan and Bolton Share Allocation, Mr.
The table below does not reflect: 43,186,224 Class C common shares issuable upon the exercise of options granted under our 2004 Option Plan, 7,500,000 Class C common shares awarded under the Liquidity Event Bonus Plan and 4,211,155 Class C common shares awarded under the Founder Liquidity Bonus.
Compensation—2004 Option Plan.” As a result, the table below does not reflect: 38,232,812 Class C common shares issuable upon the exercise of options granted under our 2004 Option Plan, 1,310,000 stock options each exercisable for one Class A common share under the 2024 Equity Plan, 605,000 RSUs under the 2024 Equity Plan, 7,500,000 Class C common shares under the Liquidity Event Share Plan and 4,224,960 Class C common shares under the Bolton Share Allocation.
See “Item 10. Additional Information—B. Memorandum and Articles of Association” for more information about the rights of our Class A common shares, Class B common shares and Class C common shares.
Memorandum and Articles of Association” for more information about the rights of our Class A common shares, Class B common shares and Class C common shares. 68 Table of Contents Common Shares Beneficially Owned (1) Total Voting Power (2) Class A Class B Class C Shares % Shares % Shares % % Directors and Executive Officers (3) K.
Additional Information—B. Memorandum and Articles of Association.” (2) Unless indicated otherwise, the current business address for our directors and executive officers is Río Danubio 51, Col. Cuauhtémoc, Mexico City, Mexico 06500. (3) Mr.
Additional Information—B. Memorandum and Articles of Association.” (3) Unless indicated otherwise, the current business address for our directors and executive officers is Av. Presidente Masaryk 8, Polanco V Sección, Miguel Hidalgo, Mexico City, Mexico 11560. (4) Bolton Partners Ltd., an investment vehicle of which Mr.
(7) The table above does not include: (i) 43,186,224 Class C common shares in respect of both unvested and vested (but currently unexercisable) Stock Options and (ii) 11,711,155 delayed-delivery awards under the Liquidity Event Bonus Plan and the Founder Liquidity Bonus, substantially all of which are held by our directors and executive officers (including those held by our principal shareholder as described in note (3) above).
(7) The table above does not include the following, substantially all of which are held by our directors and executive officers (including those held by our principal shareholder as described in note (4) above): 38,232,812 Class C common shares issuable upon the exercise of options granted under our 2004 Option Plan, 1,310,000 stock options each exercisable for one Class A common share under the 2024 Equity Plan, 605,000 RSUs under the 2024 Equity Plan, 7,500,000 Class C common shares under the Liquidity Event Share Plan and 4,224,960 Class C common shares under the Bolton Share Allocation.
The business address for GIC Private Limited is 168 Robinson Road #37-01 Capital Tower, Singapore 068912. B.
(11) Based solely on a Schedule 13G filed by GIC Private Ltd. on February 20, 2025. The business address for GIC Private Ltd. is 168 Robinson Road #37-01 Capital Tower Singapore 068912. (12) Based solely on a Schedule 13G filed by Gilder Gagnon Howe & Co LLC on February 10, 2025.
QS T3B, Inc. is an affiliate of QS BBB Inc. and QS 3B, Inc. Each is an investment vehicle managed by Quilvest Capital Partners or its affiliates. Messrs. Le Ruyet and Meffre are Partners at Quilvest Capital Partners and each disclaims beneficial ownership of Class A common shares held by vehicles managed by Quilvest Capital Partners.
Meffre is a Partner at Quilvest Capital Partners and disclaims beneficial ownership of Class A common shares and Class C common shares held by vehicles managed by Quilvest Capital Partners. (9) Based solely on a Schedule 13G filed by Capital International Investors on March 11, 2024.
Hatoum through Bolton Partners Ltd.: (i) Stock Options (including unvested and vested but currently unexercisable) representing the right to receive 8,550,000 Class C common shares; (ii) 6,000,000 Class C common shares awarded immediately prior to the consummation our IPO pursuant to the Liquidity Event Bonus Plan, the delivery of which has been delayed until after the earlier of (x) January 1, 2025 and (y) any business combination or offer to acquire the Company that would represent a change in control of the Company; and (iii) 4,211,155 Class C common shares awarded immediately prior to the consummation of our IPO pursuant to the Founder Liquidity Bonus, the delivery of which has been delayed as described in clause (ii).
Hatoum through Bolton Partners Ltd: (i) 8,550,000 Class C common shares issuable upon exercise of Stock Options granted under our 2004 Option Plan (including unvested and vested but currently unexercisable Stock Options); (ii) up to 6,000,000 Class C common shares under the Liquidity Event Share Plan, the allocation, the final terms and conditions and delivery of which remain undefined by our board of directors; (iii) 4,224,960 Class C common shares under the Bolton Partners Share Allocation but subject to Delayed Delivery, and (iv) 275,000 Class A common shares issuable upon exercise of stock options or RSUs granted under our Equity Incentive Plan (all of which are unvested).
Removed
Each Class B common share will convert automatically into one Class A common share (i) upon sale into the public market; (ii) upon any transfer, whether or not for value (except for certain permitted transfers described in our memorandum and articles of association, including transfers to and between trusts or other vehicles solely for the benefit of our principal shareholder, its affiliates and/or members of the immediate family of Mr.
Added
Common shares subject to options, warrants or rights that were exercisable at April 25, 2025 or that will be exercisable within 60 days of the date of this report, are considered to be outstanding and beneficially owned by the person who holds such options, warrants or rights for purposes of computing that person’s common share ownership, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
Removed
Hatoum, its direct and indirect shareholders and partnerships, corporations and other entities exclusively owned by our principal shareholder, its affiliates and/or members of the immediate family of Mr.
Added
However, as of the date hereof, there are no common shares subject to options exercisable within 60 days because they are either unvested in the case of stock options and RSUs granted under our Equity Incentive Plan, or subject to restrictions on exercise in the case of Stock Options under our 2004 Incentive Plan as described in “Item 6.
Removed
Hatoum); and (iii) at such time as the number of issued and outstanding Class B common shares represents less than 1.0% of the aggregate number of the aggregate common shares of the Company then outstanding.
Added
See “Item 6. Directors, Senior Management and Employees—B. Compensation” for further information regarding our equity incentive plans and awards. Beneficial ownership is determined under SEC rules and generally includes voting or investment power over securities.
Removed
A Class B common share will convert automatically into one Class C common share upon foreclosure or enforcement of any pledge over the Class B common shares.
Added
(8) — — — — 11,232,447 23.6% 6.0% Capital International Investors (9) 6,732,117 10.8% — — — — 3.6% Capital Research Global Investors (10) 5,357,086 8.6% — — — — 2.9% GIC Private Ltd.
Removed
Following the expiry of the Liquidity Lock-Up Period, a holder of Class B common shares may also at any time elect to convert a Class B common share into one Class A common share by delivering a conversion notice to the Company.
Added
(11) 3,066,893 4.9% — — — — 1.6% Gilder Gagnon Howe & Co LLC (12) 2,853,906 4.6% — — — — 1.5% Morgan Stanley (13) 2,176,892 3.5% — — — — 1.2% FMR LLC (14) 3,494,773 5.6% — — — — 1.9% Other shareholders (15) 38,361,163 61.8% — — 26,726,934 56.2% 34.7% Total shares per Class 62,048,108 100.0% 5,200,000 100.0% 47,518,697 100.0% 100.0% * Indicates beneficial ownership of less than 1% of the class of common shares.
Removed
Each Class C common share will convert automatically into one Class A common share upon (i) sale into the public market; (ii) certain transfers permitted during the Liquidity Lock-Up Period (including “change of 68 Table of Contents control” transactions and piggy back or registration rights sales described above); and (iii) upon expiry of the Liquidity Lock-Up Period.
Added
(1) The column “Common shares Beneficially Owned” reflect securities beneficially owned as of April 25, 2025. (2) Percentage of total voting power represents voting power with respect to all of our Class A common shares, Class B common shares and Class C common shares, as a single class.
Removed
Any Class C common shares that remain outstanding (but not, for the avoidance of doubt, Class B common shares) shall immediately and automatically convert into Class A common shares upon the expiry of the Liquidity Lock-Up Period.
Added
Compensation—Bolton Partners Share Allocation.” 69 Table of Contents (5) Mr. Khouri’s shares are held through MNCF Ltd. Mr. Khouri may be deemed to have voting and dispositive power over the shares held by such entity. The business address for MNCF Ltd. is 27 Hospital Road, KY1-8001, George Town, Cayman Islands. (6) Mr.
Removed
In addition, our articles of association permit the conversion of Class C common shares into Class A common shares upon the affirmative vote of holders representing at least 75% of the votes of the Class B common shares and Class C common shares voting as a single class (provided that such conversion does not take place within 18 months as of February 9, 2024).
Added
Alexis Meffre is a Partner at Quilvest Capital Partners.
Removed
The ability to exercise such options or to receive delivery of such Class C common shares, as applicable, are subject to the restrictions described below.
Added
Capital Research Global Investors (“CRGI”) is a division of CRMC, as well as the investment management entities. CRGI’s divisions of each of the investment management entities collectively provide investment management services under the name “Capital Research Global Investors.” The business address for Capital Research Global Investors is 333 South Hope Street, 55th Fl, Los Angeles, CA 90071.
Removed
Since, pursuant to the terms of our memorandum and articles of association, the Class C common shares are subject to restrictions on sale for a period of 180 days after the date of the prospectus relating to our IPO, as well as additional restrictions for a further 24 months following such 180-day period, our board of directors has determined that any vested Stock Options issued under the 2004 Option Plan cannot be exercised until the earliest to occur of (1) the conversion of Class C common shares pursuant to the initial exercise of registration rights under our memorandum and articles of association, (2) July 8, 2026, (3) any business combination or offer to acquire the Company that would represent a change in control of the Company (which will result in the automatic acceleration of all vested options), and (4) the conversion of Class C common shares into Class A common shares upon the affirmative vote of holders representing at least 75% of the votes of the Class B common shares and Class C common shares voting as a single class (provided that such conversion does not take place within 18 months of the date of the prospectus relating to our IPO). 69 Table of Contents Similarly, considering the restrictions on the sale of Class C common shares described above, our board of directors has determined that delivery of the Class C common shares under the Liquidity Event Bonus Plan and under the Founder Liquidity Bonus will be delayed until after the earlier of (1) January 1, 2025 or (2) any business combination or offer to acquire the Company that would represent a change in control of the Company and also constitutes a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, in each case, within the meaning of Section 409A of the U.S.
Added
The business address for Gilder Gagnon Howe & Co LLC is 475 10th Ave New York, NY 10018. (13) Based solely on a Schedule 13G filed jointly by Morgan Stanley and Morgan Stanley Capital Services LLC on February 3, 2025. The business address for both Morgan Stanley and Morgan Stanley Capital Services LLC is 1585 Broadway, New York, NY 10036.
Removed
(8) — — — — 13,107,000 19.2% 7.1% QS 3B, Inc. (9) — — — — 12,954,645 19.0% 7.0% QS T3B, Inc. (10) — — — — 6,822,414 10.0% 3.7% BBB Investments Group S.A.
Added
(14) Based solely on a Schedule 13G filed jointly by FMR LLC and Abigail P. Johnson on February 12, 2025. Abigail P. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR LLC and reports jointly with FMR LLC as a beneficial owner of the Class A common shares held by FMR LLC.
Removed
(11) — — — — 6,757,647 9.9% 3.7% Capital International Investors (12) 6,732,117 17.4% — — — — 3.6% GIC Private Limited (13) 2,720,000 7.0% — — — — 1.5% Total shares per Class 38,709,677 100.0% 5,200,000 100.0% 68,291,075 100.0% (1) Percentage of total voting power represents voting power with respect to all of our Class A common shares, Class B common shares and Class C common shares, as a single class.
Added
Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC.
Removed
Hatoum may be deemed to have voting and dispositive power, and (ii) 1,232,904 Class C common shares held by Bolton Partners Ltd. indirectly through BBB Investments Group S.A., an investment vehicle over whipch no shareholder exercises control, and in respect of which shares Bolton Partners Ltd. maintains voting and dispositive power (but not as to the remaining shares of the Company held by BBB Investments Group S.A.).
Added
The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares.
Removed
Compensation—Founder Liquidity Bonus.” (4) Mr. Jean-François Le Ruyet is a Partner at Quilvest Capital Partners. Mr. Le Ruyet disclaims beneficial ownership of Class A common shares held by vehicles managed by Quilvest Capital Partners. (5) Mr. Kouri’s shares are held through Mexico Offshore S.A.L., with respect to which Mr. Kouri may be deemed to have voting and dispositive power.
Added
Accordingly, through their ownership of voting common shares and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, as amended, to form a controlling group with respect to FMR LLC. The business address for FMR LLC is 245 Summer Street, Boston, Massachusetts 02210.
Removed
The business address for Mexico Offshore S.A.L. is Mina El Hosn, Omar Daouk Street, Starco Center, Block B, Second Floor, Beirut, Lebanon. (6) Mr. Alexis Meffre is a Partner at Quilvest Capital Partners. Mr. Meffre disclaims beneficial ownership of Class A common shares held by vehicles managed by Quilvest Capital Partners.
Added
(15) The disclosure with respect to the remaining shareholders is being made on an aggregate basis because, to our knowledge, none of their beneficial ownership exceeds 5% or more of any class of our common shares. B.
Removed
Le Ruyet and Meffre are Partners at Quilvest Capital Partners and each disclaims beneficial ownership of Class A common shares held by vehicles managed by Quilvest Capital Partners. (9) The business address for QS 3B, Inc. is Craigmuir Chambers Road Town, VG1110, British Virgin Islands. QS 3B, Inc. is an affiliate of QS BBB, Inc. and QS T3B, Inc.
Removed
Each is an investment vehicle managed by Quilvest Capital Partners or its affiliates. Messrs. Le Ruyet and Meffre are Partners at Quilvest Capital Partners and each disclaims beneficial ownership of Class A common shares held by vehicles managed by Quilvest Capital Partners. (10) The business address for QS T3B, Inc. is Craigmuir Chambers Road Town, VG1110, British Virgin Islands.
Removed
(11) The business address for BBB Investments Group S.A. is Bloc Office Hub, Fifth Floor, Santa Maria Business District, Panama, Republic of Panama.
Removed
Does not include 1,232,904 Class C common shares held by Bolton Partners Ltd. indirectly through BBB Investments Group S.A., and in respect of which shares Bolton Partners Ltd. maintains voting and dispositive power as described in note (3) above.
Removed
(13) Based solely on a Schedule 13G filed by GIC Private Limited on February 9, 2024, GIC Private Limited has sole voting power and sole dispositive power over 2,378,717 shares of Class A Common Stock and shared voting power and shared dispositive power over 341,283 shares of Class A Common Stock.

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