© Reuters.
By Sarah Morland
MEXICO CITY (Reuters) -Mexican restaurant chain operator Alsea on Monday posted a 37% jump in its net profit for the last three months of 2023, citing an uptick in sales linked to better consumer trends.
Net profit hit 1.05 billion pesos ($62 million).
Alsea, which operates chain stores including Starbucks (NASDAQ:), Burger King and Domino’s Pizza (NYSE:), also reported quarterly net revenue up 8% from a year earlier to 19.88 billion pesos.
Net profit landed well above median forecasts of analysts polled by LSEG, who had predicted a quarterly net profit of just 587 million pesos, although they had estimated slightly higher revenue at 20.2 billion pesos.
Chief Executive Armando Torrado said in a statement that earnings had benefited from positive consumer trends, new product roll-out and digital innovation.
Sales in Mexico grew 14% while in Europe they grew 2.7% and slid by 0.5% in South America – hit by inflation and currency devaluation in Argentina. Stripping out effects from a stronger Mexican peso, Alsea said sales in Europe would have climbed 9%.
Alsea, which operates chain restaurants, fast food joints and coffee shops in a dozen countries across Europe and Latin America, makes more than half of its sales from Mexico and close to a third across western Europe.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) were up 26% to 3.18 billion pesos, Alsea said, helped by solid sales growth and lower European energy costs, but nevertheless landing below LSEG’s 3.95-billion-peso forecast.
Its Mexican earnings, it said, benefited from more sales and lower costs, partially offset by the country’s annual minimum wage hike.
Torrado last quarter noted that the group was budgeting for the hike, saying it would affect around 30% of its workforce, largely Domino’s Pizza deliverers and waiters working at the Vips restaurant chain.
($1 = 16.9666 Mexican pesos at end-December)
This story originally appeared on Investing
