Orbis Investment Management Limited on BBB Foods

BBB Foods operates the Tiendas 3B Mexican hard-discount chain and has grown its store count by roughly 20% annually for more than a decade. Orbis sees the heart of its moat in exclusive supplier relationships and a tightly curated own-brand assortment that allows scale economies to be shared with suppliers and customers. The team believes the store base can expand from around 3,500 today towards 15,000 over the coming decade while sales per store roughly double as fresh produce and meat are introduced. Those drivers could allow the company to deploy roughly $3.5 billion to $5 billion of incremental capital at returns on invested capital above 40%, with growth largely self-funded by negative working capital. Orbis believes the market is overly focused on near-term accounting noise and that the shares could produce double-digit returns over the next decade.