Restaurant operator Alsea to boost investments 27% in 2024

By Kylie Madry

MEXICO CITY (Reuters) -Mexico's Alsea, which operates chains such as Domino's Pizza and Starbucks, plans to invest six billion pesos ($358.85 million) into the business this year, up 27% from 2023 spending, the firm's chief financial officer said on Wednesday.

Nearly half of that will go toward opening new locations, with 25% to be spent on maintenance, 15% on remodeling and another 15% on digitalization, CFO Federico Rodriguez said at the company's investor day event.

More than half of the spending will be concentrated in Mexico, Rodriguez added.

Shares in Alsea were up more than 3.5% in mid-morning trading.

Alsea is aiming to exceed 5,000 stores this year, CEO Armando Torrado said, which would mark nearly 9% growth if achieved.

"We operate more than 4,600 stores and our plan is to surpass the 5,000-store milestone by the end of the year," he said, adding that Alsea was anxious to become a "7,000-store company in the near future."

Torrado said Alsea has identified a "white space," or market opportunity, to open 2,460 more stores, with around half in Mexico, 30% in Europe and the rest in South America.

He noted that most of those planned stores would be Starbucks cafes, followed by Domino's, full-service establishments and Burger King restaurants.

"Rodriguez said the openings were planned over the next 10 years."

The CFO said Alsea expects revenue to grow more than 10% in 2024, with same-store sales up 7% to 9%. Most of that increase in same-store sales will be from increased foot traffic and orders, he said, with some coming from inflation-related price increases.

Core earnings, or earnings before interest, taxes, depreciation and amortization (EBITDA), should also grow more than 11% this year, Rodriguez said.

($1 = 16.7200 Mexican pesos)

(Reporting by Kylie Madry; Editing by David Alire Garcia and Bill Berkrot)