Alsea: Starbucks Continues To See Headwinds In Europe

2025-03-09 05:55:19 ET

Summary

• Alsea's 'Hold' rating remains justified due to weak European performance, FX headwinds, and significant debt denominated in Euros and US Dollars.
• Despite 11.1% year-over-year sales growth in Q4 FY 2024, EBITDA declined in Europe and South America, pressuring overall profitability.
• Starbucks' European operations underperformed with a 7.4% decline in same-store sales, while Mexico showed modest growth.
• Alsea's EPS fell 74% year-over-year, reflecting higher debt costs and weaker EBITDA, maintaining the 'Hold' rating with no immediate catalysts in sight.

'Hold' Seems to Have Been the Right Approach for Alsea So Far

It’s been almost three months since I started covering the stock of this multi-operator of restaurants, Alsea (ALSSF). Time has passed, but it seems the message remains relevant....

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