On February 25, Alsea reported Q4 2025 results that, at first glance, look pedestrian: revenue up 0.5% year-over-year to MXN 21.7bn, EBITDA up 2.9% to MXN 3.7bn, margin expanding 40 basis points to 16.8%. Decent, not spectacular. But the headline numbers obscure the real story. In January 2026, Alsea completed a full prepayment of its USD 500mm and EUR 300mm senior notes, replacing them with sustainability-linked MXN and EUR bank facilities. This is not a routine refinancing. It is a structural transformation of the income statement, and it changes how we think about Alsea’s earnings power from 2026 onward.
Our full Alsea equity research report, the first in our publication series, provides the complete financial model and valuation. What follows is our read on what the Q4 numbers and the refinancing mean together.
The refinancing rewrites the income statement
For the past two years, Alsea’s reported earnings have been distorted by a structural flaw: its largest debt obligations were denominated in USD and EUR while the majority of its revenue is generated in MXN. Every time the peso weakened against the dollar, the MXN-equivalent value of the USD 500mm bond swelled on the balance sheet, creating large non-cash FX losses that crushed reported net income. When the peso strengthened, the reverse happened, producing volatile, largely meaningless swings in the financing line. In FY2024, MXN depreciation from 16.92 to 20.51 per USD generated enormous FX losses. In FY2025, peso appreciation created a MXN 2.5bn non-cash FX gain, which is why net income nearly doubled to MXN 2.6bn. Neither year reflected true operating performance.
That structural mismatch is now gone.
On January 21, 2026, Alsea retired both bonds simultaneously and replaced them with two new facilities. In Mexico: a MXN 10.5bn club deal with a five-year bullet maturity at TIIE + 145 basis points. In Europe: a syndicated loan of up to EUR 550mm with a five-year amortizing structure at Euribor + 210 basis points. The old bonds carried fixed coupons of 7.75% (USD) and 5.50% (EUR). The estimated annual interest savings are approximately USD 25mm, which translates to roughly MXN 440mm at current exchange rates. Against FY2025 net income of MXN 2.6bn, that is a 17% uplift to the bottom line before any operational improvement.
Alsea debt structure, before and after January 2026 refinancing
USD exposure eliminated. FX mismatch resolved.
Source: Alsea BMV evento relevante (January 22, 2026), Q4 2025 earnings release. MXN equivalents at approximate prevailing rates.
Three things matter here beyond the rate savings.
First, Alsea’s Mexico revenues are now funded with MXN debt, and its European revenues with EUR debt. The currency mismatch that disfigured the income statement for years is structurally eliminated. This is not a minor accounting point. In FY2024, the MXN depreciation against the USD created non-cash FX losses that erased billions of pesos from the financing line. In FY2025, the reverse: a MXN 2.5bn non-cash gain. Neither figure had any relationship to Alsea’s ability to sell lattes and pizzas. From Q1 2026 onward, this noise disappears from the income statement, and investors will finally be able to evaluate Alsea on its operating performance alone.
Second, the maturity profile has shifted dramatically: at year-end 2025, 42% of total debt was maturing in 2026. That is the kind of concentration that makes credit analysts lose sleep. Post-refinancing, there is no major maturity cliff until approximately 2031. The average life of financial debt has been extended to more than four years.
Third, both facilities carry sustainability-linked terms, which opens the door to ESG-focused capital that was previously inaccessible. Alsea maintained its inclusion in the Dow Jones Sustainability Index in 2025, scoring 18 percentage points above the global restaurant sector average. The sustainability label on the new debt is consistent with that positioning.
Q4 tells a different story by region
The consolidated 0.5% revenue growth number is misleading because it blends three very different regional stories. The FX headwind is the culprit: excluding foreign exchange effects, growth was 12.0%. Overall SSS rose 3.3% in the quarter, with all three segments (QSR at 4.2%, FSR at 3.0%, and Starbucks at 2.9%) contributing positive traffic-driven growth.
Mexico was strong. Sales grew 7.9% to MXN 12.5bn, EBITDA margin expanded an impressive 210 basis points to 26.4%, and same-store sales rose 3.1%. The standout was the quick service segment: Domino’s Pizza delivered a notable recovery, driven by the “croissant pizza” innovation that originated in Spain and more than doubled management’s expectations when brought to Mexico. Starbucks Mexico posted 2.6% SSS growth, and full-service restaurants led with 3.8%. Mexico now contributes 57.5% of quarterly revenue and 67.5% of EBITDA, reinforcing its position as the earnings engine. The 210 basis point margin expansion in Q4 is particularly noteworthy because it demonstrates the operating leverage inherent in the Mexico business when SSS growth is positive: modest revenue growth on a relatively fixed cost base drops disproportionately to the EBITDA line.
Europe grew 5.0% in local currency terms but declined 1.2% in MXN terms due to EUR/MXN translation effects. EBITDA margin expanded an impressive 310 basis points to 18.7%. Spain continues to perform well across formats; France remains a drag, though pressure is diminishing. The divestiture of Burger King Spain in late 2024 and TGI Friday’s Spain in December 2025 reflects the ongoing portfolio simplification: management is systematically exiting low-return brand-territory combinations.
South America contracted 20.5% in MXN terms, though SSS grew 7.7% in local currency. The decline is almost entirely an Argentine peso translation effect. Colombia was the regional standout. EBITDA fell 22.9% to MXN 376mm, with margin compressing 40 basis points to 13.3%. South America is now only 9.4% of consolidated EBITDA, and while Argentina remains a drag, management flagged positive trends in SSS and expects margin recovery as FX stabilizes.
The remodel story the market is underappreciating
Innovation and store remodels are driving same-store sales in ways that are more durable than headline SSS numbers suggest. During the earnings call, CEO Christian Gurría Dubernard was explicit: remodelings are generating “significant same-store sales growth, particularly in Starbucks and casual dining,” with the investment focus spanning all geographies.
This matters because remodel-driven SSS growth has different economics than new-store growth. A remodeled Starbucks unit generates incremental revenue on an existing lease at a fraction of the capital cost of a new store opening. The return on invested capital from remodels is structurally higher than from greenfield expansion. Management confirmed at the March 2026 Investor Day that ROIC is now a formal target at 13% to 15%, the first time this metric has been disclosed as guidance. That range, if sustained, is well above the company’s weighted average cost of capital.
For FY2025, total CapEx was MXN 5.1bn, with 75.5% allocated to new units, renovations, and maintenance. Digital sales now represent 39.6% of total sales, reaching MXN 8.2bn in Q4 alone, up 13.4% year-over-year. The combination of physical remodels and digital channel growth is a compounding flywheel that is not yet reflected in the stock’s valuation.
Full year 2025: the operational baseline
Alsea revenue and pre-IFRS 16 EBITDA margin, FY2020 to FY2025
Source: Alsea earnings releases (pre-IFRS 16 basis). FY2020 estimated from growth rates.
Stepping back to the full year, FY2025 consolidated revenue reached MXN 84.1bn, up 9.1% year-over-year (9.2% excluding FX). Pre-IFRS 16 EBITDA was MXN 11.9bn, up 2.7%, with margin compressing 90 basis points to 14.1%. The margin compression was driven by higher dollar-linked input costs in Mexico and negative operating leverage in South America, partially offset by labor efficiencies and portfolio mix improvement.
Net income nearly doubled to MXN 2.6bn (EPS of MXN 3.19), but as noted above, this was heavily influenced by the non-cash FX gain. On a pre-IFRS 16 basis, net debt to EBITDA stood at 2.4x at year-end, up from 2.3x in 2024.
The unit count reached 4,820 across 12 countries, with 169 new units opened in 2025. Two new brand additions were announced: a development agreement with Raising Cane’s for Mexico (first unit expected H2 2026) and the Chipotle Mexico license. These are premium QSR brands with strong unit economics, and management emphasized that each is managed by dedicated teams to avoid distracting from core brand operations.
Free cash flow turned negative at MXN -1.2bn, the primary driver being the interest expense surge (MXN 4.5bn vs. MXN 2.8bn in 2024) as bond payments ramped ahead of maturity. To put this in context, the underlying operating cash generation was solid: EBITDA of MXN 11.9bn minus CapEx of MXN 5.1bn yields MXN 6.8bn of operating free cash flow before interest, tax, and working capital. The interest expense, not the operations, was the problem. This is precisely the problem the refinancing solves: with lower interest costs and the bond principal retired, FCF should swing robustly positive in 2026.
The portfolio simplification is also worth noting. Alsea divested TGI Friday’s in Spain, Chili’s in Chile, and P.F. Chang’s in Chile in December 2025, following the Burger King Spain exit in late 2024. These were consistently low-return brand-territory combinations. Exiting them concentrates capital and management attention on the high-return core: Starbucks, Domino’s, and the Mexico full-service portfolio. The addition of Raising Cane’s and Chipotle in their place represents a deliberate upgrade in brand quality.
The Starbucks license: asymmetric upside
Alsea has operated Starbucks in Mexico since 2002 and holds the license through 2035, secured after paying USD 50.3mm for full control of Café Sirena in 2013. The license is the crown jewel: Starbucks represents roughly 1,961 of Alsea’s 4,820 total units and is the highest-margin brand in the coffee segment.
The market periodically prices in license renewal risk despite the 2035 horizon. Our view is that this risk is asymmetric: the probability of non-renewal is very low given the 24-year operating relationship, Alsea’s track record of expansion and operational excellence, and the absence of a credible alternative operator in Mexico. But the periodic anxiety around renewal creates selling pressure that depresses the multiple. When the eventual renewal is confirmed, the relief rally could be meaningful because the market prices the risk but not the removal of risk.
In Q4 2025, Starbucks Mexico posted 2.6% SSS growth and continues to expand its store base (935 units in Mexico, 1,961 globally across 12 countries). Alsea also acquired the remaining 30% stake in Starbucks Colombia from Grupo Nutresa in 2025, consolidating full ownership of the brand across Latin America. The innovation pipeline, including store renovations and product development, suggests the brand is far from ex-growth. The coffee segment now accounts for over 1,960 of Alsea’s 4,820 total units, making Starbucks by far the largest brand by unit count and a critical driver of the company’s long-term growth trajectory.
What we are watching
Management’s 2026 guidance, released at the March 18 Investor Day in New York, calls for sales growth of 5% to 7%, SSS of 4% to 6%, and EBITDA growth of 6% to 8% with margins at or above 14.1%. At the midpoint, this implies roughly MXN 89.2bn in revenue and MXN 12.7bn in EBITDA. Net debt to EBITDA is targeted at 2.3x, down from 2.4x, confirming the deleveraging thesis. Unit openings are guided at 180 to 220, an acceleration from 169 in 2025, with Raising Cane’s and Chipotle contributing first units in H2 2026.
The guidance embeds an important signal: EBITDA growth of 6% to 8% on sales growth of 5% to 7% implies margin stability to slight expansion. Management is guiding for operating leverage despite continued wage pressure in Mexico and Europe. If delivered, this would represent the first year of EBITDA margin stabilization after the 90 basis point compression in 2025.
Our DCF-based valuation, detailed in the forthcoming equity research report, places fair value in the range of MXN 70 to 73 per share. At the time of our model completion, Alsea traded near MXN 58, implying 24% to 26% upside. The stock has since re-rated to around MXN 54 (as of reporting date), which, if anything, has widened the gap. The valuation assumes a WACC of 10.5% and gives no credit for the Starbucks license renewal, the new brand additions, or potential multiple re-rating as the cleaner income statement becomes visible in reported earnings.
The consensus view is already favorable: 13 of 19 analysts covering the stock have Buy recommendations, with only Goldman Sachs maintaining a Sell. But the consensus price target still reflects a pre-refinancing earnings trajectory. As Q1 2026 results demonstrate the interest savings and the elimination of FX noise, we expect the market to re-anchor to normalized earnings power.
The key catalysts from here are: Q1 2026 earnings, which will be the first quarter to reflect the full benefit of the refinancing in the financing line; the Raising Cane’s and Chipotle unit openings in H2 2026; and continued execution on the margin stability guidance. The five themes we outlined in our Five Trades for 2026 article included Mexico’s consumption recovery story. Alsea, as the largest multi-brand restaurant operator in Latin America, is the highest-beta play on that thesis.
The bottom line
The market is valuing Alsea on a distorted earnings history. The refinancing removes the FX volatility, lowers interest costs by an estimated MXN 440mm annually, eliminates the 2026 maturity cliff, and sets up a structurally cleaner income statement from Q1 2026 onward. At roughly 6.5x trailing EV/EBITDA on a pre-IFRS 16 basis, with 13 of 19 analysts at Buy, the stock trades at a discount to its five-year average multiple despite an improving operational trajectory and a de-risked balance sheet. The refinancing does not just change the balance sheet. It changes the earnings narrative, and that is what the market has not yet priced in.