Tiendas 3B has more than 3,700 stores in central Mexico, opens roughly 150 more every quarter, and earns its money back on a new store in about two years. It is the Aldi model, built by a founder who saw BIM work in Turkey, moved to a country where he did not speak the language, and has spent 21 years compounding it. Alberto Vadia of Fruit Tree Capital thinks it is a hundred bagger from here.My problem is the price. The stock is approaching $50, it has run a ton, and the bulls I was reading a few months ago were underwriting it in the mid 30s. So I push Alberto on the thing that actually decides this: do the unit economics survive the move from 3,500 stores to 15,000, or does a two year payback quietly become a four year payback once they leave central Mexico? We also get into the two equity offerings from a business that self funds every store it opens, why every other hard discounter on earth stayed private, what Costco at 40 times earnings implies for a Mexican retailer, and whether adding fruits and vegetables is an expansion or a risk.This episode is sponsored by Trata: https://www.trata.com/tbbb. Trata is two buysiders who own the stock talking about what they are actually worried about. They have two calls on TBBB that I used to prep for this one, and you can hear a sample at the link.Chapters:

Intro

Sponsor: Trata

Alberto Vadia, Fruit Tree Capital

What is Tiendas 3B, and the Aldi playbook

Why they own it: no debt, management, compounding

What is the market missing?

The chicken and egg problem in hard discount

Private label, 900 SKUs, and beating Walmart on ibuprofen

The stock has run: have we missed it?

Why every other hard discounter stayed private

Costco at 40x, and the Mexico haircut

Do the unit economics survive stores 5,000 to 15,000?

The self splitting distribution center model

The equity offerings, and who was actually selling

No loss leaders, and the missing fruits and vegetables

Why is a Mexican category killer listed in New York?

The bare bones deck and the HQ visit