Good morning and thank you for joining us on our first earnings call of the year. Our first quarter results reflected a mixed operating environment.

While retail performance was impacted by weaker consumer demand and a number of temporary disruptions during the period, our financial services and real estate businesses once again delivered strong results, highlighting the resilience and diversification of our business model. Financial services delivered another quarter with double-digit revenue growth, supported by portfolio expansion and solid participation of our credit cards across retail sales, while real estate also posted solid growth, driven by a higher occupancy and continued progress in lease optimization.

In retail, the quarter began positively with a solid winter sale. However, as the period progressed, consumer spending remained cautious amid a softer macroeconomic backdrop, with customers continuing to prioritize promotional events and discretionary purchases remaining selective.

Additional operational and external factors also weighed on performance, which we will address in more detail shortly. At the same time, we remained focused on disciplined execution, expense control, and the stabilization of our logistics platform, while continuing to invest in capabilities that support long-term growth.

While near-term retail conditions remain challenging, we believe many of the temporary factors affecting the quarter are being addressed and expect underlying trends to improve over the coming months. We will now move to a detailed review of our quarterly performance.

Consolidated revenue for the first quarter totaled $45.4 billion, remaining broadly flat year-over-year. At the segment level, strong momentum in our non-retail businesses helped offset softer performance in retail.

Financial services delivered revenue growth of 11.6%, while real estate increased 4.4%. Retail revenue declined 1.9% during the quarter.

Within retail, excluding discontinued operations, commercial revenue declined 0.2%, reflecting softer consumer demand and heightened sensitivity to promotional activity. At the same time, our unified commerce strategy continued to gain scale, with consolidated digital GMV increasing 12.4% year-over-year.

After a strong start of the year driven by the winter sale, sales performance during the quarter was impacted by three main factors. First, the main headwind remained a cautious consumer environment amid a softer macroeconomic backdrop, with customers continuing to prioritize promotional events and discretionary spending remaining selective.

Second, as we continued advancing through the start-up of our new logistics facility, we experienced temporary operational challenges that affected the timely flow and store-level availability of our range of imported merchandise, creating pressure across selected categories, particularly apparel and shoes. For additional context, sales of imported apparel and footwear categories declined 20% versus the prior year during the quarter.

Third, performance was affected by the February security incidents centered in Jalisco and extending across the broader Pacific and Bajío regions, which resulted in temporary store closures for 2 to 3 days and the short-term suspension of certain supply chain activities. Beyond these direct effects, the incidents also weighed on consumer sentiment through the following weeks.

In addition, quarterly comparisons were demanding across both Liverpool and Suburbia, following growth above 7% in the prior year period. At Suburbia, top-line performance was also affected by the decision to defer its mid-season sale to April, better aligning promotional activity with product availability.

While conditions have since normalized and corrective actions are in place, we expect a gradual recovery in operational momentum in the coming months. As a result, same-store sales declined 2.5% for Liverpool and 3.1% for Suburbia, driven primarily by lower traffic, partially offset by higher average ticket.

Category performance in Liverpool was led primarily by consumer electronics, including computing, cellular, and TV, as well as appliances and cosmetics. Home and apparel categories remained under pressure.

Digital penetration reached 31.4%, representing a 3 percentage point increase year-over-year. Marketplace continued to provide incremental scale, with GMV increasing 12.5%.

At Suburbia, growth in hardlines, particularly motorcycles and electronics, partially offset weakness in women's apparel. Digital share reached 7.8%, representing an expansion of 160 basis points year-over-year, while digital GMV increased almost 15%.

Underlying retail gross margin performance remained strong, with margin excluding logistics costs increasing 140 basis points year-over-year, supported by disciplined merchandise management, including inventory control, promotional execution, and a more favorable exchange rate environment. Results also benefited from Suburbia's decision to defer its mid-season sale to April, which provided a temporary margin tailwind during the quarter.

These benefits were partially offset by category mix pressure resulting from the delayed arrival of certain imported goods. As a result of the previously described logistics challenges, during the first quarter, we incurred approximately 150 million pesos in one-time expenses aimed at ensuring operational stability and service continuity across the supply chain.

This amount was above our original expectations. Looking ahead, we now expect to incur an additional approximately 100 million in one-time expenses over the coming months, bringing the total estimated impact for 2026 to approximately 250 million pesos.

Even after these incremental logistics costs, reported retail gross margin reached 30.9%, representing an increase of 70 basis points year-over-year, as the temporary logistics headwind only partially offset the benefits of strong merchandise execution and cost discipline. Consolidated inventory increased 9.9% year-over-year, or 6.6% excluding in-transit inventory.

This was partially driven by a deliberate increase in consumer electronics inventory to mitigate potential supply constraints in chip-dependent categories and prepare for expected demand peaks associated with the upcoming World Cup. Despite this strategic build, overall inventory levels remained healthy and aligned with going-forward demand, supported by enhanced planning and assortment management.

Meanwhile, our financial services segment continued to deliver strong results during the first quarter, with revenue increasing 11.6% year-over-year, primarily supported by a 10% expansion in the gross credit portfolio and higher usage of our credit cards as a preferred payment option. This performance reflects the continued strength of our commercial integration strategy, which has increased the participation of our proprietary credit cards across retail channels.

At Liverpool, sales financed through our own credit cards represented 51% of total sales, an increase of 190 basis points year-over-year. Suburbia also recorded an improvement of 280 basis points, reaching 35%.

In parallel, we continued to strengthen our broader financial ecosystem through the expansion of additional financial services, digital capabilities, and customer engagement initiatives, further reinforcing card usage and loyalty. As a result, our active customer base increased 8% year-over-year, reaching 8.7 million cardholders.

Effective this quarter, reported figures now include Minipagos within the active base, providing a more comprehensive view of the scale and reach of our credit platform. Minipagos is a fixed installment financing product designed for Suburbia customers, enabling purchases across both physical and digital channels through biweekly or monthly payment plans.

Unlike traditional revolving credit products, it operates under an independent payment structure and does not include interest-free installment features. Its inclusion reflects the continued diversification of our credit offering and our focus on expanding access to financing across a broader customer base.

Credit portfolio performance during the quarter remained aligned with our growth strategy. The non-performing loan ratio reached 4.4%, increasing 70 basis points year-over-year, in line with expectations and reflecting both seasonal dynamics and the continued expansion of the portfolio.

Risk metrics remained solid, supported by a conservative provisioning approach. Reserve coverage improved to 11.4%, up 130 basis points, while reserves covering non-performing loans stood at 2.8 times.

In this context, credit loss provisions totaled 1.5 billion pesos for the quarter, increasing 25% year-over-year. This was mainly driven by portfolio growth, the higher level of non-performing balances, and our prudent reserve methodology.

Despite this higher provision expense, the financial services business continued to deliver strong profitability, supported by healthy revenue growth and resilient operating trends, while our portfolio continued to expand under a disciplined underwriting framework that balances growth opportunities with prudent risk management. Our real estate division continued to deliver solid performance during the quarter, with revenue increasing 4.4% year-over-year.

Results were primarily supported by higher occupancy levels across the portfolio, together with ongoing lease renewals and repricing initiatives that continue to enhance the revenue profile of our assets. Portfolio occupancy reached 94.6%, representing an increase of 200 basis points versus the prior year, reflecting resilient tenant demand and the quality of our commercial locations.

We continued to optimize lease structures and tenant mix, supporting asset productivity and sustainable rental growth. Consolidated gross margin for the first quarter reached 41.7%, representing a year-over-year increase of 160 basis points.

Performance was supported by favorable business mix dynamics, including a higher contribution from financial services, as well as benefits from inventory discipline, promotional execution, and exchange rate tailwinds. These factors were partially offset by the previously discussed logistics inefficiencies and a less favorable merchandise mix within retail.

Operating expenses, excluding loan loss provisions, depreciation, and amortization, increased 6.2% during the quarter. The main drivers were higher personnel and service-related costs, reflecting wage inflation and labor-intensive operations.

At the same time, expense control initiatives continued to mitigate these pressures and moderate the pace growth versus prior quarters. Including provisions, depreciation, and amortization, total operating expenses increased 7.5%.

As a result, EBITDA for the quarter totaled 5.1 billion pesos, representing a year-over-year contraction of 6.2%. EBITDA margin stood at 11.3%, with a negative variation of 70 basis points versus the prior year period.

Turning to Nordstrom, as a reminder, the recognition of our investment within our quarterly reporting cycle follows a 1-3-3-5 months schedule in order to align our respective financial calendars. Under this methodology, our first quarter results incorporate Nordstrom's February performance only.

During the period, Nordstrom reported top-line growth of 4.9% year-over-year, while adjusted EBITDA margin reached 2.1%, representing an expansion of 110 basis points versus the prior year. Beginning this fiscal year, reported results also reflect additional depreciation associated with the fair value step-up of certain fixed assets, consistent with customary purchase accounting treatment in transactions of this nature, commonly referred to as pushdown accounting.

Under this approach, selected assets are adjusted from historical book value to fair value, resulting in incremental non-cash depreciation charges of $35 million during the period. Reported net loss for the quarter totaled $41 million.

Excluding the previously mentioned non-cash accounting effect, adjusted net loss was $14 million versus a net loss of $27 million in the prior year period, reflecting continued progress in underlying operating performance. In our financial statements, this performance was recognized through the results of associates line, contributing to a loss of approximately 168 million pesos for the period, including Nordstrom's reported results together with certain minor timing and accounting adjustments.

In addition, we received a dividend payment of $9.3 million in March, recorded within the Nordstrom investment line and representing a cash inflow during the quarter. We currently expect additional dividend distributions of approximately $28 million over the balance of the year, continuing to support the overall return profile of this strategic investment.

Non-operating performance during the quarter reflected net financial expenses of 1 billion pesos. Year-over-year performance benefited from improved foreign exchange results, reflecting lower currency volatility, partially offset by higher net interest expense due to the lower average cash balances following the Nordstrom acquisition and a lower interest rate environment.

After incorporating these non-operating effects, consolidated net profit totaled 1.9 billion pesos, representing a decrease of 17% versus the first quarter of the prior year. CapEx for the quarter totaled 1 billion pesos, representing a 55% decrease versus 2025.

The reduction primarily reflects the near completion of the Arco Norte logistics center, together with the conclusion of various expansion and remodeling projects. Capital deployment continued to follow a disciplined allocation framework during the quarter, with investment primarily directed toward expansion and remodeling initiatives, the final phases of our new logistics facility, and new store openings, enhancing our operating platform and supporting profitable growth.

Operating cash flow during the quarter totaled 572 million pesos. The balance sheet remained strong, with cash and cash equivalents closing the period at 22.8 billion pesos.

Net leverage stood at 0.6 times net debt to past 12 months EBITDA, reflecting a conservative capital structure and providing ample financial flexibility to support strategic initiatives and ongoing operations. As previously announced, on March 12th, proceeds from our recent bond issuance were applied to the early repayment of the bond originally maturing in October 2026.

In relation to shareholder returns, a dividend of 2 pesos and 95 cents per share was approved at the ordinary stockholders' meeting held on April 14th, equivalent to 23% of 2025 net profit, compared with a payout of 17% of 2024 net profit in the prior year. This increase reflects the strength of our balance sheet and our continued commitment to a balanced capital allocation framework.

This dividend will be distributed in two installments. The first payment of 1.77 per share is set to be made on May 22nd, with the second payment of 1.18 per share scheduled for October 9th.

In summary, our first quarter results reflected the resilience of our diversified business model. While retail performance was impacted by weaker consumer environment and temporary disruptions during the period, our financial services and real estate businesses continued to deliver solid growth.

We remain focused on disciplined execution, the continued stabilization of our logistics platform, and the advancement of strategic initiatives that support long-term value creation. We appreciate your continued interest, and will now open the call for your questions.

Hi, everyone. Thank you for taking my question.

Gabriela Leme from Goldman Sachs here. I would like to explore a bit more the same-store sales trend this quarter and how that translates to you for your guidance.

You mentioned a soft consumer demand, operational challenges with imported merchandise, and the security incidents. Could you help us disaggregate the relative impact of each of these factors?

Also, as we go into the second quarter, is there any early indicators of a better demand trend, or do you see the full year 2026 guidance as achievable? Then my second question is also into the demand trend, how you're thinking about the seasonal events such as Mother's Day and World Cup?

You mentioned the mid-season sale for Suburbia was deferred to April, which helped the retail margins. Do you have any early feedback of this mid-season sale in April, and how should that impact your retail gross margins in the second quarter?

Thank you.

Thank you, Gabriela. Let me start with same-store sales.

We would not characterize the quarter as a structural change in Liverpool's competitive position. Performance was driven by a combination of temporary and external factors that affected overall traffic.

As I mentioned, the consumer environment remained cautious and customers concentrated their spending around promotional events. Second, we faced temporary logistics-related availability issues in certain imported categories, particularly in apparel and footwear.

Third, results were measured against a demanding comparison base. As a reminder, Liverpool reported 7.9% growth in the first quarter of 2025, while Suburbia reported 7.1%.

Comparison doesn't help. At the moment, we are not providing an exact figure between each of these events.

Now regarding the seasonal events, we think that these temporary items that affect our internal operations are already behind us, we're optimistic on the seasonal events. Talking about the Suburbia mid-season sale, we expect an uptick in sales during April once this promotional event is executed, and a minor contraction in Suburbia's margin.

Perfect. Thank you.

Hi, I'm Melissa Byun from Bank of America. I just wanted to ask if you could expand on the supply chain issues that impacted imports.

What happened and I just wanted to confirm as well that the issues have been fully resolved, and if so, when did that happen? Then just to confirm again on the margin impact that you anticipate for the second quarter, I think you mentioned a minor contraction at Suburbia, but maybe if you could be a little more specific.

Then how much of the first quarter gross margin expansion was more temporary or related to the timing of the promotional campaign? Thank you.

Thank you, Melissa. Let me start with the logistics.

The situation was primarily related to the start-up phase of our new logistics facility. We experienced some temporary issues in the execution of our imports operation that impacted the timely distribution of certain imported merchandise to the stores.

As a result, the availability in some categories, particularly apparel and shoes, was affected throughout the first quarter. Our view is that this is not a structural capacity issue, nor did it involve any material asset damage.

It was mainly an operational ramp-up matter that are typical of a project of this size and scale that temporarily impacted productivity and the service levels to the stores. Given that this has started happening at the end of January during the quarter, we had the opportunity to implement corrective actions focused on things like workflows, systems fine-tuning, inventory prioritization, and some additional operating resources to support overall throughput and store replenishment.

As of today, operating conditions have improved materially and service levels have mostly normalized. Merchandise flows are significantly more stable now than what we witnessed during February.

In that sense, we believe the most significant disruptions are already behind us. Now regarding margin, we remain optimistic on our gross margin outlook because the logistics issue affected margin in two fronts.

On the one hand, some out-of-stocks created pressure on sales, particularly in clothing categories, the overall apparel and footwear. Second, the delayed imported merchandise reduced the availability of fresh product at the store, which typically increases the average margin.

As the logistics become more stable, both merchandise availability and margin execution should improve. Now talking about Suburbia, keep in mind that Suburbia is relatively low in the consolidated gross margin, our expectation is an uptick in sales with a minor impact in the consolidated margin.

Thank you.

Hi, thank you. Thank you very much for taking my questions.

Good morning. A follow-up on the operational challenges on availability of imported merchandise.

What was behind that? We understand the ramp-up issue on your side, but what happened to the specific category of imported merchandise?

Also on the expenses to maintain the supply chain continuity, could you provide more color on what specifically drove the 150 million pesos of non-recurring expenses? Was this for expedited freight, alternative routing, enhanced security?

Should we expect the same mix for the coming additional expenses? Also could you please share more details on the state of the bottlenecks on imported merchandise?

Thank you.

Thank you, Héctor. Let me start with the logistics.

The logistics facility is not a single operation. It's a very complex operation that has numerous operations under the same roof.

As I previously communicated, about 80% of the operation migrated from the old facility to the new one. If you take a closer look at the 20% that was in the previous warehouse, one of those operations was the managing of the imported merchandise.

We migrated the imported merchandise operation from the previous facility into the new one. Given the size of the scale of this type of operations, we had some temporary inefficiencies on that operation that, in turn, caused the timely flow of merchandise to the store.

It's not the whole facility, it's an item specifically related to the imported merchandise management that migrated from the previous warehouse into the new one. On the one-time expenses, your sense is correct.

It's a combination of increased labor and increased freight. The freight occupancy during the period was lower than it usually is in order to maximize the speed of flow of merchandise to the stores.

Also, we increased overall labor to increase the overall capacity of that operation.

Thank you. Thank you very—sorry, sorry.

Oh, sorry. I was going to say that our outlook for the additional 100 million is the final stages of this operation as merchandise flows to the stores gets normalized.

Understood. Thank you.

Thank you very much.

Also

on the financial business, we saw the solid revenue growth there, and you also had the increase in NPLs and loan loss provisions. You noted that this is within the projected levels and reflects portfolio expansion and seasonality, but considering the softer macro and the cautious consumer that you are seeing, are you noticing any underlying deterioration in consumer credit health?

Have you tightened or do you plan to tighten your underwriting and origination standards in the coming quarters? Also, I know that maybe it's too early in the year, but how high is your conviction about your guidance for the year, particularly on the EBITDA margin range?

Let me start with the financial business. We have a very prudent risk management profile.

I don't think our appetite overall has changed. We have seen some early warnings about deterioration of the portfolio, and that's why we have increased our loan loss provisions.

As long as we can balance the loan loss provisions with the growth and the profitability of the portfolio, and as long as we continue to increase NPLs slightly below 2019 levels, I think we will continue with our current plans. Now talking about the full year guidance, at this stage, it's too early to reassess the full year guidance based on the first quarter performance alone.

While results for the quarter were affected by a number of temporary factors that I already discussed, the year is still in its early stages, and important commercial periods remain ahead. We will continue to monitor those operation trends, including the normalization of our logistics performance and our upcoming promotional events, and we will provide updates in future communications.

Very, very clear. Thank you.

Thank you very much.

Hi, yeah, good morning. This is Ben Theurer from Barclays.

Thank you. Thank you for taking my question.

Just a two quick follow-ups. We've talked obviously about the challenges in the first quarter, but as we look ahead and we're seeing globally increased freight cost, transportation costs, etc., and you've pointed out a couple of issues here in the first quarter, these incremental 100 million you've just talked about.

I wanted to understand a little bit as it relates to just availability of importing goods that particularly come from overseas and the challenges on freight availability, ships, vessels, etc. How much of an impact do you guys expect in terms of sourcing some of the merchandise that you need, particularly in light of the issues that you had in terms of availability in the first quarter?

That would be my first question.

Thank you, Ben. The overall global constraints regarding logistics has had only a minor impact on our operations.

I would say that these temporary issues are more related to our domestic operations rather than the overall global transit between our contract manufacturers in Asia and our shipments to Mexico. That's why when I talked about inventory, one of the impacts on the supply chain is that there's a difference between the inventory that is held at the stores versus what is held in transit because it reflects that the merchandise was in our warehouse, but the overall timing of the transit between the main warehouse and the stores was increased, it's a domestics logistics issue, not an international logistics issue.

Understood. Then just following up as well and digging a little bit into some of the digital ecosystem and some of the growth rates.

Was there any particular reason for some of the lower GMV versus last year as well? Wanted to understand a little bit what's been driving down some of the deliveries in short term, etc.

It feels like there's a little bit of a shift in consumer behavior. Just understanding the drivers behind, a, the third-party sales within the ecosystem of Liverpool, but then also the specific stuff around your deliveries, direct deliveries, Click & Collect, etc., what are consumers currently shopping for?

Let me start with overall GMV. Given our unified commerce strategy, there is no clear distinction between our physical channels or our digital channels.

One of the reasons why GMV decreased is also the availability of imported merchandise. Keep in mind that most of our soft lines are shipped directly from the store, if we have constraints on imported merchandise, it not only hurts our physical sales, but also our digital sales, as the same constraints apply to both channels.

One of the advantages of to have a unified commerce strategy is that we're able to attract customers and serve customers through several means, and the other way around happens when we have this type of issues. I would say our view is that most of our reductions in things like Click & Collect and overall GMV contraction is directly related to this type of issues and the overall economic backdrop.

Got it. Thank you very much.

Thank you, Ben.

Thank you, operator. Alejandro Fuchs from Itaú BBA.

Hola Gonzalo, Jose Antonio, Enrique. Thank you for the space for questions.

I wanted to see, Gonzalo, if maybe you can share your thoughts about the Nordstrom operation, what do you expect maybe for the year, if anything that you have talked to the team in the US. I think that would be also very helpful.

Thank you.

Thank you, Alejandro. Overall, we're very happy with the investment and the way their results are coming in.

As I said, for the first month of their fiscal year, top line grew almost 5%, which is high for US standards, EBITDA is improving, and EPS would be also increasing if you exclude this adjustment on overall depreciation. Overall, we're very happy with the investment and it's coming in slightly above expectations.

As we do not provide a guidance of the yearly Nordstrom results, but what I can tell you is that last quarter, we reported almost a 2 billion pesos benefit on El Puerto de Liverpool's results due to the Nordstrom operation, which was mostly offset by this PPA adjustment. If you consider those almost 2 billion pesos for the quarter and do a projection, that can give you a range of what is our expectation for the full year 2026.

Super clear, thank you, Gonzalo. Maybe if I can just follow up very quickly, coming back to Mexico, obviously, as you said, things on the consumer front are being a little bit, let's say, weaker maybe to start the year.

I wanted to touch maybe on competition in Mexico both online and at the store. Anything that is worth highlighting that you've seen that is different to start the year in terms of competitive environment, anything that caught your attention during the quarter, I think that could also be very helpful.

As retail space in Mexico is very competitive and we are competing against formidable players who are really good at what they do. At the moment, we haven't seen a significant change during the first quarter, and we do not believe our first quarter performance represents a share erosion from us rather than this combination of external and internal factors.

Even though the overall economic backdrop is not great and we see the consumer environment remains very cautious and very focused on promotions, we continue to see overall resilience in employment levels, formal wage trends, and overall credit usage, which provide underlying support to consumption. We are seeing also a healthy performance around promotional events and in categories tied to technology, appliances, and beauty.

We expect demand conditions to remain mixed in the near term with a gradual improvement as the year progresses, assuming a stable macroeconomic backdrop. The only thing that I would add is that our focus remains on execution and maintaining flexibility to respond to this type of things.

Super clear. Muchas gracias, Gonzalo.

Gracias, Alejandro.

Hi, good morning. Thanks for taking my question.

Just a quick one regarding the Minipagos that is now being included in your base. Is this because of a shift in your strategy or maybe you're promoting more this type of financial services?

Any color on that? Thanks.

Thank you, Antonio. No, I think we are starting to report it externally because it reached the 200,000 customers, we believe now that it's large enough to be reported as part of our current portfolio rather than an initiative.

It's kind of being graduated from a project into our base. Talking about customers, we are excited about this Minipagos.

This is a product that was tailor-made. It was designed for Suburbia customers that is enabling purchases across our unified commerce platforms.

What's interesting is that it does not include interest-free installment features, it has a different credit profile than our current credit cards. Given the milestone that was reached during the first quarter, that's the reason why we started reporting it.

Thanks. Given this macro backdrop that you've been mentioning, do you see maybe consumers more willing to enter into these type of agreements?

I think there are some signals in the economic backdrop that are encouraging, like overall employment and wage increases, but also credit usage. As one of the relevant players in that space, credit usage also translates to us in higher credit usage, which provides support to overall consumption.

Thanks a lot. Have a nice day.

Thank you.

Hey, good morning, Alvaro Garcia from BTG Pactual. Couple questions.

First, just kind of like a housekeeping thing on the number of Liverpool Express and the number of boutiques. There we saw a pretty significant shift there just maybe you reclassified some in the press release, there was a big uptick there.

Then on the consumer environment, obviously it's been discussed a lot this call, but I was wondering if you could maybe provide some color from a geographic standpoint. We've had a lot of feedback about same old sort of performance in the north and specific weakness in the south, including tourist zones, which maybe wasn't the case in the past.

Any sort of color on sort of your performance by geography would be greatly appreciated. Thank you.

Thank you, Alvaro. From a footprint expansion, we have been opening Liverpool Express, we're committed to the new format.

We think it's very convenient for the customers and it's helping us reach a number of customers that were not necessarily included with our previous footprint, and that's why we have opened so many of them. Yes, in the last quarter, we went from 44 to 69 locations.

In terms of the specialized boutiques, we have also opened a few of these boutiques to expand the reach of the portfolio, and that's why you see an uptick on the number of specialized boutiques. Now talking about geographic standpoint, during the quarter, the security incidents that happened in February affected primarily the state of Jalisco, but it had an impact on the overall Pacific states and the overall Bajío region.

It wasn't only the store closings of 2 to 3 days, but also that it had a continuous effect throughout the following weeks, where we saw a reduction in overall consumption. That has been reflected in some of the tourist parts.

If you've been following the hospitality industry, there are a number of reports indicating some warning signs, and I think that reflects also in consumption in some of these areas. Also you mentioned the south.

I think where there was an oil and gas industry presence in some parts of southern Mexico, we have seen some reduction in overall demand for a number of quarters as of today.

I guess just one last follow-up would be, you've repeated on the call today about how you don't think this is reflective, this quarter's results are reflective of sort of structural share losses or share losses in general. It's very specific to all the items discussed on the call.

Have you, could you, I'm sure you have internally, but would you be able to share could like quantify, the the one-off impacts on this quarter from a sales standpoint? That would be helpful.

If you can't, totally understandable, but if you if you maybe could give a sort of what a pro forma sales number would look like in your mind, that would be helpful. Thank you.

We're not providing that type of details. We have some internal estimations, but we're not in a position to share them internally.

What I would say is that we're optimistic about the upcoming quarters, and we do not expect these internal issues to hinder our ability to serve customers in the upcoming months.

Figured that would be the answer, but thank you very much in any case. Thank you.

Thank you, Alvaro.

Hi everyone. Good morning.

Thank you so much for taking my question. Here Renata Cabral from Citi.

My question is a follow-up related to Arco Norte, as the investment cycle has been concluded. What we can expect in terms of efficiencies, and if you have KPIs that we should look structurally for now on to see the company capturing that would be really great.

Thank you.

Thank you, Renata. We see our Arco Norte facility as a key piece to our overall network in the upcoming years.

It's a very large and very complex operations, in the short term, we're focused on stabilizing the operations that we already have in there. As you can imagine, most of our attention has been directed to optimize the imported merchandise operation and ensure timely flows into the store.

I think we will be in a position to start working on efficiencies regarding overall labor freight and store availability within the upcoming months, but we're not providing a guidance on specific KPIs.

Thank you so much for the call.

Thank you.

Emiliano Hernández from GBM. Good morning, Gonzalo.

Thanks for the space for questions. Just to follow up on the Nordstrom question, as you approach the 1-year mark since the stake acquisition, what key learnings have emerged and how are you incorporating them into Liverpool particularly?

Anything material on e-commerce, loyalty, or supply relationships there? Also somewhat repetitive, but on same-store sales, can you talk about how April is trending so far, just to confirm that you're seeing sequential improvement there?

Thank you.

Thank you, Emiliano. Let me answer the Nordstrom question first.

We have been doing a lot of benchmarking regarding a number of operations, but at the moment, we have not had any significant effect on either Liverpool or Nordstrom due to these factors. It's a long-term initiative, we do expect some benefits, but nothing material as of this first quarter.

Regarding same-store sales in April, our Venta Nocturna event is just finished, and we're going through the process of analyzing those results. As I said, we're optimistic about our future performance given that our internal issues are mostly behind us.

Great. Thank you, Gonzalo.

Thank you.

Good morning and thank you very much for taking the question. It's Joe Thomas here from HSBC.

Two questions my side. On the real estate business, occupancy is up despite the consumer environment being weak.

Can you perhaps just help us square that circle and understand what's going on there? Are you having to give better terms?

Is there a risk that it could deteriorate in future? That'd be the first question.

Then the second question regards inventory risk. Obviously up 9.9% in the quarter.

I just wonder how exposed you might be now in a weak consumer environment to having to discount that more heavily? Thank you.

Thank you, Joe. In the real estate, I think it's a reflection of our overall commercial effort.

As we have 30 prime locations that are very attractive to the market and provide a very good options for tenant customers to come in and establish themselves in those locations. Our view is that it's a function of our overall attractiveness and the quality of our assets, and we're not seeing a decreasing trend on overall tenant appetite.

Now turning to inventory, part of this inventory increase is completely deliberate, particularly in consumer electronics inventory. We were forecasting some constraints in chip-dependent categories, like computers, and also we expect a temporary demand peak associated to the World Cup.

In order to prepare ourselves, we did an overall inventory increase in those categories in order to be prepared to satisfy that type of demand. At the moment, we're not worried about the overall health of the inventory.

Thank you. Just to clarify that, the inventory build is not really related to the disruption in the distribution facility?

It's really planned for already?

I would say there's a portion of both. However, none of them is material enough to represent a significant risk on our future margin.

Thank you.

Thank you, Joe.

Hi, Andrew Ruben from Morgan Stanley. Thanks for fitting in the question.

Most have been answered. I guess just to get your latest thoughts on capital allocation.

We saw there was the approved dividend and the payout to about 20% of net income. Now that you're past, I guess, the peak Arco Norte spend, also funding the Nordstrom stake acquisition, I'm curious a sense of updated capital allocation priorities and what you would need to see to consider perhaps a greater dividend payout in the coming years?

Thank you.

Thank you, Andrew. Every year, we we assess our current position, the strength of our balance sheet, and our commitment to maximize inventory investor investor return.

That's why we decided to maintain the dividend in pesos per share, which translated into an increase of last year of last year EPS. Our our our view regarding capital allocation is that we want to to balance shareholder return and to provide the company with enough balance sheet flexibility to to be able to to support potential business expansions and support the current business.

That that's a discussion it's a complicated discussion that we have on on a yearly basis, and that's why as a result of of those discussions, we decided to to increase the dividend to 23% of the previous year's earnings.

All right. Thanks very much, appreciate it.

Thank you, Andrew.

Thank you for your interest and for joining us today. We appreciate your continued interest and support, and we will look forward to speaking with you in the next quarter.

Good day.