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Operator: Good morning. My name is Gabriel, and I will be your conference operator. [Operator Instructions] This is Liverpool's Fourth Quarter 2025 Earnings Call. [Operator Instructions] Today, we have with us Mr. Gonzalo Gallegos, Chief Financial Officer; Mr. Jose Antonio Diego, Treasury and Investor Relations Director. Mr. Enrique Grinan, Investor Relations Officer; and Ms. Nidia Garrido, Investor Relations. They will be discussing the company's performance as per the earnings release for the fourth quarter 2025 issued yesterday, Monday, February 23. If you do not receive the report, please contact Liverpool's IR department, and they will e-mail to you or you can download it from the IR website. To ensure focused discussion, this call is for investors and analysts only. I will be taking questions exclusively from them. Any forward-looking statements made during this earnings call are based on information that is currently available. They are subject to risks and uncertainties that could cause actual results to differ materially from the expectations and assumptions discussed today. This may be due to a variety of factors, including the risks outlined in El Puerto de Liverpool's most recent annual report. Please refer to the disclaimer in the earnings release for guidance on this matter. I will now turn the call over to Mr. Gonzalo Gallegos.
Gonzalo Gallegos: Good morning, and thank you for joining our fourth quarter earnings call. During the quarter, our portfolio continued to demonstrate resilience with financial services and real estate, delivering strong contributions that supported overall revenue growth, even as the Commercial segment operated in a more cautious consumer environment. The market continues to face headwinds with customer activity still largely driven by promotional events. In this context, we have maintained focus on operational discipline and the levers within our control that support our long-term priorities. Consistent with recent quarters, performance has been supported by sustained top line growth, improvement in commercial margin, excluding logistics costs, disciplined inventory management and the strong and profitable momentum in our Financial Services division. We will now talk through the financial and operational results for the quarter and the full year 2025. As you know, we released preliminary results on February 3, to reflect recent developments ahead of our debt capital markets transaction, the following day. I'm pleased to confirm that the final figures were in line with those preliminary disclosures. During the fourth quarter, consolidated revenue reached MXN 79.1 billion, representing a 5% increase year-over-year. This performance reflects the resilience of the portfolio with all business units contributing to growth while stronger performance in financial services and real estate helped offset a more moderate pace in retail amid a challenging economic backdrop. On an annual basis, consolidated revenue increased 6.7% to MXN 229 billion. The Financial Services segment was a standout performer with revenue expanding by 13.6%. The result is a direct consequence of the portfolio expansion strategy executed throughout the year. Similarly, the Real Estate division delivered a strong performance, posting a 6.7% increase in revenue. Meanwhile, retail operations contributed to the quarter's momentum with a 4.3% growth rate. The Commercial segment reported a 4.3% increase in revenue for the period. Performance was supported by the strong execution of the Buen Fin campaign, which helped offset softer results during the Venta Nocturna events. Top-performing categories included electronics, women's and men's apparel, cosmetics and sports. These results reflect our ability to sustain top line performance through disciplined promotional execution in a competitive environment and amid a more selective promotion-driven customer base. Within this landscape, Liverpool reported a 3.3% increase in same-store sales for the quarter, outperforming the broader industry benchmark as reflected by ANTAD's 2.1% growth in the department stores category. This performance was primarily driven by an improvement in average ticket value, partially offset by a reduction in traffic. Meanwhile, Suburbia same-store sales increased by 0.5% during the quarter, also exceeding the entire benchmark of 0.4% for the apparel and footwear category. Performance reflected a more cautious consumer backdrop with its core customer base, which tends to be more sensitive to inflationary pressures and shifts in discretionary spending. Despite the competitive environment and softer demand during the traditional [indiscernible] and Black Day events, the segment sustained a positive momentum through targeted promotions and disciplined inventory management. Retail margin performance in the quarter continued to reflect elevated logistics expenses associated with the migration of our new Arco Norte facility. Excluding these costs, margin contracted 18 basis points year-over-year. Importantly, this reflects a net sequential improvement of 245 basis points since the start of the year, consistent with the recovery we had anticipated and previously communicated. This progress has been supported by a more disciplined promotional strategy, the benefits of a favorable exchange rate and a continued focus on efficient inventory management. Including logistics expenses, reported margins stood at 32%, representing a contraction of 1 percentage point. For additional color, quarterly results include approximately MXN 561 million in onetime logistics expenses related to the transition to our new Arco Norte softline facility. On a cumulative basis, margins have absorbed approximately MXN 1 billion in transition-related costs, about MXN 200 million below our original estimate. This impact has been partially offset by a reserve established for this purpose covering about half of the total amount and resulting in a net effect of approximately MXN 500 million. As previously communicated, the most complex parts of the operation have already migrated to the new facility, and we're in the process of completing the transition of the remaining operations over the coming months. As we progress through the startup of this complex platform, we identified additional support needs to ensure operational stability and service continuity. As a result, we now expect to incur approximately $100 million in incremental onetime expenses during the first half of 2026. These additional costs are separate from the previously disclosed transition-related expenses and are intended to support the ongoing stabilization of the operation as it reaches full maturity. Consolidated inventory levels increased by 6.3% year-over-year, with a notable improvement in the Suburbia segment, which reported a 4.4% reduction versus last year. Inventory remains in a healthy position, supported by a more balanced promotional calendar and controlled levels of obsolete stock. This reflects continued progress in our inventory reduction efforts to improve demand visibility and more focused category allocation. The continued progress of our unified commerce strategy was reflected in the performance of our digital channels with total GMV increasing by 18.2% year-over-year, reflecting consistent growth across platforms. Within the Liverpool banner, digital share reached 32%, representing an increase of 3.3 percentage points year-over-year, supported in part by growth in the Pocket app user base of 18%. Suburbia also showed continued progress with GMV increasing by 20%, driving digital share to 8%, an expansion of 129 basis points. Over the same period, the Suburbia app user base grew by approximately 11%. Marketplace continued to strengthen our product offering, delivering an 18.5% year-over-year increase. This growth reflects ongoing efforts to expand the platform's reach while maintaining close alignment with our core retail assortment. Key operational drivers include a 22% increase in SKU count and a 12% rise in the number of active sellers. Importantly, this strategy has not only supported marketplace expansion but has also contributed to the continued growth in the sales of our own merchandise, underscoring the complementary nature of the model and its role in enhancing our overall digital ecosystem. Operational efficiency continues to be supported by a focus on customer convenience and proximately based inventory management. Click & Collect orders accounted for 42% of total Liverpool digital orders. Delivery speed continues to improve across our logistics network. During the period, 48% of digital orders were fulfilled within 48 hours, representing a same percentage point increase compared to the previous year, positioning merchandise closer to the customer has enhanced fulfillment, flexibility. Ship-from-store deliveries accounted for 40% of total orders, an improvement of 3.3 percentage points year-over-year. This reflects the growing role of our store network in supporting faster and more efficient order fulfillment. Meanwhile, our Financial Services segment delivered strong performance during the period, with revenue increasing 13.6% year-over-year, supported by an 11% expansion in the credit portfolio and higher usage of our cards as a preferred payment method. This momentum reflects the continued effectiveness of our commercial integration, which has supported higher participation across our retail platforms. At Liverpool, card penetration increased by 240 basis points to 51% of total sales, while Suburbia also recorded a 290 basis point improvement. In parallel, we have continued to broaden our financial ecosystem, including the rollout of our digital cash advances, which grew 44% year-over-year and the expansion of our insurance offering through additional products and partners. Loyalty initiatives also contributed to a 12% increase in OVO's usage of our Visa-branded cards. As a result, our customer base expanded by 7% during the period, reaching 8.4 million cardholders. Regarding the health of the loan book, the nonperforming loan ratio stood at 3.7%, reflecting a 53 basis point increase, that was both expected and previously communicated, consistent with our profitable growth strategy in the credit business. A prudent stance was maintained throughout the quarter with reserve coverage reaching 9.7%, an increase of 90 basis points, while the reserve for NPLs remained at 2.9x. This approach resulted in a quarterly credit loss provision of MXN 2.1 billion, up 35% driven by portfolio expansion, the anticipated increase in NPL levels and a more conservative coverage framework. Importantly, the impact on financial services results remain positive as higher provisions were fully offset by increased revenue generation within the same segment. Overall, this reflects our continued focus on balancing portfolio growth with disciplined risk management as we actively guide NPL levels towards prepandemic benchmarks. The Real Estate division reported a 6.7% increase in revenue during the quarter, driven by 2 main factors: higher occupancy and strategic lease renegotiations, reflecting a gradual shift from predominantly fixed rent structures towards a combination of fixed and variable components. Occupancy improved by 170 basis points to 94%, reflecting steady demand across the portfolio. This transition in lease structure is beginning to support revenue growth while better aligning rental income with tenant performance over time. Consolidated gross margin for the fourth quarter stood at 38.5%, representing a 50 basis point contraction year-over-year. This was primarily driven by previously mentioned nonrecurring logistics expenses and retail margin contraction, partially offset by a higher contribution from the faster-growing credit business. Operating expenses, excluding loan loss provisions, depreciation and amortization increased by 1.1% during the quarter. Adjusted for nonrecurring favorable reserve movements, the underlying increase was 6.3%, primarily reflecting the impact of minimum wage adjustments on personnel costs and labor-intensive services. Containment measures helped partially offset these pressures moderating the pace of growth relative to the previous quarters. Including loans loss provisions, depreciation and amortization, total operating expenses increased by 6.2%. For the fourth quarter, EBITDA reached $15.3 billion, representing a 3% increase compared to the same period last year. EBITDA margin stood at 19.3%, a contraction of 40 basis points year-over-year. On a full year basis, EBITDA totaled $35.8 billion, a 4.7% decrease versus the prior year with an annual margin of 15.6%, reflecting a 1.9 percentage point reduction and in line with the EBITDA margin outlook shared in our third quarter call. Due to the previously discussed alignment of fiscal calendars, the results from associates line item for the fourth quarter incorporates Nordstrom performance from September 2025 through January 2026. On a 100% basis, Nordstrom delivered solid performance for the period with total net income increasing by 5.9%. Adjusted EBITDA margin expanded by 50 basis points to 8.6%, and net income reaching $230 million. As previously communicated in our preliminary results, during the fourth quarter, we recorded charges of $172 million related to our fair share of transaction costs, purchase price allocation adjustments and other customary accounting items associated with this type of transaction. This amount was lower than the approximately $190 million we had previously communicated in Q3 as our estimated share. Reflecting these items on Nordstrom performance, adjusting for our 49.9% ownership, we recognized in results from associates a benefit of MXN 1.9 billion before nonrecurring effects during Q4. The aforementioned charges translated into MXN 3.1 billion, resulting in a net negative impact of MXN 1.2 billion for the quarter. Importantly, the cumulative results since the acquisition date remains a positive contribution of MXN 131 million in our P&L, in addition to $18 million in dividends received during 2025. The dividend level reflects the combination of pre-transaction distributions, stock dividends, and post-transaction payments. Looking ahead, we expect dividends to increase to approximately $38 million in 2026. With this now behind us, we have greater clarity on how Nordstrom results will be reflected going forward. As a reminder, Nordstrom fiscal year runs from February through January. Accordingly, we expect to follow a 1, 3, 3, 5-month recognition pattern that provides the best alignment between our respective reporting calendars. Under this approach, our first quarter will reflect only the month of February. The second quarter will include March through May. The third quarter will cover June through August, and the fourth quarter will reflect September through January. In terms of nonoperating expenses, higher financial expenses were driven by the $1 billion bond offering completed in January, as well as a reduction in our cash position due to the Nordstrom transaction. Additionally, during the quarter, we recorded MXN 503 million in FX losses primarily associated with the repatriation of capital following the collection of the loan used to finance the take-private transaction. As explained in Q3, Nordstrom Inc. distributed approximately $376 million in dividends to its parent company, which were used to fully repay a loan issued by a Liverpool subsidiary at closing. These funds were subsequently repatriated to Mexico to optimize the capital structure at a local level. However, the depreciation of the U.S. dollar against the Mexican peso during the life of the loan generated an FX loss, which was the main driver of the total FX losses recognized this quarter. As a result, financial expenses for the period totaled MXN 1.6 billion. Taking all of this into account, the bottom line reflects a consolidated net profit of MXN 7.6 billion for the period, representing a 21.4% reduction compared to the same quarter last year. On an annual basis, net profit reached MXN 17.2 billion, a 25.9% decrease relative to 2024. Turning to capital expenditures. Cumulative investment totaled MXN 10.7 billion, representing a 12.2% decrease versus 2024. This reduction primarily reflects the high comparison base which included the acquisition of the Altama Shopping Mall in Tampico as well as lower spending following the completion of the Arco Norte logistics project. Capital deployment during the period remained focused on optimizing and upgrading existing infrastructure under a disciplined allocation framework. The Arco Norte Logistics Center is approaching full operational stabilization with a total investment of approximately MXN 17 billion, the facility represents a key component of our long-term supply chain strategy, and is expected to contribute to significant improvements in distribution efficiency. Capital investment remains directed towards 3 priorities: logistics infrastructure, strategic technology initiatives and the renovation of our existing store network. This disciplined approach reflects both disciplined capital deployment and a focus on optimizing existing operations while maintaining a robust and modern retail footprint. The balance sheet remains strong with cash and cash equivalents closing the period at MXN 25.3 billion. Leverage stood at 0.52x net debt to EBITDA, supporting the company's financial flexibility to meet its commitments while operating in the current market environment. We are pleased to announce that we have entered into a long-term agreement with Authentic Brands Group, granting us exclusive license to distribute the DOCKERS branded apparel in Mexico. The transaction has received approval from the National Antitrust Commission. This initiative marks our entry into the wholesale market and will be managed through a newly established division, Global Lifestyle & Apparel Management, G.L.A.M., operating as an independent business line within the organization, G.L.A.M. will oversee the distribution of DOCKERS apparel across Liverpool's unified commerce platform including department stores, digital channels and specialized boutiques as well as through selected third-party partners via wholesale and strategic collaborations. Over time, we expect this initiative to make meaningful contribution to both revenue growth and profitability, while further diversifying our income streams. We will provide further updates as this exciting opportunity progresses. On January 29, LatinFinance named El Puerto Liverpool, the recipient of the cross-border M&A Deal of the Year award for the acquisition of our 49.9% stake in Nordstrom, recognizing it as the most significant transaction involving Latin American companies during the year. This distinction provides external validation of our international diversification strategy and highlights both the complexity of the transaction and the precision of its cross-border execution, including its financing structure. The partnership with a premier U.S. retailer was achieved while preserving the financial flexibility needed to continue supporting domestic growth. Ultimately, this recognition underscores the strength of our balance sheet and our ability to execute large-scale strategic investments. We are grateful to LatinFinance and the Nomination Committee for this honor and for the opportunity to be recognized alongside leading peers in the global financial community. On February 10, the company successfully issued $500 million in senior notes maturing in 2038 on the rule 144A Reg S. The notes carry a 5.75% coupon and reflect the company's solid credit profile, supported by the investment-grade ratings of BBB from S&P Global and BBB+ from Fitch. The issuance was completed at a historically low spread of just 150 basis points. From a risk management perspective, the principle has been fully hedged resulting in an effective peso-denominated rate of 9.3%. In terms of our debt profile, the next scheduled maturity consists of MXN 9.6 billion in senior notes originally due in October 2026. We have elected to exercise the make-whole call with March 12 designated as the settlement date. This proactive step reflects our continued focus on optimizing the capital structure and efficiently deploying available liquidity. Before transitioning to the Q&A session, I would like to outline our guidance for 2026. As we enter the year, we remain mindful of the ongoing headwinds in the consumer environment and the promotional dynamics across the market, and we'll continue to focus on disciplined execution and the levers within our control. Same-store sales are expected to grow between 4.5% and 5.5% for Liverpool and between 5% and 6% for Suburbia. We also plan to expand our footprint with the opening of 2 new Suburbia locations, further enhancing customer proximity. The digital ecosystem remains a key growth lever with digital GMV projected to increase between 18% and 19%, supported by continued progress in our unified commerce strategy. In Financial Services, the net loan portfolio is expected to grow between 7% and 8% in line with our profitable growth approach. NPL levels are projected in the range of 4.2% to 4.7% as we continue to balance portfolio expansion with disciplined risk management. As a result, NPL provisions are anticipated to grow between 20% and 25%, supporting prudent portfolio management. We expect EBITDA margin to range from flat to 16.5%, reflecting the combined impact of a cautious consumer environment and moderating macro backdrop, a more favorable exchange rate and the absence of onetime effects recorded in 2025, while maintaining focus on gradual margin recovery. Finally, 2026 CapEx is expected to range between MXN 8 billion and MXN 9 billion lower than 2025 levels following the completion of major investments related to the Arco Norte project. Planned investments will focus on supply chain capabilities, store renovation and strategic technology improvements. In 2025, we navigated a complex operating environment with continued focus on execution, financial discipline and long-term priorities. Despite ongoing market headwinds, our portfolio demonstrated resilience, supported by the strength of our financial services and real estate businesses and progress in margin recovery. Our unified commerce strategy, combining digital capabilities, fulfillment infrastructure and a strong physical footprint continues to position us to adapt to evolving consumer behavior while maintaining focus on profitability. As we move into 2026, we remain focused on serving the customer while executing on the levers within our control to navigate uncertainty and support sustainable performance over time. Thank you for your time this morning. This concludes our prepared remarks, and we will now open the call for your questions.
Operator: [Operator Instructions] Our first question comes from the line of Andrew Ruben.
Andrew Ruben: Andrew Ruben with Morgan Stanley. I'd be curious to dig a bit more into the guidance, specifically on EBITDA margin. I'm curious, what do you think you would need to see in order to get to the high end of the range and how you're thinking about the breakdown between changes in gross margin and SG&A? Any more color there would be very helpful.
Gonzalo Gallegos: Thank you, Andrew. I guess what we would need to see is to have some increase in gross margin. We're expecting gross margin to increase due to a combination of factors. First is the overall margin trend. As you saw at the beginning of 2024, we had a contraction of over 200 points, and we have had sequential improvements. And excluding logistics costs, when you compare the fourth quarter of 2025 versus the fourth quarter of 2024, the contraction is about 20 points. So with that level, combined with a more favorable exchange rate and less pressure on our overall inventory position, and also the avoidance of onetime expenses related to the migration of our softline operation to our new facility in Arco Norte, the combination of that, we expect to provide an increase in our gross margin. And that's important because on the SG&A side, even though we have successfully launched some expense containment initiatives, we will see have significant pressure on overall SG&A. So in that, we expect more help on the overall gross margin than on the overall SG&A front.
Andrew Ruben: Great. That's helpful. And sorry, if I could just follow up on the areas of SG&A pressure. Do you see this more from rising wages or any other discrete items that you would call out?
Gonzalo Gallegos: Overall wages, you saw the increases on minimum wage that were in effect in January. And also given that we're pursuing an overall portfolio increase with a subsequent increase in NPLs. The combination of a larger portfolio with higher NPLs, the combination of those 2 effects, reflect in our overall guidance of a 20% to 25% increase that is reflected as part of the SG&A. So it's a combination of those 2 factors.
Operator: Our next question comes from the line of Irma Sgarz.
Irma Sgarz: Yes. Irma Sgarz from Goldman Sachs. I have a couple. One is on the guidance for the same-store sales growth. It was a touch surprised that -- and I know it's not a huge difference, but you're expecting the Liverpool banner to grow a little bit more than Suburbia. And I was just interested to hear what you -- what drives that differentiation in your expectations? I would have thought that perhaps in a softer consumer backdrop in Suburbia is maybe facing a little bit more of a promotion-driven and cautious consumer compared to Liverpool. That's my first question. And then the second question is, obviously, 18% to 19% GMV growth in the digital business is obviously strong growth, but we're certainly seeing some players in the market potentially growing at higher rates. So in the e-commerce business, specifically perhaps on the marketplace side. So I was curious, do you feel you could be growing more? And are there sort of guardrails that you have around it that potentially mean that you're even choosing not to grow further because it would be going to the detriment of your margins. I'd love to just understand how you're thinking about the balance between growth and profitability in the online business? And then my third question, sorry to roll out a few here, but I was intrigued about your agreement for the distribution of the DOCKERS brand and your future plans for that G.L.A.M. business unit. And I'd just love to hear a little bit more detail about whether this should be margin accretive. It sounded like it. I understand that it's going to be obviously very small initially. But sort of just generally how you're thinking about the P&L structure of these brand agreements? And just broadly speaking, also what type of brands are you looking for to bring to the Mexican market?
Gonzalo Gallegos: Thank you, Irma. Let me start with our guidance. The reason why we're expecting -- and just as a reminder. So for Liverpool, 4.5% to 5.5%, and in Suburbia, a bit higher, 5% to 6%. The reason why we're expecting Suburbia to grow a little bit faster than Liverpool, even though it certainly has some additional challenges is because of the maturity of a number of new stores that we have opened during 2025 and a part of 2024. So the growth rate on those new stores tend to be a bit higher. So the combination of the FX turns out to be as likely higher than what we see in more mature stores like Liverpool's. So that's one. Then let me move to GMV. We do not see our marketplace as a full marketplace where you can find anything. Our view is that the marketplace should be consistent to the shopping experience that we offer within our store. So if you take one brand, and we may not have enough space to carry the whole assortment. So maybe you will have a selected assortment within the store, and the rest of the assortment in the marketplace. So the idea is not to sell anything, is to sell whatever it makes sense to be complementary to the other channels, particularly the physical channel. So in that regard, I guess that implies that we're taking some choices that do limit growth. But also, as you pointed out, they also help in profitability, and it also helps our 1P selling. I mean, the selling of items from Liverpool. It also gets increased because of how we manage our marketplace to avoid, for instance, if we don't want to sell exactly the same item on our marketplace and in Liverpool. So there's a curated effort, not to have duplicated items. And so we feel comfortable with this close to 18% to 19% increase because it's consistent with the overall omnichannel experience that we want to provide, but we're certainly looking for alternatives to pursue higher growth. Looking at our agreement with ABG, we are excited about this opportunity. There are a number of reasons. First, because it marks our entry into a completely new channel. Liverpool currently does not offer a wholesale sales. So it's a completely new division. It will be an independent business within our organization. What's also interesting is that we'll be selling the DOCKERS brand, not only to Liverpool which in turn will offer -- will continue to offer the DOCKERS brand under our current unified commerce platform. But also we will be selling via wholesale through other third parties. And the last thing that I would like to mention is that even though it will be relatively small at the beginning, over time, we expect this initiative to move the needle in terms of both revenue and profitability. And you also asked about the type of brands. We're not providing a guidance, but certainly, we're looking for brands that add value to our Mexican customers and make a difference in the marketplace.
Operator: Our next question comes from the line of Nicolas Riva.
Nicolas Riva: It's Nicolas Riva with Bank of America. I have a question on Nordstrom -- on the stake in Nordstrom. So you booked an impairment, I believe, a noncash impairment this past quarter of about $170 million. So my question is, how should we read really that impairment, if you are less constructive about the outlook for the business, given that the acquisition is fairly recent. And also, I think in your remarks earlier in the call, you provided guidance for dividend income this year on that stake. I think you said you expect to get $38 million in dividend income from that stake this year. And what I remember in the past, you're saying that you are expecting to get about $75 million a year in dividend income if I heard correctly. So that will be about half the size of the original expectations, if I'm right. So I just wanted to ask about how should we read this impairment on Nordstrom?
Gonzalo Gallegos: Thank you, Nicolas. Well, first, let me start by clarifying that is not an impairment. As part of any acquisition, you have to go back to the balance sheet and review all the items on the balance sheet and take those items into the fair value amount. So the main 2 items that were increased as part of this purchase price allocation is inventory and fixed assets. And we recognized the additional depreciation on the fixed assets from May through January in our fourth quarter. So it's not an impairment rather than an increased layer of depreciation on fixed assets. And the other part is in inventory. Inventory also gets close to fair value. So that increases the overall cost of goods sold, during the period from May 20 until the inventory got sold. So that's a onetime effect, where we are recognizing the effect on that increased cost for 2025. So not an impairment. It's rather and in part, increased appreciation and increased cost of goods sold. And the third item or at least the third material item that we recognized is the fair share of the acquisition expenses. So the combination of those 3 are the main factor between the onetime expense that I described. Now talking about dividends, you are correct. We have announced that we expect the dividends to be between -- around MXN 75 million for the year, and that's the total dividend. So if you adjust that dividend, to our fair share, our fair share is about $38 million.
Operator: Our next question comes from the line of Alvaro.
Alvaro Garcia: Alvaro Garcia from BTG Pactual. A couple of questions. One on the agreement with ABG and the new G.L.A.M. segment. I guess a bigger picture question on why you didn't do wholesale in the past? And then just to clarify, I'm assuming it's exclusive with ABG brands or can other non-ABG brands enter G.L.A.M. And what sort of CapEx can we assume or what sort of capital outlay can we assume for this business?
Gonzalo Gallegos: Thank you, Alvaro. I guess the -- why we have done it in the past, as we wanted to make sure we have the right brand to pursue this opportunity with. And certainly, the DOCKERS brand provides as an opportunity, a unique opportunity where we can leverage a lot of Liverpool's current volume and also some additional players. So the timing was just correct to pursue it at this moment. And regarding the agreement is not exclusive to ABG. So in theory, we have absolutely no restrictions regarding the partners and the number of brands that we can manage under G.L.A.M. And going to your question about CapEx. At the moment, it's a relatively small amount that is already included in this MXN 8 billion to MXN 9 billion investment that we are providing as guidance. And in the future, the type of CapEx that may entail is mostly technology. And in some cases, maybe some new stores. For instance, we are currently assessing the -- can DOCKERS boutiques, the DOCKERS specialized boutiques, and we want to make sure we have more transition on that. And those specialized boutiques will be managed by the Liverpool's boutiques division. So in time, maybe it may make sense to continue opening a specialized boutiques that will fall under our regular CapEx. But as I said at the moment, we don't expect material CapEx to be investment in this initiative.
Alvaro Garcia: And then just one quick one on Suburbia. The 2 new stores for the year as part of your guidance feels a bit low, obviously, relative to what you've guided for in the past. And just maybe if you could overview sort of how you're seeing that new store opportunity for us will be in the context of that? That would be helpful.
Gonzalo Gallegos: If we have enough sites to open more new stores, we will certainly be interesting in increasing the number of new stores. However, we want the new locations to be profitable enough to try to maintain a balance between growth and profitability. So I guess, we want to make sure we'd rather open 2 very strong stores than a number of them that may not be sufficiently profitable. And that's why we have seen a contraction on the new store openings.
Operator: Our next question comes from the line of Hector Maya.
Héctor Maya López: Hector Maya from Scotiabank. Regarding Arco Norte, could you please share some details on what is your vision of a fully matured Arco Norte. What -- why would that mean efficiencies, synergies, cost savings? What would be the time line for that? And I would also be interested in knowing if there are any more phases or more potential building space in the Arco Norte premises that could come further in the future?
Gonzalo Gallegos: Thank you, Hector. Arco Norte is the heart of our logistics infrastructure nowadays. Let me give you a quick example. We used to have our main logistics hub in [ Tlalnepantla ] the north of Mexico City, and that was supported by a number of outside warehouses. So putting all of that operation under the same room, under the same growth, provides a number of automatic efficiencies just because you don't have to drive inventory from one place to the next. And keep in mind our logistics, our previous logistics infrastructure was created where the total number of sites served were significantly higher than our current locations. So it was very close to the saturation level. So the current site, given that is much larger, provides flexibility from the future. Having said that, given that it's a very complex operations, we expect synergies to start being reflected in the later part of 2026 and in the upcoming years. Now in terms of the size of the land, it's a pretty large size. So yes, there could potentially be some expansion within the same land that we own today. But there are no current plans to build new buildings in that facility.
Héctor Maya López: Got it. Very clear on that. And also on CapEx, I know that after Arco Norte, you might want to take an opportunity to take a breather. But considering the level of CapEx that you had been allocating in the past few years, would there be a bit of a space further down the road to also increase CapEx as a percentage of sales maybe to prioritize other projects that maybe were not the highest priority before, given that you were spending on the Arco Norte building?
Gonzalo Gallegos: I guess from a flexibility standpoint, it certainly provides more flexibility. However, we have a very prudent cash management strategy. So we will invest in the best opportunities that drive growth and add value to the customers. For instance, when we did the Nordstrom acquisition, we were very clear that we didn't see the Nordstrom acquisition as mutually exclusive with investments that we have to perform in Mexico. So I get -- I guess that all plays within investments in Mexico. So having the space does not necessarily mean that we will be pursuing opportunities that are less attractive.
Operator: Our next question comes from the line of Antonio Hernandez Velez.
Antonio Hernandez: This is Antonio Hernandez from Actinver. Just a quick one regarding Liverpool Express. Sorry, if I missed it, but I think you didn't mention any openings on this format. Is that correct? And if you did or if you're guiding any type of openings for Liverpool Express? What is the approximate investment per unit there?
Gonzalo Gallegos: Thank you, Antonio. During the quarter, we added new -- 9 new Liverpool Express units and the total right now in 68 locations. We do expect to continue the openings. We are simply not providing a guidance of how many units were expected to open. In terms of the CapEx, the CapEx is relatively small because the average location for Liverpool Express is around 200 square meters. So the CapEx is not very high.
Antonio Hernandez: Okay. So I guess you continue to see potential there, just not providing a specific number.
Gonzalo Gallegos: That's correct. We will continue to increase the number of locations. But given that in terms of materiality, there as an individual locations there they do not represent a material increase in either sales or CapEx. We will not be providing the guidance on the number of the number of units that we intend to open.
Operator: Our next question comes from the line of [ Herb ].
Benjamin Theurer: This is Ben Theurer from Barclays. I wanted to get a couple of comments from you as it relates to the recently implemented tariffs against Chinese products. Obviously, there's a lot of items that probably or so within your stores that come from China that yet need to be passed through, but there is a potential secondary effect as it relates to some of the very low-cost Chinese competitors on the online platform. So first part of the question, could you help us frame maybe the impact as it relates to the products that you sell. What share of that is imported goods from China and hence exposed to the tariffs? And then second, how do you think about the competitive dynamics within e-commerce, particularly against things such as [indiscernible], et cetera.
Gonzalo Gallegos: Thank you, Ben. Currencies, it's very complicated because it has changed a lot from -- since I think it was December 2024, where the Mexican government enacted a number of restrictions on textiles and apparel coming from not only China, but all of the countries which Mexico don't have a free trade agreement. So the impact on those -- let me first talk about the overall split between national and imported inventory. If you take a look at our own imports, I mean the items imported directly by Liverpool, they represent about 15% of the inventories. And if you take a look at the inventory that is imported by our vendors through say their Mexican subsidiaries, and then sold to Liverpool, that's an additional 40% to 50% of the overall inventory. So the total amount of inventory is relatively high. And a number of those imports, particularly in softline come from China. So the impact on us has been gradual, for instance, this item that was -- well, these changes that were implemented in December 2024. Our view is that we will pass on the impact on tariffs to prices throughout 2025, I think we have very -- we have been very successful in doing so. For further perspective, the overall price increase in softline comparing 2025 versus 2024 is about a 10% increase. And there are some, obviously, some things that affect the business that are very specific. For instance, if you take a look at lower priced shoes, particularly those similar to what we sell in Suburbia, there's a change where it's very expensive to import shoes that costs less than $22 per pair. So we have been looking at options around the chip shoes to make sure we have a competitive offer to the customers. Now what that does from a competitive standpoint? I think the Mexican government has been tried to limit some of these small, very small value tickets coming from China. So for instance, now you have to set up your tax ID. And there are some other restrictions. So we think that, that will limit the amount of very cheap imports that come from China. But quite honestly, it's very hard to assess.
Benjamin Theurer: Okay. Perfect. And the competitive landscape in like e-commerce, does that give you an advantage to a degree because it's been very harsh competition, right? So as we think that through, do you see some benefits here on your e-commerce business?
Gonzalo Gallegos: From -- directionally, yes, it should provide an advantage. However, it's very hard to see a direct link between what's happening on the tariff side, what's happening on the competition and what's the impact of those into our GMV growth. So in theory, we -- not in theory, what we are trying to do is all of us play on the same field. So through the [indiscernible] some other organizations, we have been asking for a level field. So we have the same type of restrictions or advantages for all the retailers are playing under the same rules.
Operator: Our next question comes from the line of Inigo Rodriguez.
Inigo Rodriguez: This is Inigo from [ Forecopel ]. Just 2 quick questions. Could you please provide some color on the ramp-up periods for the Suburbia and Liverpool stores opened in 2025? And also, how do the ramp-up periods for the small units the Liverpool Express compared to the traditional department stores?
Gonzalo Gallegos: By ramp-up periods -- just to clarify my ramp-up you are referring to the time it takes for a new store to mature?
Inigo Rodriguez: Exactly to get to the EBITDA breakeven?
Gonzalo Gallegos: Well, it changes a lot depending on the location of the store, if it's a very populated area, they tend to mature faster. For instance, if you take our stores, both the Liverpool and Suburbia in Parque Antenas in Mexico City, those tend to mature very fast. And in the small locations tend to be a bit slower. So I guess, overall, the Suburbia maturity, it takes a few years. While Liverpool being a large store tends to take a bit longer. But you're talking years in maturity. But as I said, there is no straight answer to that. And in terms of legs, given that is a very small location to give you some perspective, an average legs is between 200, 250 square meters and an average Liverpool is like 15,000 square meters. So the maturity curve is completely unrelated between one or the other. So we don't disclose exactly the amount of years we're expecting for the individual stores to mature.
Operator: Thank you for your questions. That concludes our question-and-answer session. I would now like to hand the call back over to Gonzalo Gallegos for some closing remarks.
Gonzalo Gallegos: Thank you for your time. We look forward to speaking with you during our next call. Have a good day.
Operator: That concludes today's call. You may now disconnect.