Organización Soriana (SORIANA) investor relations material

Executive summary

• Q3 revenue was MXN 40,833 million, down 4.3% YoY; same-store sales fell 3.6% amid cautious consumers, intense competition, execution challenges and 18 store closures.

• 9M revenue declined 3.9% to MXN 124,836 million, while net income rose 18.3% to MXN 2,397 million.

• Priorities are restoring traffic and sales momentum while protecting profitability and cash generation; October trends improved, though management cautioned that one month does not confirm sustained recovery.

Financial highlights

• 9M gross profit was MXN 30,847 million, down 0.4% YoY; gross margin expanded 90 bps to 24.7%.

• Q3 gross profit was MXN 10,229 million, down 4.3% YoY; gross margin increased 10 bps to 25.1% on shrink management, supplier negotiations and private-label growth.

• 9M operating income was MXN 4,943 million, down 2.4%; Q3 operating income was MXN 1,266 million, down 13.8%.

• Q3 operating expenses declined 2.4% YoY to MXN 7.9bn, reflecting efficiencies in maintenance, travel, cleaning and marketing costs; 9M expenses rose 3.6% to MXN 23,420 million.

• Q3 net income was MXN 473 million, down 19.1%; 9M net income was MXN 2,397 million, up 18.3%, including MXN 2,376 million attributable to controlling shareholders, up 18.4%.

Outlook and guidance

• Q4 consumer spending is expected to remain cautious; Buen Fin and the holiday season could support performance.

• Q4 priorities include driving traffic and conversion, increasing sales per square meter, improving efficiency, managing expenses and optimizing working capital.

• October same-store sales trends improved, with management estimating the gap versus competitors could narrow by 98%; management cautioned this is an initial indication, not proof of sustained success.

• No additional store closures are planned for next year as of the call; plans include remodels, openings and possible sales-area reductions to increase real estate activity.