Salvador Villaseñor: Good morning, everyone. I am Salvador Villaseñor, Head of Investor Relations at Walmex, and I want to thank you for joining once again to our live Q&A session following our third quarter 2026 earnings release, which was published yesterday evening. As usual, we will make every effort to answer as many questions as we can in the 45 minutes we have scheduled for this call. Once again, we kindly ask you to limit yourself to one question as courtesy to others. Joining me today is our President and CEO, Cristian Barrientos Pozo, Karthicka Krishnasamy, our Head of E-commerce, Javier Andrade, our CMO, and Camilo Cañedo, our CFO. With that, we will go straight to the first question, please.
Operator: We will now start the Q&A session. If you have a question, please press star eight on your telephone keypad. If your question has been answered, you may cancel it by pressing star eight again. The first question is from Mr. Ben Theurer from Barclays. Please go ahead.
Ben Theurer: Good morning, Cristian and team. Thanks for taking my question. My one question I would like to focus on is really on the SG&A side. It is kind of like a blended question, looking into the headwinds we had over the past and obviously looking forward as it relates to some of the impacts from the labor reform with fewer hours to work, et cetera. As we look at this, most recently, SG&A continues to grow faster than sales and probably is likely going to continue as we move into 2027. As we think about your sources of productivity, your ability to get efficiencies out of the system, what are you planning, what are you working on, and how should we think about the timing as it relates to being able to grow SG&A maybe at a lower rate?
Cristian Barrientos Pozo: Hi, Ben. Thank you for your question. It is Cristian here. Let me begin with some ideas that we have been working during the year, and then I move to Camilo to complement. Absolutely, you are completely right that we are seeing our cost of doing business increasing every year. We expect to grow minimum wages next year around 12%. You know that we will be facing the labor reform in terms of moving from 48 to 40 hours, beginning next year with 46.
Cristian Barrientos Pozo: This year we have been working very close with a global team trying to implement a lot of initiatives that will help us to be better prepared for this new way of working in Mexico. Only as an example, we just finished the rollout of DSL, digital shelf labeling, in Walmart Express, more than 100 stores this year.
Cristian Barrientos Pozo: We have a clear roadmap to do the same around more than 200 or 300 more stores in the H1 of 2027. We will be expecting that, or that example will help a lot to try to contain the cost of doing business here. We have done a lot of things with project to smart receiving. You know that we will be launching next year or open, more than launching, open a new distribution center in Bajío that help us because of the automation to be more accurate in the way that we stock products. We have a lot of initiatives that we are super confident that we will be very well prepared to contain now this cost of doing business for next year, but maybe Camilo, you can complement my answer.
Camilo Cañedo: Yeah. Hi, Ben. Just double down on what Cristian just said. We are leveraging everything that we can from global Walmart operations, and we are bringing as much technology and productivity that we can do for innovation. That includes the sales, in-store technology for mapping inventory, it includes our supply chain network, which is going to drive more efficiency for us. On top of that, we are also focused on days on hand inventory. Having leaner stores is going to help to also reduce labor in the stores and be more efficient. Now, having said that, we also recognize that we are living in a high SG&A inflation environment. It is not just about cost, it is also about accelerated sales.
Camilo Cañedo: We are working with everything that we discussed during our call on enhancing our CVP, growing detail, and accelerated detail to be able to maximize sales and grow at the same time and merge sales growth with SG&A growth.
Ben Theurer: Perfect. Thank you very much.
Camilo Cañedo: Thank you, Ben.
Operator: Thank you very much for your question. Our next question is from Ms. Irma Sgarz from Goldman Sachs. Please go ahead.
Irma Sgarz: Yes, hi, good morning. Thanks for taking my question. I would like to drill down a little bit more detail on what you are seeing in the Bodega formats. It does look like on one of the same sales graphs for Mexico, there is a slight inflection there. If you can just provide a little bit more color to what extent that, I understand that is traffic stabilization, perhaps. If you can just drill a little bit more into what is working and what is not working yet, and whether you are seeing any signs of turnaround yet in the larger formats.
Irma Sgarz: And whether that is giving you confidence that what you are seeing there in terms of, or what you have seen in terms of headwinds in the larger Bodega formats is mostly a cyclical and perhaps micro execution issue rather than a structural headwind to this type of format. Thank you.
Javier Andrade: Yeah, thank you, Irma. This is Javier, and I will answer the question. Thank you for the question. I am very excited about the Bodega Aurrerá format. Let me share with you some of the leading indicators that show us that we are heading the right way. In our price gap, we have invested a lot of money, and we are seeing very good improvements. We are very positioned to really deliver the best value for the customers. In total availability, we managed to have more than 400 basis points above last year. At the same time, we reduced 1.4 days on hand.
Javier Andrade: That makes us very productive to reinvest in price. However, what we saw during this Q3 was that most of the customers are pulling back from discretionary spend, specifically in general merchandise, and that hit the business specifically.
Javier Andrade: But we are seeing very positive trends in our fresh business. As you know, it is part of the differentiation we have versus hard discounters and some other competitors. We have more than 10 weeks with very good results in volume, and we started to see also in fresh, very good results in MXN in the past weeks. So October is going to be a very good month. The other thing I would say is that we are rebuilding the architecture of the assortment for Bodega Aurrerá, and we are reinforcing the customer value proposition for each of the formats.
Javier Andrade: One decision we made is that we are going to be specializing our merchants by format. So they are going to be very accurate on the value proposition in terms of assortment, experience, price, and that will give us the trust of the customers to accelerate the business.
Javier Andrade: The other thing is, we review all of the processes that we have for modulars, and we are increasing dramatically the share of our private labels. You will see a different approach there, and that will help us give access to the customer in Mexico for better products and better quality. The final thing I would say, Irma, is that we are just finishing now the One Hallway conversion in Bodega Aurrerá. That is very important because we are merging our high volume business with the other parts of the business in general merchandise and long tail assortment. That is something that was started a few months ago, and we are about to finish One Hallway.
Javier Andrade: We are implementing all the learnings that we have from the transformation in Supercenters, so we expect to be less of a learning curve in Bodega Aurrerá with this transition, and that will help us also capitalize traffic that we have in OPD and also in our digital business, converting the fresh customers that we are acquiring now with this strategy of investment into a bigger basket and a better ticket for Bodega Aurrerá with a lot of value.
Irma Sgarz: Thank you.
Javier Andrade: You are welcome.
Operator: Thank you very much for your question. Our next question is from Mr. Alejandro Fuchs from Itaú BBA. Please go ahead.
Alejandro Fuchs: Thank you, operator. Buenos días.
Javier Andrade: Hola.
Alejandro Fuchs: Yep. Thank you, operator. Buenos días, Cristian, Javier, Camilo, and team. Thank you for the space for questions. I just have one quick one maybe for Cristian. I wanted to see if you could share a little bit of your thoughts coming into 2027. Do you expect this year to be a little bit more, let's say, resilient for consumption in Mexico? Maybe some of the initiatives that you guys have worked all through the year, maybe to accelerate a little bit more top-line growth into 2027? Thank you.
Cristian Barrientos Pozo: Thank you, Alejandro, for the question. For sure, we are seeing consumer a little bit more cautious in terms of consumption. We will be seeing huge impact, let me say, in Mexico, as I mentioned before, because of the cost of doing business in Mexico is increasing minimum wages. We will see how the companies will adapt with this new labor reform, moving from 48 to 46 now next year.
Cristian Barrientos Pozo: So I think the consumption, it is more to come in terms of what is going on with the trends. But we feel super confident that we have already in plan super important projects that will help us to mitigate the cost of doing business and try to provide our valuable position to all the customers, because this is the power at Walmart. We wanted to save people money so they can live better.
Cristian Barrientos Pozo: This is the most advantage strategy that we have. Maybe you know that this year we launched a huge campaign that called Precios que no se tocan, with more than 4,000 items. We fixed the prices for more than 90 days. It was a huge impact for us in terms of sales and also a super reaction for the customer because they saw the value. We are still with the campaign alive in our stores. This kind of strength that we have, we will be taking advantage for this year to end of the year in Buen Fin, also Christmas and then Reyes. That is something that we have in our plan. We will see more cautious customer, but I think we are better prepared to adapt with this new reality.
Cristian Barrientos Pozo: We are seeing a good momentum, let me say, with this priority that we set at the beginning of the year. All the improvement that we have done, and you saw in the webcast, encourage ourself that we are going in the right track. I do not know, Camilo, if you wanted to complement on that.
Camilo Cañedo: I would double down that this is where Walmart's value proposition really becomes even more relevant in challenging economic environment. We are going to double down on price, and we are really excited about all the detail, products, and initiatives that we are bringing for next year. I think this is going to make a difference that we continue to serve customers.
Cristian Barrientos Pozo: Yes.
Alejandro Fuchs: Thank you, Cristian.
Cristian Barrientos Pozo: Thank you, Alejandro. Thank you.
Operator: Thank you very much for your question. Our next question is from Mr. Froylan Mendez from JPMorgan. Please go ahead.
Froylan Mendez: Hello, guys. Good morning.
Cristian Barrientos Pozo: Morning.
Camilo Cañedo: Morning.
Froylan Mendez: Hi, guys. Perfect. Thank you. A question on gross margin. Could you help us quantify how much of the gross margin, let's say, the puts and takes between the core retail business and the commerce solutions. Specifically, how much of the pressure from the price investments in Mexico is being currently offset by the, let's say, growing contribution from the commerce solutions that you mentioned? And how far are we from the, let's say, the underlying retail gross margin that you consider a normalized level?
Camilo Cañedo: Thank you for your question. Camilo, I am going to take this one. As you know, we have not really broken down the different components of our commerce solutions in benefits into the gross margin. But I will say that we feel good about the investments that we are doing in gross margins. We have invested in price over the past few months, so the price perception improvement that we have, and consumers are reacting to it, are starting to reflect that in our sales and units growth. Our commerce solutions are also growing. Year to date, our number is around 20%, so we feel good about how the commerce solutions are accelerating, and we continue to expect that to accelerate even further as we expand detail, grow marketplace.
Camilo Cañedo: That is just going to increase the potential for us to grow these market solutions, help us even offset more to invest more in price for us. I would say we are relatively in a good shape in the gross margin, where we believe is going to be regarding pricing. We have great relationship with our suppliers to continue to find solutions to lower our price for our consumers. So our GP should be stable, but again, helping our customers find lower prices with networking through our suppliers. I do not know, Javier, you want to add anything else?
Javier Andrade: Yeah, just another thing, Froylan, is that what I was saying about the assortment architecture is also helping us to rebalance the margin mix, and we are going to be very intentional in each of the formats, not just Bodega formato grande or Walmart Supercenter. We are doing this new architecture through all the fleet. And the other thing is, we have a lot of initiatives that we already implemented, and we are seeing a very good trend in terms of days on hand and working capital, so we can reinvest in price without affecting the margin of the company. So we will be maniacal focused on delivering the best value. Next year, it is going to be a tough environment, but it is the best opportunity for us to really accelerate with these initiatives.
Froylan Mendez: Perfect. Thank you very much.
Cristian Barrientos Pozo: See you.
Operator: Thank you very much for your question. Our next question is from Mr. Bob Ford from Bank of America. Please go ahead.
Bob Ford: Good morning, everyone, and thanks for taking my question. Camilo, you mentioned doubling down on price. In the prepared remarks yesterday, you also mentioned some compelling merchandising initiatives at Sam's. Your biggest expense is cost of goods sold. How much more can Bentonville do to lower your COGS and really drive greater differentiation?
Camilo Cañedo: Hey, Bob. Thank you for your question. I think that the benefit that we have in being part of the global company is to be able to leverage our global suppliers as well. These efforts are going to continue to resonate as we partner on global negotiations as well. I think this is going to be some of the untapped things that we have had for the last few years. We also believe that the innovations that we are seeing globally have been helping us to accelerate and invest over the past few years here in Mexico. As we said in the remarks, this is the journey that we started a few years ago, and we are starting to see the benefits of this.
Camilo Cañedo: And what we will continue to see is now even more platforms coming our way, platforms for both retail that are going to help us reduce implementation costs for SG&A, as we already have solutions global scale that we do not have to invent from scratch. Maybe what I would just summarize in saying is between global sourcing, that we are going to be able to maximize global partnerships, technology that is already existing in Walmart Inc., and productivity efforts that we are already doing, we believe is going to see benefits across different levels of the P&L.
Camilo Cañedo: The timing is always going to be as fast as we can go. We are going to be working to bring these things here, first in the short term, but it is going to be a prioritization that we are going to have to work through.
Bob Ford: Thank you very much.
Operator: Thank you very much for your question. Our next question is from Mr. Andrew Ruben from Morgan Stanley. Please go ahead.
Andrew Ruben: Hi. Thanks very much for the question. I would like to dig in a bit on the trends in Walmart Connect advertising. You had a couple strong quarters in Q1 and Q2, then a fairly sharp deceleration in Q3. First, I would just like to understand the drivers of the quarterly choppiness, and then as we think about the multi-year goal you have in place, how you see yourselves on track for that, and what remains needed to hit the target of multiplying the business as you previously laid out. Thank you.
Karthicka Krishnasamy: Hi, Andrew. This is Kalkita. Good morning. I will take that one. We saw a lot of tailwinds in H1 due to football, and brands invested quite a bit in H1, and hence the trend change. We are normalizing to previous trend levels. If you look at our year to date, we are still over north of 20% comp, and we are 200 basis points better than last year. We will continue to see momentum in this business, and we have big plans for this for next year, too.
Andrew Ruben: Thank you.
Operator: Thank you very much for your question. Our next question is from Mr. Ulises Argote from Santander. Please go ahead.
Ulises Argote: Hi. Thanks for the space for questions. I wanted to ask on the main drivers we are seeing there behind the differences in regional performance. Just to understand, is it macro? Is it competition? Is it a combination of factors? Maybe any learnings from the regions like the North and the South that improved during the quarter and that could help maybe drive the rest of the portfolio going forward? Thank you.
Cristian Barrientos Pozo: Sorry, Ulises, you mentioned about the regions. You mentioned including Central America. I did not hear you very well.
Ulises Argote: Oh, yes. Sorry. No, I was referring to the regions in Mexico, kind of the different performance that we saw there, just to understand the drivers behind those.
Cristian Barrientos Pozo: I do not remember if we separated the regions on our webcast. We comment a little bit. We are seeing, let me say, tough competition, let me say, in Mexico City, Valle de Mexico. We are seeing a very good performance in the north in our business. We are doing a lot of things trying to better connect with the customer. Maybe I can share with you that we are in the middle of a project to testing the stores of the future in Monterrey. We are doing a lot of effort there with Bodega Supercenter and Sam's, trying to better connect with our customers. So far, we are seeing a very average performance in all the regions. We are seeing good performance in the north, as I mentioned before. South is going well.
Cristian Barrientos Pozo: Metro area, let me say, Valle de Mexico, is a little bit more, let me say, low. All are growing, but different situation versus north and the south.
Javier Andrade: Just maybe to add to what Cristian was saying, I think part of what we are seeing in Valle de México center is customers are continuing to split their basket. They are trying to find the best alternative in these times where they are continuing to pressure, especially on discretionary spending. For us, the focus is going to be to continue to win in price, bring back everything that we are doing for both Bodega formats, Walmart formats, across the different sizes of formats that we have, and make sure that we gain back the entire basket so they do not have to split or make choices of where to buy.
Ulises Argote: Perfect. Thanks so much for the color.
Operator: Thank you very much for your question. Our next question is from Mr. Álvaro García from BTG Pactual. Please, go ahead.
Álvaro García: Hey, good morning. Thanks for the space for questions. My question is on sort of the transformation we are seeing at Bodega and at Walmart. I know we have spoken about SKU rationalization. In the past, you have now announced this great campaign, Precios que no se tocan. So I guess, Cristian, how far are we, time-wise, from where you would want to see the stores, and where are we in SKU rationalization? I know part of it was going to potentially transfer into the larger Bodega stores and potentially into Walmart. Not into Walmart, sorry, but into the larger Bodega stores. Yeah, any color on where we are in that transformation would be very helpful.
Javier Andrade: Yes. Thank you, Álvaro, I will take that. Basically what we are doing in the assortment, I just want to clarify something, we do not have a project just to reduce SKUs. We are obsessed with building the best assortment for each of the customers of the different banners that we have. I am going to give you a view of where we are, but we already released 55 categories with this new strategy, and that accounts for almost 35% of the sales of the business in each of the formats. Those modulars will be deployed in Q1 next year. Then we will have another 120 categories that will start being implemented in Q2 and Q3 next year. Basically, those other 120 categories represent another 35% of the sales. So we changed the way we approached the assortment, modulars, private label, and productivity for the stores.
Javier Andrade: I think that we will finish this transformation for each of the formats for a total of 2027, but start in Q1. Basically, it is very important for all of you to know, is we need to shift the mindset. One of the learnings we had was we are not going to be chasing number of SKUs just to be productive. We just need to increase sales by having the best assortment for the customer, and then the outcome is going to be reducing days on hand and being more productive so we can really drive EDLC and invest in price. So, giving you color of this project, end of 2027, we should have finished with all of the categories in each of the formats.
Álvaro García: Thank you very much. Is it fair to assume that there might be some sales weakness associated with some of these changes in these quarters that we are seeing now?
Javier Andrade: It should not. Every decision we make about assortment is to sell more. What we can see, for example, if we reduce the assortment in Bodega Aurrerá, then we can have a headwind in markdowns and trends, but it is going to be not permanent, and we will recover with the new margin mix and the new assortment for each of the banners. So we should not expect an impact on these assortment changes.
Álvaro García: Thank you very much.
Javier Andrade: You are welcome.
Operator: Thank you very much for your question. Our next question is from Mr. Antonio Hernández from Actinver. Please, go ahead.
Antonio Hernández: Well, a quick one regarding the Walmart Express and Walmart now using basically the same banner name. Is it because the customer value proposition is basically the same, but the proximity is the only factor that differentiates one from another, or is that the approach that you are taking? Thanks.
Camilo Cañedo: Hi. Look, the way we think about Walmart is that we have been working over the past few years to integrate the proposition and making one holistic banner. Walmart Express, in a way, is just a subset now of a Walmart Supercenter. We have aligned more and more with assortment. We synchronize full prices. The more that we can fully integrate both formats, it is going to provide more leverage for us in terms of marketing, in terms of how we operate the network. We believe, and the network example that we gave during our earlier remarks about how being able to choose which stores is the one that is going to be closest to the customer to serve them faster is a good example of why we need to continue to integrate if we see sales from one format to the other.
Camilo Cañedo: We are still very happy with how the format plays within our portfolio, driving convenience, relevance, and a neighborhood experience to the neighborhoods where we have presence with them. We will continue to integrate and, again, just brand the whole Walmart experience as one integrated, regardless of the size of the format that we have.
Cristian Barrientos Pozo: If I may add, Camilo, and Antonio, thank you for your question. We see Walmart Express as a complement of Walmart Supercenter. It is a different size. We, this Walmart Express play a role in, let me say, in assortment to have a subset assortment for Walmart Supercenter and also with price parity. These allow us to use the fleet of more than 100 stores that we actually have here in Mexico, and so the same in Central America, to play a role, to provide more speed, accuracy, and be closer to the customer. We are ready to take advantage of this strength that we already have. That is going to be the idea of Walmart and Walmart Express playing together as an omni view. I do not know if Karthicka, if you wanted to complement on that, maybe I will pass over to Karthicka.
Karthicka Krishnasamy: Yeah. I would say the biggest trend here is how do we create one integrated network so we can provide the assortment that the customer wants at the speed at which they want it. This could help us by choosing, by merging this and the closest fulfillment, we are able to shave off 30 to 40 minutes in our delivery speed. You can get your delivery from our Subanco Express store 30 to 40 minutes faster than actually getting it from Torayo Supercenter. This is going to help us achieve speed at a greater rate and serve our customers better.
Antonio Hernández: Okay. This very last quarter, was performance similar or still very different as in previous quarters?
Camilo Cañedo: Performance overall in Walmart, it was very similar to how Javier expressed about Bodega. We continue to see general merchandise, especially in this quarter, lagging a little bit as consumers have been making choices on where to spend the discretionary spending, following a little bit the high spending season after the World Cup. We expect this to pick up, and this is where we are working towards Q4 to make sure that we have a great season for there during the Buen Fin and El Fin Irresistible, where we are working to enhance the amount of items that we are making promotional, deep down and double down on pricing and speed items that customers really want during the season to make sure we are also there.
Antonio Hernández: Perfect. Thanks a lot. Have a nice day.
Camilo Cañedo: Thank you.
Operator: Thank you very much for your question. Our next question is from Joe Thomas from HSBC. Please go ahead.
Joe Thomas: Good morning, everyone. Thank you for taking the questions. I have two. First of all, can you just please talk about the ticket, which is up, but still you are seeing price perception up. I am just wondering what is going on, how to square those two against each other. Is it basket size? What is going on with general inflation? Perhaps you can give some color there. Then, the final question would be around the weak peso and what that means for inflation in the business with respect to imported goods and how you would expect to manage that into 2027. Thank you.
Cristian Barrientos Pozo: Thank you, Joe. As you can remember, a year ago, we began with these priorities, how can we accelerate or begin a more EDLP company availability and drive e-commerce. I think, as you mentioned before, we are seeing a huge reaction from the customer because at the end, one metric is to drive price gap against the market.
Cristian Barrientos Pozo: But the most important part for us is the price perception, and we are super excited to see every quarter more than 200 or an average of 260 basis point improvement price perception, both because of the assortment, because we have the right assortment, because we have the right campaign and marketing, because we have the right format, and also because we have the right private brand set to better serve the customer. So I think this is something that is going on today.
Cristian Barrientos Pozo: We are seeing more contraction in the basket now because the consumer is a little bit contracted today. But I am super happy or super excited to see price perception because at the end, price perception drives traffic, and that is the trend that we are seeing today. With that, I will pass over to Camilo to talk a little bit about the weaker peso, as you mentioned before, and how we wanted to manage this 2027.
Camilo Cañedo: Joe, definitely, currency certainly is one of the variables that we are always monitoring closely for plan for next year. A weaker peso can definitely put pressure on the cost and the important merchandise. I would say first is a high percentage of our assortment that we have in the store is actually local, and it is close to 80% of everything that we sell in our stores. That puts us in a good position for us to be able to offset some of this pressure for merchandise specifically. Second, I would say, and double down on what we said before, EDLP is at the core of what we do. What EDLP is going to help us, we are going to continue to work closely with suppliers to be able to leverage our sourcing capabilities.
Camilo Cañedo: We believe that our global sourcing capabilities actually have more upside today despite some of the FX headwinds that we are going to be facing.
Joe Thomas: Thank you very much. That is clear. Just to come back on that first question, what are you seeing on the ticket in terms of the mix between basket size and price inflation?
Camilo Cañedo: I think, as Cristian was alluding, we continue to see the ticket going up because of mix, especially as we make certain categories continue to grow and accelerate investing price. Yet the rest of the categories continue to help us drive forward positive mix and ticket. Basket is definitely being reduced. We do not have a specific number right now. We can follow up with that if this is something we share. Overall, we believe the assortment strategy that we are following and bringing more assortment to our customers, the right assortment to the right format, is what is helping us to accelerate the ticket size.
Javier Andrade: Yeah, I will also add, Joe, that one of the things that we are doing is we changed the way we approach the pricing investments to be more accurate on the specific baskets that matter the most for the customers, and that is why we are seeing a good price perception. All across the assortment, we are competitive, but we are being very intentional, specifically by banner in opening price points, good versus basket for the different formats, so we can be more intentional and accurate on how we spend the money or invest the money in price. As Camilo said, we are seeing some basket splits because of the customer behavior, but we are now creating a halo effect in the total box with the mix of the right assortment.
Javier Andrade: Also in digital, we are doing very good because we have a better ticket with GM and high velocity items from food, and now with Walmart and Bodega Aurrerá, we see the same.
Joe Thomas: Thanks very much.
Javier Andrade: Sure.
Operator: Thank you very much for your question. As a reminder, if you would like to ask a question, please press star 8 on your telephone keypad. Our next question is from Mr. Federico Galassi from The Rohatyn Group. Please go ahead.
Federico Galassi: Hello, guys. Thank you for taking my question. Just one question. We can see that the numbers in Walmart was negative below on that, but even on that, the last number was negative. I am thinking more in the big format. Beyond the weakness in the consumer, do you see and even when we compare with Sam’s Club, the growth in same-store sales is remarkable. Do you see a change in how the consumer is buying in general, in particular in Walmart, and you mentioned what is happening in Walmart Express. Do you believe that could be some cannibalization at the end? Not inside of Walmart, no, but going to smaller, more proximity stores and more Sam's stores in general? Thank you.
Javier Andrade: Okay. Thank you, Federico. What I am seeing in Walmart formato big format is what we shared about the impact of GM and the discretionary spend, because we have a very big mix in GM in that format. I do not see necessarily that we are seeing cannibalization through formats. One of the advantages that we have as a multi-format company is that if we continue progressing with this new architecture and assortment for each of our banners and strengthening the CVP of the banners, we have the opportunity to overcome any situation and serve every customer in Mexico. Obviously also with OPD, we can get to families that does not go to the stores physically. I do not see a structural problem going forward. I think we are better positioned now to Q4.
Javier Andrade: Because of the GM pullback, we are also reviewing our Fin Irresistible and Buen Fin campaign, so we can be very intentional and aggressive in specific categories. The other thing is, to your point, we know proximity is important, and that is why we are also changing the assortment in Bodega Aurrerá Express, and we are going to be expanding the pilot test that we have to more than 400 stores in the upcoming 3 or 4 weeks.
Cristian Barrientos Pozo: If I may add, Federico, as I mentioned before, Walmart Express play a super role in terms of become omni because Walmart Express will provide more speed to our customer because they are closer to the communities. That is why we changed the brand years ago. Right now, Walmart Express is a subset assortment of Walmart Supercenter, and also it is price parity with Supercenter. So it is going to be agnostic where the customer shop, and we choose the best way to deliver the products using algorithm to allow us to be always faster and more accurate to the customer. We see this as a super complement, and this is one of the strengths that we have today.
Federico Galassi: Thank you so much.
Operator: Thank you very much for your question. Our next question is from Andrés Ortiz from BTG Pactual. Please go ahead.
Andrés Ortiz: Hello. Good morning. Thank you for taking my question. I would like to ask you your first view on the possible impact, if any, from the tax reform in Mexico into 2027 and later on. If you could quantify what would be the effective tax rate that you will have in this quarter, excluding this adjustment you made on taxes, that would be great. Thank you.
Camilo Cañedo: Andres, this is Camilo. First, I will comment on the tax reform. Yes, we are following the proposed changes very closely. We are still evaluating the potential implications in the business for us and the keys that we are going to have to build and assess as this gets finalized. The way we are approaching it is going to be pretty straightforward. First, we are going to start to prioritize our strategy and making sure that we can continue to prioritize price and everything that we do in P&L for our consumers. Then we are going to start evaluating our capital allocation, the choices, while protecting our customers' value proposition, understanding that we want to prioritize digital growth and our store expansions in foodstuff.
Camilo Cañedo: There's probably more time that we're going to take to be able to give a specific answer when time comes, but no more to say at the moment. Your second question was around
Andrés Ortiz: Yeah.
Camilo Cañedo: The second part of your question was about our tax rate for this quarter. This quarter, the tax rate was north of 30%, and this is primarily again reflecting adjustments associated with finalizing prior years' taxes calculation. This is part of our normal financial reporting and tax compliance process. We do this on a regular basis, and we keep reconciling tax positions informations once we've closed the periods. Those results can sometimes result in adjustments being recognized in particular quarters, but it definitely does not indicate a structural change in the underlying tax profile we have. And for context, we still believe that this full year, we're going to be able to have an effective tax rate below last year's effective tax rate.
Andrés Ortiz: Great. Thank you very much.
Operator: Thank you very much for your question. That was the last question. I will now hand over to Mr. Salvador Villaseñor for final comments.
Salvador Villaseñor: Thank you very much for your interest, as always, in our company. See you next quarter as well. Thank you very much.
Camilo Cañedo: Thank you. Bye-bye.
Salvador Villaseñor: Bye.
Operator: Walmex would like to thank you for participating in today's audio conference.
Salvador Villaseñor: Adios.
Salvador Villaseñor: You may now disconnect.
