Salvador Villaseñor: I am Salvador Villaseñor, Head of Investor Relations for Walmex. Thank you for joining us to review our Q3 2026 results. Today, I am joined by Cristian Barrientos Pozo, our President and CEO of Walmart de México y Centroamérica, and Camilo Cañedo, our Senior Vice President of Administration and Finance. The date of this broadcast is 27 October 2026. Today's broadcast is being recorded and will remain available at www.walmex.mx. Before we begin, I would like to remind you that this broadcast is the property of Walmart de México, S.A.B. de C.V. and is intended for the company's shareholders and the investment community. It must not be reproduced in any way. This broadcast may contain certain references regarding the future performance of Walmart de México, S.A.B. de C.V., which should be considered as good faith estimates made by the company.
Salvador Villaseñor: Such references reflect only management's expectations and are based on information currently available. Actual results will always be subject to future events, risks, and uncertainties that could materially impact the company's actual performance. I will now turn the floor over to Cristian. Please, Cristian.
Cristian Barrientos Pozo: Thank you, Salvador, and good afternoon to everyone, and thank you for joining us today. Before we begin, I would like to thank all our associates for their continued commitment and their execution throughout the quarter. Your focus on serving our customers and members every day continues to be fundamental to our business. This quarter, we saw more evidence that the changes we are implementing are working. We are investing, moving faster, and strengthening the fundamentals. This is reflected in traffic, improved relative market share performance, and e-commerce momentum. These advances encourage us, but we are not satisfied. Our task now is to turn these early signs into more consistent and widespread performance across the business. We know what we need to do, and we are focused on executing with urgency. Let me now share the highlights of the quarter.
Cristian Barrientos Pozo: At the consolidated level, revenue grew 3% and 3.6% constant currency. In Mexico, revenue increased 3.1%, while Central America recorded 6% growth in constant currency. In Mexico, same-store sales grew 1.7%. Despite a moderate consumption environment, our relative performance improved. We widened our spread against ANTAD self-service same-store sales by approximately 230 basis points, our second widest quarterly spread since mid-2021. In Central America, same-store sales grew 4.8%, with solid performance in most markets. Costa Rica also showed encouraging progress, returning to market share gains and recording several consecutive months of traffic improvement. Let me share the operational elements that support these results. Starting with price, our private brands continued to gain penetration with an increase of approximately 100 basis points versus the previous year. Growth was again led by Sam's Club and Bodega Aurrera Express among the formats.
Cristian Barrientos Pozo: We also continued to advance in our transition toward a more consistent EDLP model. The actions we have implemented regarding longer rollbacks, greater price stability, and fewer price changes are already underway. An initiative that is helping us reinforce this approach is the Prices That Don't Change campaign. Through this program, we keep prices for at least 90 days on more than 4,000 essential products at Bodega Aurrera and Walmart in collaboration with our suppliers. These items have recorded double-digit growth and are present in five out of every 10 of our customers' baskets. Availability also continues to move in the right direction. Total availability in self-service stores improved 340 basis points year over year and 90 basis points compared to the Q2 2026.
Cristian Barrientos Pozo: We completed inventory localization storewide, leaving the perishables area for the Q1 2027, and we improved inventory days in Mexico by three days. We are improving reliability through better execution and greater inventory accuracy. In e-commerce, GMV grew 15%, while net sales increased 16%. Store delivery, as we will now call what we previously named On-demand, grew 21% year over year, driven by continuous improvements in speed and customer experience. Marketplace also showed significant improvement with 12% growth year over year, supported by a broader catalog, a focus on the seller experience, and significant advances in speed. During the quarter, we also launched two important digital capabilities that reflect how we are increasingly leveraging Walmart's global platform. Sparky, our AI-powered assistant, and Juanpa, at Bodega. Camilo Cañedo will share more details about both in a moment.
Cristian Barrientos Pozo: Additionally, our commercial solutions continued to gain scale. Bait recorded revenue growth of 26%, and reached 27.6 million active users, while Walmart Connect revenues grew 10%. Taken together, these are interconnected signs of progress, better fundamentals, a stronger customer experience, as well as improvements in traffic, market share, and digital trends. We are focused on sustaining this momentum and making it more consistent across formats and markets. Our three non-negotiables, everyday low prices, availability, and e-commerce acceleration, have been fundamental to strengthening the foundations of our business. They have helped us refine our execution, improve our customer value proposition, and advance on several of our key operating metrics. We believe we have built a stronger foundation, and that it is now time to build upon it to take the next step.
Cristian Barrientos Pozo: Looking ahead, we see the opportunity to evolve our approach and adopt a more holistic perspective on how we serve our customers and associates, and how we operate our business. Our customers expect value for their money, a relevant assortment, a great shopping experience, and a company they can trust. These are essential elements of our customer value proposition, and consistently meeting these expectations requires continuing to build on the fundamentals we have been strengthening. With this in mind, we are evolving our approach around three connected strategic priorities: strengthening our customer value proposition, accelerating digital, and maintaining everyday low costs through automation and productivity. These priorities are built directly upon our three non-negotiables. Everyday low prices and availability remain essential to our core proposition, while e-commerce continues to be a key part of our digital ambition.
Cristian Barrientos Pozo: At the same time, we are expanding our focus on assortment, particularly in perishables, and placing greater emphasis on simplification, automation, and productivity to maintain everyday low costs. This is not about a change in direction, but a natural evolution of the work we have been doing. We are encouraged by the progress made so far, but we know our performance must continue to improve. Our focus is to build on these foundations, execute with greater consistency, and translate that progress into stronger, more sustainable growth. With that, I hand it over to Camilo to present the results in greater detail.
Camilo Cañedo: Thank you, Christian, and good afternoon, everyone. It is a pleasure to be here with you for the first time and have the opportunity to share our results with the investment community. I want to highlight what I have seen in my first 90 days. First, the strength of our store network and the reach it provides us in Mexico and Central America. Second, the potential we can reach by leveraging Walmart's global capabilities in technology, sourcing, and automation, as well as the speed at which these capabilities are being integrated into the business. Third, the potential we have in e-commerce, where we have a solid presence and several capabilities already in place that will allow us to accelerate over time. I also see a clear opportunity to improve execution consistency and productivity throughout the business.
Camilo Cañedo: Walmex has great potential, and the encouraging signs we are seeing give me confidence in the actions we are taking. However, we need to accelerate the pace of improvement. Building on the priorities Christian just presented, let me share how we are strengthening our customer value proposition, accelerating in digital, and keeping costs low every day through automation and productivity. I will start with our customer value proposition, which focuses on price, assortment, and perishables, supported by improvements in availability. Our continued price investment helped improve our grocery price gap by 50 basis points year over year and 40 basis points quarter over quarter. More importantly, customers are recognizing that progress with a 260 basis point improvement in price perception year over year. Assortment is another important component to strengthen our customer value proposition. We are refining the assortment across all our formats to improve relevance and reduce unnecessary complexity.
Camilo Cañedo: At Sam's Club, for example, we are adding approximately 500 new items from the US and China, as well as local Mexican brands that our members value, but that we do not currently carry. Perishables is another important area of focus. We see an opportunity to raise our standards for quality, assortment, and execution across all formats, as proper execution in perishables is fundamental to customer trust, purchase frequency, and the overall experience. The second topic is accelerating digital, starting with delivery from store. As demand grows, we are expanding the number of delivery windows available to customers and members and working with our crowdsourcing partners to increase capacity. As a result, during the quarter, 75% of orders were delivered on the same day, an increase of 1,500 basis points year over year. Nearly 30% were delivered in under 2 hours, double that of the previous year.
Camilo Cañedo: Nearly 10% were delivered in under an hour, triple that of the previous year. We expect this to accelerate. We are also increasingly operating our store network and digital capabilities as an integrated system. By uniting Walmart Supercenter and Walmart Express under a single Walmart experience, we will soon be able to route every online order to the nearest store capable of fulfilling it, regardless of the format. This allows us to leverage our entire store network to improve availability, speed up delivery times, and offer a more seamless shopping experience. Currently, delivery from store reaches 84% of households in Mexico, more than 1,000 basis points above the previous year. Our expanding national reach, combined with faster deliveries, gives us a greater opportunity to attract more customers to shop with us more frequently. Marketplace grew 12% during the quarter after the challenges we faced in previous quarters.
Camilo Cañedo: We are moving toward a more balanced business, reducing our reliance on categories like computing, cell phones, and home appliances while expanding our presence in offline products. Across all categories, we are also expanding our seller base and reducing reliance on individual sellers. Cross-border trade now accounts for nearly 13% of Marketplace, an increase of approximately 1,000 basis points year-over-year, expanding the variety of the catalog available to customers. Walmart Fulfillment Services delivered nearly 50% of Marketplace orders, an increase of about 10 percentage points, improving speed and service levels. Together, a broader selection and a more robust store delivery ecosystem will support the acceleration of sales growth. Finally, as Cristian briefly mentioned, we launched One Hallway for Bodega and Sparky.
Camilo Cañedo: One Hallway greatly simplifies the shopping process for customers, giving them access to our entire catalog in one place while helping us improve convenience, speed, and ultimately, conversion and recurrence. So far, initial conversion rate readings indicate solid performance, and we are seeing strong customer adoption. The launch of Sparky is a good example of how we are leveraging Walmart's global capabilities. By relying on technology already developed in the United States, we were able to launch it in Mexico much faster than if we had developed a solution from scratch. This represents an important advantage as we continue to accelerate digital innovation. This is exactly the type of advantage we seek to leverage from Walmart's global technology ecosystem as we continue to strengthen our digital proposal in Mexico. Beyond the core e-commerce business, our commercial solutions also continued to grow.
Camilo Cañedo: Walmart Connect revenue grew 10% during the quarter, expanding the ways brands can connect with customers and partners through high-impact, measurable in-store advertising. Bait reached 27.6 million active users, with revenue growing faster than users. User growth accelerated again after a temporary slowdown related to the industry's customer registration process. Both businesses remain important components of our ecosystem and continue to strengthen the value proposition we offer to customers, partners, and business associates. The third topic is maintaining everyday low cost through automation and productivity. This is a multi-year process in which we have consistently invested, and we are now beginning to see more tangible benefits. Digital shelf labels are one example. We concluded their implementation in Walmart Express and are now beginning to extend them to Supercenter.
Camilo Cañedo: The automation of our main e-commerce fulfillment center last quarter is another example. Next year, the opening of our new distribution centers in Bajío and Tlaxcala should make this process even more visible. These investments are an important part of our productivity agenda. They help us simplify processes, improve speed and execution, and support our everyday low-cost model. Over time, these investments will strengthen our relative cost position and help us remain more competitive. We are still in the early stages of fully capturing the benefits, and improving productivity and execution consistency remains an area of focus for us. Through these priorities, we are beginning to see the benefits of better execution and focused investments. Our focus is to make all these benefits replicable at scale while building a simpler and more productive operating model.
Camilo Cañedo: With this context, I will now provide details on the business performance during the quarter. Starting with Mexico, total revenues grew 3.1% year-over-year. Gross margin contracted 10 basis points compared to the previous year. The contribution from our higher margin commercial solutions helped partially offset the investments to improve our price gap. General expenses represented 17.2% of sales, increasing 50 basis points year-over-year. The increase mainly reflects the investments we continue to make to drive growth, including new stores, e-commerce, technology, and our associate value proposition, partially offset by productivity initiatives and efficiencies in our cost structure. Improving productivity and accelerating the benefits of automation remain important priorities to ensure that over time, our expenses grow at a pace closer to that of sales. All of this resulted in an EBITDA margin of 10.4%, 30 basis points below the same quarter of the previous year.
Camilo Cañedo: Regarding same-store sales, Mexico grew 1.7%, with a 1.6% increase in ticket. Customer traffic remains stable compared to the previous year for the first time in the last nine quarters, which is an encouraging sign. By format, Sam's Club led the growth again. By region, performance was strongest in the North, while by merchandise division, groceries and consumables led the growth. Moving forward, we will report Walmart Supercenter and Walmart Express formats together under Walmart. Now that we have synchronized pricing, we see them as complementary proposals, with Express being a smaller version of Supercenter that provides convenience and a closer experience. As the store delivery example I mentioned earlier shows, we are increasingly managing both formats as a single integrated network.
Camilo Cañedo: During the Q3, our same-store sales outperformed the growth of ANTAD self-service and clubs by approximately 230 basis points, representing our second highest spread in the last 21 quarters, only behind the Q3 of 2025. Now, let's review the results for Central America for the Q3. Please note that in this section, I will refer to figures excluding the foreign exchange effect. Total revenues increased 6% compared to the previous year. Although Costa Rica continues to impact the overall result, it showed a significant improvement compared to previous quarters. Excluding Costa Rica, the growth would have been 9.8%. Both the gross margin and general expenses remained unchanged year-over-year at 24.7% and 18.4% of sales respectively, which resulted in an EBIT margin of 9.2%, equal to that of the previous year. Regarding same-store sales, during the Q3, Central America reported growth of 4.8%.
Camilo Cañedo: Excluding Costa Rica, this growth would have been 8.7%. Costa Rica continues to operate in a complicated environment, with deflation still affecting performance, particularly in food and beverages. Despite this environment, we are seeing encouraging signs that our recovery plan is gaining momentum. During the quarter, Costa Rica returned to market share growth and traffic has been improving for several months now, with perishables leading the improvement. At a consolidated level, during Q3, total revenues grew 3%, which is equivalent to a growth of 3.6% without exchange rate effects. The gross margin remained unchanged compared to the previous year at 24.7% during the quarter, while general expenses expanded 40 basis points to 17.4% of sales. This represents an increase of 6.3% constant currency. The EBITDA margin contracted 30 basis points to 10.2%, while the net income margin contracted 50 basis points to 4.4%.
Camilo Cañedo: Additionally, our effective tax rate was higher this quarter, mainly as a result of non-recurring adjustments related to the finalization of the previous year's tax calculations. We expect our effective tax rate to normalize in Q4, bringing the full-year rate relatively in line with our original expectation. Before concluding, let me provide a summary. We are encouraged by the progress we are observing in our fundamentals, particularly in traffic, market share gains, e-commerce, and in Costa Rica. While there is still work ahead, especially in Bodega, these improvements reinforce our confidence that we are moving in the right direction. Our focus remains on executing our strategic priorities with urgency, leveraging our investments and productivity initiatives to translate this progress into more consistent and sustainable growth. With this, we reaffirm our 2026 guidance.
Camilo Cañedo: We expect consolidated sales growth between 3.5% and 4.5% constant currency, with an EBITDA margin slightly below the prior year level, while maintaining strong financial discipline. Finally, a brief reminder. Tomorrow, we will have our live audio Q&A session at 6:30 AM Mexico City time. Please contact our investor relations team if you have any questions. Thank you for your continued interest in our company, and we will see you tomorrow.
