Liverpool Navigates Soft Demand and World Cup Disruption, Trims 2026 Guidance
Q2 2026 results show resilience via financial services and real estate, but softer consumer spending and a platform migration weigh on outlook.
ELPQF · Earnings Call · 2026-07-28
A Quarter of Unusual Headwinds
El Puerto de Liverpool's second quarter unfolded against a backdrop of soft consumer demand, heightened competitive intensity, and the once-in-four-years distraction of the FIFA World Cup. The CFO, Gonzalo Gallegos, opened the call by acknowledging the difficulty: “Consumer demand remains soft, competitive intensity increased across several categories and discretionary spending continued to be concentrated around key promotional events.” — Gonzalo Gallegos, Chief Financial Officer · 2026-07-28 Despite this, the company's diversified model kept the top line positive — consolidated revenue grew 1.5% to MXN 57.3 billion, with all three segments contributing: financial services up 9.9%, real estate up 8.6%, and retail up 0.4%. The World Cup was a double-edged sword. It provided a bright spot in sporting apparel and TV/video, but “it also reduced traffic across most other categories, particularly in apparel,” — Gonzalo Gallegos, Chief Financial Officer · 2026-07-28 Gallegos explained. The net effect was negative, and it hit Suburbia hardest given its apparel-heavy mix. Suburbia same-store sales fell 6.4%, compared to Liverpool's +1.7%.Suburbia and the Digital Transition
Suburbia's weakness was not just about the World Cup. The company intentionally reduced clearance activity and continued repositioning categories like motorcycles and mobile phones, prioritizing risk appetite and profitability over volume. Gallegos was candid: “Even though we are not satisfied with the level of sales growth, we are very satisfied with the improvement in gross margins, also with our cost control and the overall profitability of the business.” — Gonzalo Gallegos, Chief Financial Officer · 2026-07-28 Indeed, Suburbia's operating profit improved year-over-year despite the sales decline. A second major theme was the completion of the e-commerce platform migration from Oracle ATG to commerce tools. This was a key strategic investment but caused temporary GMV disruptions. Gallegos noted: “The migration of the e-commerce platform have a higher impact on digital GMV that we initially expected as there were some system-related disruptions that affected the performance during the quarter.” — Gonzalo Gallegos, Chief Financial Officer · 2026-07-28 While digital GMV still grew 4.8% at Liverpool, the impact was larger than expected and will taper off in the third quarter. The company sees the new platform as a foundation for faster innovation and better customer experience, which is why they're accepting the near-term pain.Guidance Cut Reflects Reality
The most definitive signal came in the guidance revision. Management trimmed full-year same-store sales for Liverpool to 2.5–3.5% (from 4.5–5.5%) and for Suburbia to –1% to +1% (from 5–6%). EBITDA margin guidance was lowered to 14.5–15.5% from 15.5–16%. The CFO explained:This pragmatic cut reflects a broader consumer slowdown that is not unique to Liverpool. On the prior quarter's call, management had already flagged a cautious environment: “It's pretty clear that shoppers are focusing on price and maybe even waiting for some of the big events.” — Gonzalo Gallegos, Chief Financial Officer · 2025-10-22 (from the October 2025 call). Now, with the second half facing easier comparisons but still soft demand, the company is betting on margin discipline and the growing contribution of financial services and real estate to offset the retail deceleration.The operating environment remains challenging... We believe it is appropriate to align our expectation with current market conditions.