Alseab De Cv Stock

Good morning, everyone, and welcome to Alsea's Second Quarter 2026 Earnings Video Conference. My name is Gerardo Losoya, and I'm Head of Investor Relations and Corporate Affairs. Today, you will hear from our Chief Executive Officer, Christian [indiscernible] and Federico Rodriguez, our Chief Financial Officer.

Before we continue, our friendly reminder that some of our comments today will contain forward-looking statements based on our current business view and that future results may differ materially from these statements. Today's call should be considered in conjunction with disclaimers in our earnings release and most recent [ Bolsa Mexicana de Valores ] report.

The company is not obliged to update or revise any such forward-looking statements. Please note that unless specified otherwise, the earnings numbers referred to are based on pre-IFRS 16 standards. I will now hand it over to Christian for his initial remarks. Please go ahead, Chris.

Thank you, Gerardo. Good morning, and thank you all for joining us in Alsea's Second Quarter 2026 Earnings Video Conference. I will begin with an overview of our performance during the quarter, highlighting key operating trends across regions and brands as well as our progress in digital expansion and ESG initiatives.

Federico, our CFO, will then walk you through our financial results in more detail. Before going into quarterly figures, I would like to briefly step back and provide some context on how the quarter evolved. As anticipated at the start of the year, consumer demand remained uneven across our markets and became more challenging during the second quarter particularly in Mexico.

April was the softest month, reflecting weaker discretionary spending and lower traffic across much of the industry. Conditions improved slightly in May and further in June, but the overall environment remained more cautious than we had initially expected. The FIFA World Cup generated additional customer traffic during June, particularly across Chili's and Domino's Pizza.

While the impact was relatively in line with our expectations, it helped partially offset the weakness observed in April and represented a positive contribution in the quarter. While the operating environment was challenging during the quarter, we maintained disciplined execution, supported by the strength of our brands and our continued focus on profitability, customer experience and cash flow generation.

With that context, let me provide an overview of our quarterly performance, including our financial results, regional highlights and key brand developments, along with updates on our digital advancements, ESG initiatives and expansion strategy.

In the second quarter, we reported a 0.9% year-over-year decrease in total sales, reaching MXN 21 billion or a 3.5% increase. Excluding foreign exchange effects, same-store sales grew by 2.6%. EBITDA decreased 6.2% in the second quarter, reaching MXN 2.8 billion with a margin of 13.5%, decreasing by 70 basis points year-over-year.

Regarding brand performance in the second quarter, Starbucks Alsea same-store sales increased by 0.6% versus the same period a year ago. For Starbucks Mexico, same-store sales decreased by 2%, reflecting a challenging environment, combined with a deliberate reduction in promotional activity as we prioritize profitability and an enhanced customer experience across our stores and to comparison base in April of last year due to the peanuts campaign.

For Starbucks Europe, same-store sales increased by 2.2% with solid performance in Spain and the rest of the markets, while France continued to lag, but with trends improving towards the end of the quarter and double-digit growth in the Netherlands and Belgium. Finally, in South America, same-store sales rose 10.5%, driven primarily by Argentina. Excluding Argentina, same-store sales increased 3%, supported by a strong performance in Colombia. Domino's Pizza Sa posted a 2.7% increase in same-store sales.

In Mexico, Domino's same-store sales increased 3%, reflecting a gradual improvement over the course of the quarter, partially in June, supported by FIFA World Cup. In Spain, same-store sales increased by 1.6%, supported by continued solid commercial execution. In Colombia, Domino's same-store sales increased 6.9%, sustaining the strong momentum seen in recent quarters.

Burger King Alsea same-store sales, excluding Argentina, decreased 2.5%, showing a slight improvement over the course of the quarter. In Chile, same-store sales decreased 5.7% due to an economic slowdown across the country. The Foodservice restaurant segment delivered a 3.6% same-store sales growth, remaining one of the most consistent performance -- performers during the quarter.

Full-service restaurants in Mexico increased by 5.4%, led by outstanding performance at Chili's with a particularly strong June growing double digit, driven by the FIFA World Cup, while also Bips also delivered solid growth, maintaining its consistent execution and its attractive value and innovating offerings. Same-store sales for full-service restaurants in Spain grew 1.3%, reflecting growth broad-based across most of the portfolio.

During the second quarter, we opened 30 new stores, 20 corporate units and 10 franchises, continuing to expand our presence across our key markets while maintaining a disciplined approach to capital allocation. Although the operating environment has become more challenging, our expansion strategy remains unchanged as paybacks and returns of the new openings remain healthy.

We continue to prioritize opportunities that meet our return thresholds, balancing new unit growth with investments in our existing store base. Store remodels remain an important part of the strategy as they continue to renovate attractive returns while enhancing and elevating customer experience. We also continue advancing our portfolio optimization efforts.

During the quarter, we completed the divestment of Arches in Colombia, allowing us to further concentrate our resources on the brands and markets where we see the greatest growth opportunities. At the same time, we continue evaluating the potential divestment of other brands within Alsea's portfolio in order to improve profitability and simplify our business model.

In addition, last week, we successfully opened our first Chipotle restaurant in Monterrey. While still early, we are encouraged by the initial customer response and remain excited about the opportunity to continue developing the brand in Mexico. Our digital platforms continue to be key drivers of growth. By the end of the quarter, loyalty sales increased 8%, reaching MXN 5.5 billion, representing 24.3 million orders and contributing 27.9% of total sales.

We also surpassed 8.4 million users -- active users across our loyalty programs, confirming the strength of our digital engagement. Additionally, we served 34.7 million digital orders in the quarter, totaling MXN 8 billion, which represents 40.7% of our total sales. Turning to our ESG initiatives.

During the quarter, we published our 25th integrated annual report, reaffirming our commitment to creating long-term sustainable value through our sustainability model. As always, the report is available on our website for those interested in a more detailed review of our ESG initiatives and performance. We also completed a global climate risk assessment covering more than 3,600 sites across Mexico, South America and Europe, representing approximately 73% of our portfolio.

This strengthens our ability to identify and manage climate-related risks across our operations and supply chain. Finally, through Fundacion Alsea, we continue to expand our social impact. As of the end of the quarter, we have donated more than MXN 53 million and delivered over 490,000 meals, benefiting more than 16,000 people through our initiatives focused on food safety, food security, education and employability.

In Europe, our 5 brands also participated in the [ Producto Concorzon, ] so product with a Heart campaign raising more than EUR 100,000 to support nutrition and well-being projects through [ Fundacion Aa ] in Spain. Let me now turn it over to Federico, our CFO, who will provide further insight on the financial performance.

Thank you, Christian, and good morning, everyone. The sales decreased by 0.9% in the second quarter, mainly due to weaker consumption in Mexico and a negative foreign exchange effect. Excluding the foreign exchange effect, sales increased 3.8%. In the second quarter, sales in Mexico were up 4.2% to MXN 12.2 billion, mainly driven by the full service restaurant segment. In Europe, sales decreased by 7.4% to MXN 5.9 billion, while in euro terms, sales increased by 4%, mainly driven by the consistent performance in Spain.

Finally, South America sales fell 6.9% to MXN 2.9 billion. EBITDA decreased by 6.2% with a margin contraction of 70 basis points, mainly due to a weaker consumption environment in Mexico and South America, a stronger peso that represents MXN 65 million of conversion and a one-off in the second quarter of last year related with the selling of 10 stores of Domino's Pizza to one of the franchisees.

In Mexico, adjusted EBITDA increased 1.3% year-over-year with a margin contraction of 70 basis points, mainly due to reduced operating leverage resulting from a slower same-store sales growth, partially offset by a positive impact of some dollarized input costs given the appreciation of the Mexican peso.

In Europe, the adjusted EBITDA decreased by 10.5% year-over-year, driven by the foreign exchange effect. Excluding this effect, adjusted EBITDA grew 8%, reflecting lower cost of certain raw materials and efficient control in operating expenses. In South America, adjusted EBITDA decreased by 15.1%, mainly driven by the foreign exchange effect as well as pressure on certain input costs.

Net income for the second quarter decreased 48.4% year-over-year, reaching MXN 528 million, reflecting a less favorable foreign exchange impact on the financing results as this quarter recorded a foreign exchange loss of MXN 81 million compared to the noncash FX gain of MXN 608 million recognized in the same period last year due to the dollar bond held in the balance sheet.

The CapEx for the first 6 months of the year totaled MXN 1.8 billion. Out of this total, 78% was allocated to store development initiatives, including the opening of 20 new corporate units, the renovation and remodeling of existing locations and equipment replacement across the brands.

The remaining 22% was directed at digitalization projects. By the end of the second quarter, the pre-IFRS 16 total debt increased by MXN 2.1 billion year-over-year reaching MXN 35 billion. The company's net debt, not accounting the impact of IFRS 16 was MXN 2.5 billion, which is MXN 501 million less than it was at the same time last year.

This increase reflects the discipline in free cash flow through a more efficient CapEx, a reduction on the cost of financing aligned with the refinancing of the different facilities and a more predictable working capital. Consolidated net debt reached MXN 44.9 billion, including leases. At the end of the quarter, 99% of the debt was long term with 71% denominated in Mexican pesos and 29% in euros.

We remain focused on maintaining a healthy capital structure supported by proven financial management. By the end of the quarter, the cash position [Audio Gap] closed the quarter at 2.8x, while the net debt-to-EBITDA ratio stood at 2.5x. Since establishing the 2026 guidance, the consumer environment in Mexico has been more challenging than we initially anticipated, particularly during the early part of the second quarter.

April was the softest month of the year from a consumer demand and traffic perspective and weighted meaningfully on our performance during the period. Encouragingly, trends improved progressively as the quarter advanced, with May performing better than April and June improving further.

This sequential recovery was supported by the strength and relevance of the brands targeted commercial initiatives and the continued focus on delivering compelling value and customer experiences across the portfolio. While this improving trends reinforces the confidence in the resilience of the business, we believe it is prudent to reflect the current demand environment in the outlook.

As a result, we have revised the 2026 guidance to a low single-digit growth for same-store sales, revenue and EBITDA. Importantly, the capital allocation framework remains unchanged we continue to expect approximately MXN 5.5 billion in CapEx between 180 and 220 store openings and leverage within the previously communicated range.

This reflects the continued confidence in the long-term attractiveness of the growth opportunities and the returns generated by the investment pipeline. More importantly, the guidance provision should not be interpreted as a change in the long-term thesis.

We continue to see a strong brand relevance, healthy consumer engagement and significant growth opportunities across the markets. These adjustments reflect a more cautious view of near-term demand, not a deterioration in the long-term fundamentals of the business.

Looking ahead, the focus remains on the variables within our control, protecting profitable traffic maintaining pricing discipline and strengthening the value proposition of the brands, leveraging our digital and loyalty capabilities and accelerating productivity and efficiency initiatives across the organization. We are not relying on a sharp recovery in the consumer demand rather where expectations are supported by disciplined execution, continued cost management efforts and the gradual improvement in trends we observed throughout the quarter.

Free cash flow generation remains one of the highest priorities, combined with disciplined capital allocation and a stronger balance sheet following the refinancing initiatives, we remain confident in the ability to generate solid free cash flow while continuing to invest behind the brands and long-term growth agenda.

Ultimately, we believe the combination of improving sequential trends, a portfolio of category-leading brands disciplined operational execution, a strong focus on cash generation and an unchanged long-term investment frameworks positions Alsea well to navigate the current environment and continue creating sustainable value for all the shareholders.

I will now pass you over to the operator for the Q&A session. Please, operator.

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[Operator Instructions] The first question is from Mr. Ben Theurer from Barclays. Please go ahead.

Just 2 very quick ones. So obviously, the quarter had a couple of softer spots. So as we look particularly at the performance in Mexico, and I was wondering if you could maybe elaborate a little bit more on like what might have been weaker versus your initial expectations? I mean, given the World Cup that came some of the touristic traffic that should have come into the different cities. .

Kind of like surprising to see a little bit more softness here in some of the categories. So maybe just a reconciliation of like what were expectations versus what was reality and where mismatch.

That would be my first question. And then second, could you elaborate a little bit more on France and the performance there most recently? I mean, obviously, Spain has continued to do very well, holding up the European markets, but just wondering about like the sequential trends in France where we sit right now. Those were my 2 quick ones.

Thank you, Ben. And thank you for your questions. So let me answer the second 1 first about France. As you are aware, since last year, we launched a recovery plan for the market in order to shift the trends that we were seeing. This year, we have clearly seen an improvement on the trend in terms of traffic with the last 3 months showing positive traffic versus last year.

Basically, the planning is based on -- it's a very 360 plan. One, the biggest portion is focused on brand equity. And the second 1 is focus on the conditions of our stores, elevating the conditions of our stores. And the third one is on a commercial platform where we are bringing the brand closer to different events around music, around entertainment, around experience.

So we believe that has been why we have seen this shift in terms of performance. Talking about France, you didn't ask the question also about regarding the Netherlands and Belgium, we are seeing double-digit growth since the beginning of the year in terms of sales.

So that is also encouraging for us as we are seeing the strategy moving forward. Regarding traffic in Q2 and expectations. It's true that what we expected was that Chili's and Domino's Pizza had a very strong and very well benefit by the World Cup.

And for the rest of the brands, I'm talking specifically about Mexico, we're performing pretty -- the FSR brands were performing pretty in line with what we expected. Nevertheless, we clearly saw a reduction of traffic that impacted brands like Starbucks, particularly in airports and these types of locations.

Regarding the cities like Monterrey, Guadalajara and Mexico part of the impact that we have is the reduction of movement. There was an promotion, I would say, of home office particularly during the important games, obviously, the 13 games that we saw in Mexico plus the important gates across the World Cup. I would say those are the effects that we saw.

Fortunately, we have seen also that as we move into the month of July, we've seen with the besides last weekend with A2, the final game and the third and fourth place games, we clearly saw a shift on the trend in general in all of our brands.

Our next question is from Mr. Alejandro Fuchs from Itau BBA. Please go ahead.

Christian, Frederico, Gerardo. I have 2 quick ones, if I may. The first one in Mexico. I was wondering, Christian, or Federico, if you could give us a little more context on what is the company doing in terms of maybe SG&A contention given that semester sales are coming a little bit, let's say, your expectations in the second quarter, even though improving. Is there a strategy maybe to contain a little bit of the expense front, that will be #1.

And then number 2 in terms of the guidance maybe for Federico. The guidance implies a stable margin, right, EBITDA pre-IFRS because low single-digit top line growth, low single-digit EBITDA growth. But the first half of the year, we saw EBITDA margin contraction already. So you would be expecting EBITDA margin expansion for the second half but you also said you don't expect demand to hugely increase going forward. So how can we put in balance those 2 things?

Alejandro. I will take both of the questions. I will start regarding the guidance. We are not assuming a sharp margin recovery in the second half regarding demand. Rather, we expect gradual stabilization supported by several factors. This was what happened during the quarter.

First, we are seeing a sequential improvement in demand trends as the quarter progressed, particularly after April. Second, we continue to benefit from lower dollar than nominated input costs, which support gross margin during the year. Third, we are executing a number of productivity and efficiency initiatives across the business, including labor optimization.

This means an increase in productivity, procurement savings and tighter G&A management. Importantly, the margin outlook does not depend on a significant acceleration in consumer demand. This is not going to change from one day to the other. The focus remains on improving traffic quality, maintaining pricing discipline and translating operational efficiencies into profitability.

I think we are on the way. And as a result, we believe margins should gradually stabilize in the sonar by execution. Initiatives in productivity and cost discipline, margin stabilization is not going to come from a consumer demand change on the short term.

That's the thesis that we have for the second part of this year. Regarding the SG&A, I know that you guys used to do some kind of arithmetics to analyze how is the SG&A. It is important to note that part of the year-over-year comparison that you are calculating is affecting by a more favorable base in the prior year.

In the second half of '25, we benefited from a one-off gain related to the sale of 10 stores to 1 of our franchisees in Domino's Pizza. This was a positive impact into the operating expenses. In addition, the preopening expenses last year were unusually low as year ago due to timing difference in the store opening schedule and developing pipeline. This does not mean that we are being more unproductive in terms of the SG&A.

It's just a delay of the opening plus a one-off in the second part of the -- in the second quarter of '25.

Our next question is from Mr. Luis Tesaro from Citi.

My first one is regarding the performance of Starbucks Mexico. So I wanted to have a better color on the outcome that you expect with the actions that you have been taking in the format such as the store modeling is in the store refurbishment program -- what should we expect from the performance of the stores after you fully deploy them?

Is there any sales uplift or marginal flip the target that you can share with us? And when should we expect to start seeing these benefits in the company's results? And my second 1 is regarding the new stores portfolio outside same-store sales. So if you could just give a little bit of a comment how did it contribute to the quarterly performance as well as if you can talk a little bit about the mature portfolio, the performance of the quarter.

Regarding the new source pipeline, Luis, as said before, we're not changing the thesis a quarter this year. The long-term thesis is pretty much the same. That's the reason that we are not changing the framework not only for 2025, both for the 2036 story, both for the next 5 years.

As you know, this year, we will be opening 220 stores in the different geographies in Mexico, 70% of that growth and Spain, 30% of that. And regarding the brands pretty much as saying 60% is Starbucks, 20% Domino's Pizza and 20% full service restaurant brands. The paybacks that we are seeing nowadays even with the deal reduction on the same-store sales, not only in the Starbucks but in the whole portfolio from the first quarter to the second quarter in Mexico, does not change distance the paybacks that we're seeing, especially in Starbucks.

When we are opening, we have paybacks from 2 to 3 years. Those are really good. And in the cash on lining is pretty much the same. Some of the questions will arise if we are going to change the breakdown from Starbucks to full service. That is not going to change like that.

We delayed to open a new store from Starbucks or from Domino's or the food service restaurant brands around 18 to 24 months. It is not easy to find this 1 of the sites and especially with the returns that we are seeing on a cash basis, we do not have a reason to change the long-term strategy of Alsea.

Luis and regarding Starbucks, we are focused on rebuilding traffic through both brand and operational initiatives. Yesterday, for example, we launched our [ Huntemonosmass ] campaign, so let's get together campaign, which is our new brand platform that reinforces the Starbucks role as the third place, a space that brings together people beyond home and work.

At the same time, we are rolling out a new POS platform that will improve speed of service, operational efficiency and customer experience. Plus 1 as you mentioned about the remodelings we have committed to 85 remodelings and 60 plus -- more than 60 openings in Mexico this year. By the end, we expect to finish the remodeling by the end of September, beginning of October.

So we don't impact the higher sales period. And in the case of openings, we should be delivering the 60-plus openings by the end of December. The effect, we will start looking at the effect of the remodelings as we go through the years.

As I have mentioned before, in Starbucks, the impact of remodeling in terms of sales goes from 3.5% to 7% on same-store sales, depending on the extent of the remodeling if we are able to add a teras or a mezzanine or improve the distribution of the store, depending on how the customer uses the stores, which we already know -- that -- those are the improvements in traffic that you could see.

So we will see this across the year on the stores -- as we remodel and this is an ongoing process as we are going to continue with the same strategy following 2026 where we're going to continue allocating an important part of the CapEx on the brand to remodel in remodeling and uplifting stores to elevate the customer experience.

Our next question is from Ms. Isabella Lamas from UBS. Please go ahead.

Christian, Frederico, Gerardo. If I could ask you from our side here, starting by the same-store sales trends by month, you've mentioned that there was a gradual progress with June, much better to May better than April. But I was kind of wondering if you could give a bit more color on how are things progressing since June.

So how do you see July up to the point across geographies, especially in Mexico, if you could give a bit more detail on that. And overall, if you think you could expect some recovery in progress across the third quarter. That's my first point.

And the second one, if I could ask about Starbucks, specifically in Mexico. If you could provide a bit more detail in, what do you think could be the reasons for the softness we saw in the quarter? And if you expect a recovery path, maybe could we see some positive levels going to the next quarter. And that will be it.

Thank you, Isabella. I will take both questions. Regarding Starbucks in Mexico, how we view the second quarter is a combination of different factors.

The first one is a softer demand due to the macroeconomic environment we are seeing. As I mentioned before, lower airport which represent an important number of our stores. Movement restrictions during the World Cup, particularly in Mexico City, Guadalajara and Monterrey.

And during this period, the promotion of home office in these particular cities, which are our largest cities. Nevertheless, we continue with our middle long-term strategy of the brand, as I mentioned just before, prioritizing remodelings, store uplifts and new store openings in order to make sure we continue elevating the customer experience, but at the same time, how do we bring the brand closer to more customers.

So having said that, this is what we've seen during the quarter. We have also seen a gradual recovery as the month of July started and when we see the gains spread out more, and we've seen clearly activity going back to normal, and we have seen clearly this in a positive way, particularly to your question about Starbucks. How do we see -- and I believe that the question is going to be a little bit repetitive to what I just said about what are we going to do with Starbucks moving forward. This Huntemonous mass campaign, which was launched yesterday, is really a focus on the third place and Starbucks values and what makes Starbucks what it is. At the same time, this rolling of the new POS platform in Mexico, which was something that we were working for several months to begin the launch has started already.

We did a pilot in some of our stores, and we have clearly seen the benefit when you -- with a better performing platform, which help us with speed of service when you put all together, in a transaction. At the same time, we continue working on innovation, being a Starbucks innovation in beverage, 1 of the key factors that we see continues moving the needle.

We have some think some new beverages coming as we move on during this quarter. And then by the end of the quarter with the return of the classic drinks like Pumpkin spiced latte, and in Christmas campaign with the classics like Toffeenut Latte. Some innovation around merge and food -- so we believe that we should be -- we are already seeing in July a recovery, and we are confident by the end of the quarter, we should be much better than what we delivering Starbucks in the month of -- in the Q -- in the second quarter.

Complementing the first question regarding the same-store sales evolution Isabella. The key point is that April was clearly the lowest point of the quarter. We have seen sequential improvement in May and June, both for Alsea and all of the brands. And we continue to see that positive trend in July.

In fact, the current same-store sales trends, I am watching that right now are tracking closer to what we have seen in the first quarter than to the levels we experienced in April. We also expect that the end of the workout period will provide a more normalized backdrop for the demand. But as I said before, the haircut on the guidance is not taking into account a huge recovery in the demand.

And Isabella, if I may add a couple of things for Starbucks Mexico, we faced in the second quarter a tough comp in the initial remarks from Christian. We mentioned the Pinots campaign that we didn't have, let's say, these 2026. So that was something that affected the quarter, particularly again in April, which was the softest month. And as Fed and Christian was saying, we were trending positive in May and June. We also had the cherry blossom campaign last year, which again, didn't have this week. And we've been keeping saying to the market that we were trying to get let's say, or not related too much into the merged campaigns, which brings yet traffic, but usually our kind of lower margin initiatives.

So that's something that we've been, again, doing on purpose trying to benefit our profitability.

If you allow me, could I do a quick follow-up? How do you see the market share trends for Starbucks in Mexico? See the market growing? If you could comment about that quickly.

Yes. As I mentioned before, we continue with our strategy. I mean, this is a long-term strategy. Not 1 quarter. And as mentioned by Gerardo, Frederico and myself, there were some particular factors compare versus last year. Some of the FX -- negative effects in the brand coming from the World Cup. So this is -- this doesn't change the strategy. We continue on our path to deliver the 60-plus openings that we planned for this year. We continue penetrating the brand. There is still white space to continue developing the brand in the country. with existing formats like drive-through, core stores and different formats.

So we are confident that we -- with that strategy and with the returns every time we open a new store that are being delivered. So no, we don't have any particular concern on that regard.

Our next question is from Mr. Thiago Bortoluci from Goldman Sachs. Please go ahead.

Christian Federico, Gerardo. I have the previous conversations -- to begin this again on Starbucks Mexico, right? I understand that most of the manner to macro World Cup things that are outside what the company can control, but it's also that more recently announced a few management changes and those are like 2 months after your Investor Day, right? So the first question is, what are the kind of capabilities that you identified that you need today in Starbucks that weren't there like 2 months ago when we discussed the strategic plan. This is the first question.

Yes, I think we lost Thiago, let's see if we can bring him back.

Our next question is from Ms. Melissa Byun from Bank of America.

I wanted first to ask if you could comment on the impact of the World Cup in Spain and the trajectory of sales along the quarter and expectations going into the second half? And then on South America, I wanted to better understand the drivers of the gross margin contraction whether higher fuel prices are having an impact either on your cost of goods or on other distribution expenses?

And when you expect to see some of the savings from consolidating the back office with Mexico?

Melisa, regarding Spain and the World Cup, the brand that clearly was positively impacted by the World Cup was Domino's Pizza. In the -- regarding the other brands, due to the time of the games and the times that the games were scheduled, we really didn't see either a positive or negative impact our full-service brands or in the case of Starbucks. Actually, Starbucks continue with a solid performance as well as our other brands like Foster, Fosters Hollywood and IPs continue performing solid.

So really the branded was positively impacted was Domino's, but not -- besides that, there was no important or positive impact or negative or positive impact pretty much the market remains stable.

Okay. And the trend in sales along the month -- I'm sorry, by month along the quarter and going into the second half?

So far, we are back as we ended Q1 with similar trends. Summer started pretty strong in Europe, which is also encouraging. Regarding South America loss of margin, Melissa. The primary driver was a loss of operating leverage resulting from weaker reported sales against what we were expecting, particularly in Argentina and Chile, Colombia had a great trading, especially with Domino's during the second quarter.

And while underlying demand trends were mixed, these markets, Argentina reported sales in Mexico and pesos negatively affected by the currency translation. This is not only presence in South America, both in Europe too, if you look at the figures of Europe in local currency, it's an improving in all the different lines from top line to EBITDA to profitability, but well, it was a currency translation.

And regarding the consolidation of the synergies, not only for the back office both increase in productivity. A lot of them will be set in place during the second half of this year or for the fourth quarter and the remaining part for the first half of 2027.

Thank you very much for your question. We will now return to Mr. Thiago Bortoluci from Goldman Sachs. Please go ahead.

Can you hear me now? .

Yes, we can.

Could I go back to the first question. Very much for having me. I'd like to follow up in 2 themes that we already discussed here. The first one being Starbucks Mexico, right? And I think this one is for accretion. You mentioned, Christian, and we all understand well, that most of the sources of pressure in the quarter were related to the World Cup traffic work from home all the stuff. But it's also true that within the company and the controllables, you have publicly announced a few high-level changes in our management team. and this is coming like 2 months after your Investor Day, right?

So I'm wondering what are the kind of capabilities that you think the banner needs now that weren't that clear or we weren't necessarily there when we work together in New York in March. And then I might have another one.

Yes, Thiago. Thank you for the question. Well, as you know, we have moved in this vertical integration of our brands and the transition of leadership was mainly due to the evolution of this vertical integration and the focus that we had at this moment on the development of the strategy of the brand.

It's about I would say, focusing on this brand evolution in terms of the elevation of the customer experience, the remodeling of our stores disciplined approach to the CapEx allocation and the opening of new stores.

As I mentioned before, the right geographies, the right -- in the right locations and taking the opportunity of the different formats that we can use with Starbucks. So clearly, it response to these specific needs. I believe the moment is different, the needs are different, and that's why we made this call and that's it. There is no more additional comments regarding that question.

That's good, Chris. I think second 1 is for Fed regarding the guidance again, right? You commented that the same-store sales, sales and EBITDA growth targets imply broadly flattish margins, right? But again, we are seeing better effects versus last year and better effects versus what you had initially budget, right? So help us understanding why the FX part of the equation is not necessarily flowing to margins.

The updated guidance does imply that we need to see a better performance in the second half compared to what we have seen in the second quarter. But as I said before, to Melissa, we believe that this is achievable because of the sequential improvement. There are a few reasons behind this confidence. First, the comparisons, if you remember the third quarter of the 2025 are easier, particularly after the software base that we phase last year, not only in Mexico but in other regions.

Second, we saw sequential improvement through the quarter, with May better than April and June better than May. And hopefully, let's see what's happened with the second half of July will reach the same trend that we saw during the first quarter. And sorry, you wanted to highlight regarding the FX input gains.

What was impact on Mexico growth. [indiscernible] our gross margin. .

Yes, because we have some operating leverage. And obviously, the mix is impacting the total consolidated tears. You have to take into account that year-over-year, we're changing the mix. Obviously, there's a growth between Starbucks and in Domino's and the full service restaurant and maybe in the gross margin that would affect even while in the bottom part of the store EBITDA level, you will see again.

But it's worth the operating leverage from Starbucks mainly in the second quarter. But we are having around 50 basis points of of gain because of the better FX in terms of the 35% of the cost of food line.

If I may add Thiago to further answer -- we do still have a little bit of pressure similar to first Q related to the inefficiencies of the distribution center.

As we mentioned, again these are, I would say, much lower than what we saw in Q1. But there was, I would say, an impact, I would say, around 20 basis points at the gross margin level. And we did, again, I would say, the exercise and analysis on the mix which also was mentioned in Q1.

That also, I would say, affected the second quarter by around 20, 30 basis points. So I would say what Peter was mentioning around the benefit of FX, which was actually around 50 basis points, it was actually, I would say, compensated by these 2 other effects that I would say, as we go through the year, those will get even kind of lower potentially in Q3 and then in Q4.

So that was also impacting, let's say, gross margin, and then that flows I would say, through the EBITDA

No, that's clear. If I may just to round it up here, are you sticking to your free cash flow business?

Well, we are still -- as you have seen, we have improved to MXN 2.8 billion year-over-year, and I want to highlight that. This is part of the discipline that we need to prove to all the different shareholders and to the market. We are expecting to have the same net debt to EBITDA, what we preserved with the openings and the total CapEx of MXN 5.5 billion. Yes, the answer is yes.

Our next question is from Mr. Alvaro Garcia from BTG Pactual. Please go ahead.

Can you hear me? My question is on VIPs in Mexico. We've now lived through sort of a multiyear effort on the value front, [indiscernible] clearly working, seemingly very positive traffic evolution. Having said that, we really haven't heard from you on what I guess my question is, to what degree do you have conviction that you can grow stores in VIPs Mexico down the line given this newfound sort of value platform?

Obviously, we see other successful cases around the world of casual dining Brad is doing very well. I'm curious of your thoughts on which Mexico selling and your growth.

Thank you, Alvaro. Not only bps, we have [indiscernible] and the rest of the full-service brands are performing in line or above expectations. Again, expansion decisions remain ROI driven and disciplined by site availability. During 2006, we will have around 30 new full-service restaurant openings, including all brands between Spain and Mexico.

So we continue -- I believe part of the success of bps to your point is that we have a very disciplined approach in where to open, we're not to open the right pace and the right rhythm. So we -- just next year, we are talking about 19 remodelings in and around 15 openings between Spain and Mexico. So continuous performing and delivering a very solid performance. but part of the recipes because we have this disciplined approach to the development of the brand in both geographies.

Great. And then a follow-up for Fede on interest expense. You guided for sort of roughly $25 million worth of benefits into 2026. There was a one-off in the first quarter. We do see an improvement year-over-year on the banking and derivative instrument fees line. So I was wondering if that's where the savings are coming from. .

But if we look at the Borsetfiling, it's not clear for actually seeing the interest expected savings. Are we seeing them on the P&L? If you could just walk us through that, that would be very helpful.

It's more related with allocation into the P&L, Alvaro. That's a very important point. And I want to highlight this during the prior year, the financing cost, remember that we held this U.S. dollar bond into our balance sheet. It has a cold spread associated with the U.S. dollar bond derivative instrument.

That is not longer in place in 2026 and with the elimination of that instrument, this has been one of the main drivers of the improvement in the financing profile of this year. In fact, if you go to the first 6 months, free cash flow of this year, the absence of this call is spread into the interest expense line generate approximately in the 61st months, MXN 478 million of savings versus the prior year, maybe into the P&L.

It is not that clear because of the allocation between interest expense and derivative instrument, where is the saving both. We do not have derivative anymore into our balance sheet. And that is where you can see the saving of more than $25 million that we will have during this 2026 bond.

If you go to the free cash flow, as you can see in the press release that we have that saving. And that is part of the what we want to highlight regarding free cash flow, MXN 2.8 billion more than in the first 6 months of 2025.

Awesome Yes. I'll let someone else ask about working capital.

Our next question is from Mr. Froy Mendez from JPMorgan. Please go ahead.

Trying just to wrap up on the guidance. I'm sorry to be repetitive here. You already established that probably what needs to happen in Mexico for guidance to be achieved is for Starbucks to recover. Probably that brings better mix to the margins.

But how about the rest of the regions? Can you clearly inform us a little bit more on what needs to happen in the third and fourth quarter for each region to land within your updated guidance, same-store sales and EBITDA?

Thank you, Froy. As I said before, it is not -- we are not expecting on sharp change on the part of the demand consumption -- we have revised the outlook. We are reflecting the weaker consumption environment. in Mexico, but not only for Seres, both for all the different brands as well as the impact of FX translation on reported results, let's take into account that when we announced the guidance more than 3 months ago, we used an FX of MXN 20.9 per dollar. It was around MXN 22 per euro.

And nowadays, we have more than 2 of difference with the dollar and with the euro with the Euro 2. So that part of the impact on FX translation is consolidated into the new guidance. At the same time, this guidance does not require an extraordinary recovery scenario or in the part of the consumption, not only for Starbucks, but for the rest of the brands.

What we are assuming is a graduation from the lowest point of same-store sales that we experienced in April, combined with Easter comparisons in the third quarter, a continued gross margin support because of the improvements in the Guadalajara distribution center, lower dollar-denominated input costs like the coffee that where we're having savings for the fourth quarter and ongoing productivity initiatives and disciplined SG&A like the efficiencies that we are setting into the back office, and I have just explained for to Melissa. It is not coming only from a same-store sales improvement. It is in all the P&L.

And Fede, where do you feel the largest upside or downside risk to the guidance? If you can tell us like maybe upside is Starbucks Mexico, upside is input cost, downside Argentina. Can you -- let us not worth of we're more comfortable .

Let's see -- let's talk around South America. South America is less than 4% of the total EBITDA when you see a yearly basis. So even while we are worried and working hard on a daily basis, that is not 1 of the main points. This is 70% Mexico, 25% Europe.

Europe is performing really well with the exception of the translation to pesos bore we're comfortable with the margin expansion when you look at the EBITDA margins and the cash flow generation but I would say that the major risk is coming from the consumption environment in Mexico, not only for Starbucks again, both for the rest of the brands.

As I said before, we are coming back to the trends that we've seen by the end of the first quarter, but we have only taken 15 days of the month of July. Let's see what is happening because -- at the beginning of the year, we were expecting a huge handover, especially after the World Cup. We did not see the party, but let's see if we are seeing that this come over. Hopefully, not but that's the major risk.

Excellent. Thank you so much, gentlemen. .

I would say, just to clarify on the exchange rate. we were using MXN 19.3 per dollar in our guidance in the original guidance and around EUR 227 per peso also in our original guidance for.

And let me add on the commercial side, how -- what do we plan to do to get the second half of the year moving forward. We have clearly seen that the consumer environment is -- has decelerated. And as Frederico was mentioning maybe some of the hangover after the World Cup. Nevertheless, we're seeing a July that after the games are done, things are going back to normal.

But to give you some specific highlights in the QSR segment, we are leveraging proven traffic drivers, such as Domino's Mania, which actually started yesterday and also supported by product innovation and targeted value initiatives that are -- we know that this is what the consumer is looking forward right now.

And but always with the right level of profitability. In the case of full service, we are expanding affordability and group dining occasions. This is an important part of the strategy around family and group dining through menu innovation, including, for example, in Chile, our new smokehouse platform, which -- and in the case of Foster's Hollywood, what we call the barbecue platform and which is based on family style offerings.

Designed to deliver compelling value without compromising guest experience. And in the case of WIP, we continue to develop the menu with balanced relevant meal options that respond to changing consumer preferences whilst maintaining a very high strong value perception. And I don't want to be repetitive with Starbucks, but clearly is this campaign of [ contaminous mass, ] which enhances this third place and how to bring together people beyond home and office, the launch of our POS system in Mexico, which should improve speed of service and customer and operations experience.

And the different initiatives regarding beverage innovation and bringing the Classics as we do every year. So with all that said, we feel that we have the initiatives and the right focus where the customer wants -- what the customer wants.

Our next question is from Mr. Antonio Hernandez from Actinver. Please

Actually, 2 very quick ones. The first 1 regarding Starbucks. I mean you already mentioned some divestments such as Arc and maybe some going in. But I was thinking about portfolio optimization. If you're considering given I mean I know your long-term plans haven't changed, but if you're considering maybe some relocation of some Starbucks units. .

That would be my first question. And the second one would be regarding no food inflation that you mentioned in the side if you're still within that line?

As we mentioned during the quarter, Antonio, we completed the divestment of Arch's in Colombia. This reflects, obviously, the portfolio optimization that you are mentioning concentrating the resources and management attention on the brands and markets where we see the greatest growth opportunity.

With this transaction, we have completed this phase of the portfolio optimization strategy for the moment. But beyond that, as you know, we are continuing to evaluate the potential divestment of some other brands within their portfolio.

We are not in a position today to confirm or comment any specific brand but these are ongoing strategic reviews. And as a policy, we don't discuss these transactions or brands to be divest until something definitive to be announced.

And I understood Antonio, you also asked about Starbucks portfolio optimization, am I right. Regarding that question, this is a live process, ongoing live process as we continue growing and penetrating the brand across the different geographies, there's always opportunity to split some stores to relocate some stores, so this is a very light process.

It has been always part of our strategy not only within Starbucks, but other brands. It's more complicated with FSR, but clearly, with Domino's Pizza and Starbucks, it's an ongoing live process, and it's always part of what we do. every single day, every single year.

And the follow-up regarding internal inflation, you mentioned no food inflation in the LA -- is this expected for the year? Is this still expected?

Yes, it's going to be negative inflation for the 3 markets. So those are good news to support the increase in margins into the gross margin and to launch promotional campaigns with a lot of sense, not only for the customer but also as yes.

Thank you very much for your question. That was the last question. I will now hand over to Mr. Christian Dubernard for final comments.

Thank you. Before we conclude, we would like to thank you for your participation and interest in our quarterly conference call. If you have any additional questions or require further information and where investor relations team is always there to assist you. Thank you, everyone, and see you in the call of Q3. Thank you very much.

Alsea would like to thank you for participating in today's video conference. You may now disconnect.

Good morning, everyone, and welcome to Alsea's First Quarter 2026 Earnings Video Conference. My name is Gerardo Lozoya, Head of Investor Relations and Corporate Affairs. Today, you will hear from our Chief Executive Officer, Christian Gurria; and Federico Rodriguez, our Chief Financial Officer.

Before we continue, a friendly reminder that some of our comments today will contain forward-looking statements based on our current view of our business and that future results may differ materially from these statements. Today's call should be considered in conjunction with disclaimers in our earnings release and our most recent Bolsa Mexicana de Valores report.

The company is not obliged to update or revise any such forward-looking statements. Please note that unless specified otherwise, the earnings numbers referred to are based on pre-IFRS 16 standards. I will now hand it over to Christian for his initial remarks. Please go ahead, Christian.

Thank you, Gerardo, Federico. Good morning, and thank you all for joining us in Alsea's First Quarter 2026 Earnings Video Conference. I will begin with an overview of our performance for the first quarter, highlighting key operating trends across regions and brands as well as our progress in digital expansion and ESG initiatives.

Federico, our CFO, will then walk you through our financial results in more detail. Before going into quarterly figures, I would like to briefly step back and reflect on how we started the year. As we shared during our Alsea Day in March, our focus remains on taking care of what matters most, our people, our customers and our resources. This means building the right portfolio, driving traffic through innovation and best-in-class service and improving profitability. The first quarter reflects a consistent execution of this approach.

Coming out of 2025, where we made deliberate decisions around portfolio focus, capital allocation and operational discipline, our priority has been to maintain that trajectory while navigating a challenging environment. In this context, we saw a continuation of the trends we highlighted in the fourth quarter.

The quarter started strong, particularly in January and February with solid traffic and stable demand across markets, followed by some moderation towards March as a result of the incidents, particularly in Guadalajara and states around. Despite softer consumption trends, ongoing cost pressures and limited pricing flexibility across the industry, we maintained robust operating performance, supported by the strength of our brands, our scale and our execution.

With that context, let me now turn to our first quarter performance. In the first quarter, we reported a 1.4% year-over-year increase in total sales, reaching MXN 20.1 billion or a 5.8% increase. Excluding foreign exchange effects, same-store sales grew by 4.1%. EBITDA increased 1.8% in the first quarter, reaching MXN 2.4 billion with a margin of 11.8%, increasing by 10 basis points year-over-year.

Regarding brand performance in the first quarter, Starbucks Alsea same-store sales increased by 3.5%. For Starbucks Mexico, same-store sales grew by 2.1%, supported by a strong start of the year and a stable demand, which was partially compensated by our high-demand commercial collaborations of Peanuts in 2025 and the negative impact from our Jalisco and other states events at the end of February.

For Starbucks Europe, same-store sales increased by 1.3%, with solid performance in Spain, while France remains challenged, also showing a gradual improvement. Finally, in South America, same-store sales rose 12.1%, driven primarily by Argentina. Excluding Argentina, same-store sales increased 5.5%, supported by strong performance in Colombia and an important recovery in Chile.

Domino's Pizza Asea posted a 5.3% increase in same-store sales, reflecting continued growth supported by the expansion of our delivery capabilities. In Spain, same-store sales increased by 5.1%, reflecting effective commercial execution, such as the launch of the Madrisima Pizza, which is made of sourdough, extra virgin olive oil and a slow double fermentation process. This is another example of how innovation is driving profitable traffic.

In Colombia, Domino's same-store sales increased 8.7% with continued strong momentum with a better-than-expected Domino's Mania value campaign.

Burger King Alsea same-store sales, excluding Argentina, increased by 0.7%. In Mexico, Burger King recorded an increase in same-store sales of 3.0%, showing early signs of recovery.

In Chile, same-store sales decreased 2.3%, reflecting softer trends during the quarter. The full-service restaurant segment delivered 4.3% same-store sales growth, remaining one of the most consistent performers during the quarter.

Full-service restaurants in Mexico increased by 4.9%, supported by higher order volumes and a strong value proposition across brands. I want to highlight Vips performance who grew 7.2%, driven by traffic generation from consistent execution of our value platform, Menuelvia.

Same-store sales for full-service restaurants in Spain grew 3.5%, reflecting solid performance across most brands with Foster's Hollywoods standing out, posting same-store sales growth of 7.5%.

Our expansion strategy continues to be guided by clear focus on quality, returns and capital efficiency. During the first quarter, we opened 32 new stores, 20 corporate units and 12 franchises. As in previous quarters, we remain focused on prioritizing high-return locations and formats while maintaining a disciplined approach to capital allocation.

As we highlighted in our most recent Alsea Day, remodeling continues to be a key priority across regions as store remodeling delivers attractive returns to improve customer experience, higher productivity and faster payback periods.

In addition, as previously announced, we are moving forward with our plans to introduce our new brands, Chipotle and Racing Cane's with the first store openings expected in the second half of 2026.

Our digital platforms continue to be key drivers of growth. By the end of the quarter, loyalty sales increased 12%, reaching MXN 5.5 billion, representing 26.4 million orders and contributing to 28.8% of total sales.

By the end of the quarter, loyalty sales increased 12%, reaching MXN 5.5 billion, representing 26.4 million orders and contributing 28.8% of total sales. We also surpassed 84 million active customers, which are around 200,000 more versus the fourth quarter across our loyalty programs, confirming the strength of our digital engagement and our loyalty base.

Additionally, we served nearly 35.7 million digital orders in the quarter, representing MXN 7.8 billion, which accounts for 41.2% of our total sales. During the quarter, we continued advancing our ESG as a agenda as a core pillar of our long-term strategy.

Fundacion Alsea achieved a record fundraising campaign through Movimiento Va Por Mi Cuenta, raising more than MXN 62 million and surpassing the previous year. These resources will support more than 40 million people in vulnerable communities during 2026 through programs focused on food security and in collaboration with multiple partners organizations.

Across our operations, we continue to strengthen our environmental and social impact in Europe. Domino's advancing its transition towards a low-emission delivery fleet, while we continued our food donation programs contributing to waste reductions and community support.

In South America, we supported communities affected by wildfires in Chile through food donations and fundraising initiatives, while our teams across the region continue contributing in local volunteering programs. These efforts continue to reinforce ESG as an integral part of how we operate. Let me now turn it over to Federico, our CFO, who will provide further insight into our financial performance. Thank you.

Thank you, Christian, and thank you, and good morning, everyone. The sales increased by 1.4% in the first quarter, supported by effective commercial strategies and solid performance in Mexico, Spain and Colombia. Excluding foreign exchange effects, the sales increased 5.8%. During the quarter, disruptions in Jalisco and surrounding states resulted in a negative one-off impact of approximately MXN 60 million in revenues.

In the first quarter, sales in Mexico were up 4.9% to MXN 11.2 billion. In Europe, sales increased by 1.5% to MXN 6 billion, while in euro terms, sales increased by 6.3%. Finally, South America sales fell 10.7% to MXN 2.9 billion, mainly due to currency effects.

During the quarter, the gross margin was adversely affected by segment and geographic mix as higher cost businesses represented a larger share of sales, while Europe contributes less to consolidated cost of goods. Furthermore, as expected, the kickoff of the operations of the Guadalajara manufacturing and distribution center is on a stabilization stage. These impacts were partly offset by a favorable foreign exchange effect.

EBITDA increased by 1.8% with a margin expansion of 10 basis points, mainly due to disciplined execution and operating efficiencies across regions. By region. In Mexico, the adjusted EBITDA increased 5.8% with margin expansion of 20 basis points, supported by favorable cost dynamics, partially offset by higher labor expenses. In Europe, the EBITDA increased by 4.2% year-over-year with a margin expansion of 30 basis points, primarily due to same-store sales growth and operating leverage.

In South America, the adjusted EBITDA decreased by 14.3% with a margin contraction of 50 basis points, primarily impacted by currency effects and some pressure on labor cost. The same as in the revenue line during the quarter, disruptions in Jalisco and surrounding states resulted in a negative one-off impact of approximately MXN 25 million. It took from 3 to 6 weeks to recover the lost traffic. The net income for the first quarter decreased by 65.7% year-over-year, reaching MXN 115 million, reflecting the one-off impact from the early settlement of the debt refinancing, including derivative instruments related to the U.S. dollar bond of approximately MXN 250 million. Additionally, in 2025, we had a positive noncash FX gain driven by the strong Mexican peso. First quarter free cash flow improved year-over-year, mainly reflecting improved working capital management.

The CapEx for the 3 months of the year totaled MXN 876 million. Out of this total, 81% was allocated to store development initiatives, including the opening of 20 new corporate units, the renovation and remodeling of existing locations and equipment replacements across the brands. The remaining 20% was directed at strategic projects primarily focused on technology, process improvements and software investments.

By the end of the first quarter, the pre-IFRS 16 gross debt increased by MXN 666 million year-over-year, reaching MXN 35 billion. The company's net debt, not accounting the impact of IFRS 16 was MXN 29.7 billion, which is MXN 507 billion less than it was at the same time last year. This increase in gross debt reflects funding requirements related to CapEx and working capital during the quarter.

Consolidated net debt reached MXN 46.4 billion, including lease liabilities. At the end of the quarter, 88% of the debt was long term with 68% denominated in Mexican pesos and 32% in euros. We remain focused on maintaining a healthy capital structure supported by prudent financial management. At the end of the quarter, the cash position stood at MXN 5.2 billion.

Turning to the financial ratios. The total debt to post-IFRS 16 EBITDA ratio closed the quarter at 2.9x, while the net debt-to-EBITDA ratio stood at 2.5x. I will now pass you over to the operator for the Q&A session. Please, operator.

[Operator Instructions] The first question is from Ms. Renata Cabral from Citi.

So I have two, if you allow me. The first one related to the recovery in Europe. So my question is how are you seeing this evolving along the year? And my second question is about the digital capabilities because we saw that the company is generating around 40% from digital capabilities, which is a huge change compared to 5 years ago. So what is the path that you are considering in the digital, I mean, in terms of further efficiencies and at the same time, not be so much dependable on the aggregators?

Let me start by answering the second question. In terms of digital capabilities, as you clearly expressed, we continue growing on this particular channel. In the case of Domino's Pizza in Mexico, the growth comes directly with the implementation of full service with our aggregator -- with one of our aggregators in last year. So we are seeing clearly the benefit of having made this decision in the numbers of orders and how it's positively impacting our business. That's in terms of this particular channel.

Also linked -- this is also linked to our loyalty platforms. We continue expanding our loyalty base, particularly with Starbucks Rewards across our different geographies where the program has been launched. And also with Club By in Europe, which we have a very stable platform, which represents almost 38% of our transactions, our traffic. And to sustain this, we are also launching this Club By loyalty platform for our full service restaurants in Mexico, which has -- we have the know-how, we have the technology, and we're in the process of implementing by the fourth quarter of this year as well as improving the capabilities in our different apps. So this continues to be a clear channel that the customer is recognizing and that's why we are reacting in this way.

In the case of the recovery in Europe, we see a very stable performance in Spain. Clearly, in all of our brands, Starbucks with very positive trends in Spain as well as our full-service restaurant brands which clearly driven -- this has been clearly driven by innovation and our value proposition, which are -- I can give you the example.

We launched Madrisima, as I mentioned before, which is as we come from the launch of Crasan, which had extraordinary results. We export this to Mexico, import this to Mexico also with extraordinary results. And now with this innovation of the sourdough pizza, we are clearly seeing the customer recognizing this.

Talking about France, we see a more flat and slight recovery, but we expect -- we continue -- this year, we're going to invest an important amount of resources to drive and to change and shift this trend. But we expect this to continue being slow but steady recovery.

Our next question is from Mr. Froylan Mendez from JPMorgan.

How would you rate the Starbucks Mexico performance in the quarter same-store sales of 2.1% was well below the other banners. Do you see any specific source of acceleration for Starbucks on the remainder of the year? And a second question, if I may, how do you see gross margin evolving in your key regions given FX volatility, input cost dynamics and labor pressures? Two questions from my side.

Regarding the gross margin, let me explain a little bit of the gross margin in the first quarter. We had a positive impact of around 60 basis points by the FX. Obviously, remember that from a sensitivity analysis, each peso has a mix of around 30 basis points into the gross margin. So we have around MXN 2 year-over-year. That means 60 basis points. And this was fully offset by the mix of the business, and that is the natural run of the business and around 20 basis points with the startup of operations in Guadalajara.

We expect to have something similar in the remaining part of the year. Obviously, we will recover it maybe in the second half of the year, the start-up of operations, and you will see a slight expansion, but it is positive. And as you can see, we're still expanding the EBITDA margins on a [ 4-wall ] level.

And let me complement Federico's answer, Froylan, and then go back to your first question. Part of this margin strategy is we are optimizing our value platforms to protect margins while using innovation to sustain perceived value and keep customers engaged. That has been key in the evolution of our value platforms, make sure we find the right margins, but at the same time, through innovation, keeping the customers engaged. In the case of Starbucks Mexico, we continue our journey, as I said, to bring our existing store portfolio to the right level of -- the conditions of our stores to the right level.

We continue remodeling stores and putting stores with -- at the right level of operation. And we are happy to see what we -- as mentioned by Federico, we have a strong January, strong February. Unfortunately, with the Guadalajara events at the end of the February, we had an important impact, particularly with the footprint we have with Starbucks across all these states and Guadalajara being one of our key markets. Clearly, it took us like depending on the states and the cities in some cities, 2 weeks after we were in the right track.

And then after -- and some states took us like until the first 2 weeks of April to come back to our previous prior to these events. So fortunately, we are back there. Also, it's important to mention that different innovation in drinks, particularly protein, the launch of the protein drinks campaign is driving very important, and it was an expected campaign. It's driving really positive traffic.

And likewise, we are with this platform coming soon about [ The Devil Wears Prada 2 ], which is really driving a lot of excitement across our customers. So we're seeing this driving important traffic across -- particularly in Mexico.

Our next question is from Mr. Alejandro Fuchs from Itau BBA.

Congratulations on the results. I have a very quick one in Europe. I wanted to see maybe a little bit what do you expect for the rest of the year, right? We have many moving parts with probably commodity prices going up and maybe we could have some pressure on the consumer there, but results were quite good.

Alejandro, we are really cautious around inflation and the energy because we believe that in 2021. By today, we have not seen any kind of pressure in the CPI for the Alsea index, and we are still trying to close all the positions for the relevant commodities. I'm talking around coffee, cheese, et cetera. But as of today, we are not seeing any kind of pressure, not only in the cost of food but in the electricity prices. Remember that in 2021, we had around EUR 8 million of pressure. But so far, so good, but we are taking a lot of precautions there.

I think, Alejandro, you are on mute. Alejandro, can you hear us? Let's go to the next question operator.

Our next question is from Ms. [ Venessa ] Melissa Byun from Bank of America.

I apologize. I'm having some trouble with the audio. So I don't know if you've already answered this. But I was going to ask if you could comment on the increase in admin expenses in Mexico during the quarter. We saw 4-wall margin expansion, but a contraction in full EBITDA margin. And I just wanted to understand if there is anything nonrecurring. And then also on the expense side, I wanted to ask for an update in terms of the integration process for the headquarters in Mexico and South America. Where are you in that process? Do you anticipate any onetime expenses? And when should we begin to see some of those benefits flow through?

Okay. Thank you very much, Melissa. Regarding the first question related with the expansion margin in the difference in the expansion margin in the EBITDA [ per wall ] and the total EBITDA of the company. Let's remember, that last year, we had a one-off positive noncash effect related with the releasing of the accrual of the long-term incentive of around MXN 150 million in the first quarter. When you normalize this effect in 2025, the EBITDA margin expansion in the first quarter of 2026 would be about 100 basis points. So this is more a comparison effect than something negative in the first quarter of 2026. Christian, do you want to comment?

Yes, I will answer the second question about the integration of Mexico and South America. We continue the process of consolidation. I can share with you that in terms of store development and expansion, we are pretty much done with the integration. Likewise, with supply chain and procurement, we have finalized the first stages of the integration. And we also continue executing different efficiencies around the divestment as we did the divestment of Chili's and P.F. Chang's in Chile. And also by the end of the month, starting the 1st of May, we will finish the process of divestment of our operations in Colombia of Archie's leaving this with -- continue with a strategy to optimize our portfolio and leading the region with the 3 brands with the South America region with Starbucks, Domino's Pizza and Burger King. So we continue on this consolidation.

We continue doing the different changes or shifts towards the reduced portfolio and the integration, as I mentioned, of the key -- certain key functions in the region. So the plan is going even a little bit faster than we expected, and we continue and think that by the end of the year, we will be fully integrated.

Complementing Christian's answer regarding the synergy around the headquarters in Mexico, Europe and South America, Melissa, we had a positive impact of around 50 basis points because of these synergies. We'll see these synergies during the next 3 quarters. And obviously, it was offset by the positive noncash effect that I already talk first.

Our next question is from Mr. Ben Theurer from Barclays.

I hope you can hear me I wanted to dig in a little bit in what's been happening within your working capital on the cash flow because obviously, as we look at the investments last year were quite significant in the first quarter. And I mean, it was still an investment, but it was like less than half than what it was last year. So maybe help us understand a little bit what were the drivers of the improvement on the working capital needs here on a year-over-year basis? And then I have a quick follow-up question on Europe.

Ben, I would say that we are working a lot. And remember at Alsea Day, we talk around the cash conversion from EBITDA. We pretend to have around 20% of the total EBITDA of the year into the treasury position by the end of 2026. And we are working in all the different legs. As you will see, we'll have a more rationalized CapEx of around MXN 840 million. And as said before, we are not running with the openings. We do not have any kind of pressure to have more openings while where we are really leveraging the businesses in the same-store sales.

And additionally, we are working with all the different suppliers to have a more rationalized working capital curve during the whole year. As you have seen, we were able to offset it around MXN 1 billion year-over-year in the working capital, and that's part of the commitment of the management with all the shareholders. So you will see this on the long term.

Okay. Perfect. And then real quick, coming back to Europe. I mean, we've seen that little improvement finally in France, but obviously, it's still, I would say, fragile. So I was just wondering, are there any initiatives you're currently working on? Or is there anything that's more like under your control as to address it and also then come back into what the commitments are with Starbucks in terms of growth and openings, et cetera, which I know has been a little bit more on the softer side, just given what the situation was?

Ben, yes, absolutely. We put together a plan in October, a very, I would say, strong plan in terms of capital or the resources we're going to invest there and also the strategy we're having there. I can tell you, I would like to summarize the plan in two.

First is every -- all the different commercial strategy around to turn around the market. with different initiatives in terms of the food program elevation, the different campaigns, very locally relevant campaigns, renovated beverage or innovative beverage portfolio, also supported with different licenses that I cannot disclose right now, but very expected and interesting licenses that have been proven successful in other geographies like Asia or even in Mexico. And on the other half is everything linked to brand equity and brand reputation, which the first part of the plan is to deliver short, middle-term results across the year. And the second is, let's say, a continuation of trying to bring back and build the reputation and the equity around the brand. That is what we are working on.

We understand that some of these initiatives are going to pay off during the second half of the year. And the other one in terms of reputation and brand equity will be to continue driving and positioning the brand across the market. That is also accompanied by certain leadership changes in the region, which we are optimistic that this will also drive and improve or accelerate the recovery in the market.

Our next question is from Mr. Ulises Argote from Santander.

Following up on Froy's earlier question, but just wanted to understand beyond the FX, we should also expect some improvement on the gross and EBITDA margins there coming from better raw materials. I know it's mixed on the different regions, and it's not a clear story, but just trying to get any additional color there. And basically trying to gauge if margin improvement should accelerate ahead, which is kind of think the expectations that we have in our minds over here.

And just another quick one on that is if you have any comments on how you're seeing the warm-up here to the World Cup? Any updates on expectations, anything on that and on the particular formats, that would be really helpful.

Like I said on the last question, we had the positive impact around the FX of 60 basis points. It was offset by the mix of the business. When I'm talking around this, I am talking the two brands that where we have more growth were Domino's and Starbucks. And obviously, the gross margin maybe is not that right like some other brands like in the casual business, but only talking at the gross margin level. Then obviously, when you see the EBITDA per wall, they are great contributors and you know perfectly well the payback that we have in these two brands.

And additionally, maybe the flat part of the gross margin is regarding the start-up of the distribution center in Guadalajara. This is not a surprise. We were expecting this, and it was included into the into the guidance that we delivered more than 1 month ago, it was around 20 basis points of negative impact. By the third and fourth quarter, we are eliminating this impact. So you will see an expansion of the gross margin in the last two quarters.

Ulises, and let me share a little -- give you a little bit of color on what's going on and what we're expecting towards the World Cup. Specifically in Mexico, across all of our brands, we have very strong initiatives in Q2 around value and innovation. we continue considering innovation as one of our key levers to drive profitable traffic.

We are also, in a way, as you mentioned, levering the FIFA World Cup, but our initiatives go beyond and ahead of the World Cup. We are confident that World Cup will be a key driver in increasing traffic across our stores. And at the same time, we continue to execute our remodeling plan. For example, in Foodservice Mexico, we pretty much are done with all our remodelings and investment in technology, particularly in our Chili's brand which, as you know, is one of the preferred places to see the games and sports.

And we are done with remodeling. So we are ready for the World Cup traffic. And likewise, in Starbucks, we remain on track to deliver our committed plan. So this -- we expect a strong performance in the months of May and June due to these particular initiatives that, as I mentioned, are beyond the World Cup. We understand the World Cup is a moment in time, but we are -- we have strong initiatives to be able not to also -- not only to profit from the World Cup, but also to continue driving the traffic through innovation and value.

Our next question is from Mr. Antonio Hernandez from Actinver.

Can you hear me there?

Yes, we can.

Perfect. I just wanted to get a sense regarding any consumer perspective on perhaps how Vips is behaving lately and your outlook for the year, especially as the consumer overall environment hasn't been that up. So any specific strategy there that can prepare you for the remainder of the year? And maybe if the World Cup is also a tailwind there?

You mentioned Vips. As you have seen in the results of Q1, Vips continues driving strong traffic into their stores. I would say that the main initiative and the main driver of this is the Menuelvia, which, as I mentioned before, by adjusting and adapting our value proposition with new dishes, we keep the customer engaged, but at the same time, we are careful to maintain the margin. And clearly, this is not a consequence of actions from the first quarter. This is a consequence of, I would say, a consistent execution on this platform, which clearly the customer is recognizing.

And as I mentioned and answer to Ulises question, we are pretty much focusing our initiatives on value and innovation. I'm sorry, I have been repeating myself on these particular words, but it's clearly what we are seeing with innovation is that it's the most profitable traffic drivers, driving way to do it. We can go to drive traffic through promotions or to lowering prices. But the reality is that we are clearly recognizing that innovation is what is driving the most important and profitable traffic across our different brands.

And as I mentioned, we have a strong list of different actions across our different brands, not only in Mexico, likewise in South America and Europe to maintain this particular trends.

Our next question is from Ms. Isabella Lamas from UBS.

A quick one from our side. I would like to go into further details about the protein-based beverage for Starbucks that you've mentioned previously. If you could comment a bit more on the level of growth you're seeing and how is consumer adoption growing and maybe how good that could be in the midterm? And also a bit more of detail in terms of ticket prices and how this could be maybe accretive to margins and every more detail that you could share, I would appreciate it.

Sure, Isabella. Protein, the protein platform was very much expected in Mexico and other geographies like in Europe. This -- the way we like to describe innovation is through breakthrough innovation, disruptive innovation and category innovation. So innovating over the same platforms that we were already having. So this particular protein innovation kind of falls between disruptive or -- and at the same time, category innovation, which is pretty much based on our beverage platform.

So we are happy with the with the results, we are in line with the expected results of this particular platform. But most important is how we can continue building on top of it. It's -- right now, we did the launch, but eventually how you continue evolving and building over this particular platform. I will -- Gerardo, I will ask Gerardo to share with you specific details on the USDs and how this has been positively impacting traffic in the stores. But clearly, we are happy and optimistic about what we have -- what the platform has delivered so far.

But most important is the prices, as I mentioned a few seconds -- a few minutes, innovation, when you innovate in drinks and certain categories, you can do put certain markup on the prices. And this allows us to have a profitable base of -- on our beverage portfolio without impacting margins. But clearly, most important is how this drives traffic to our stores. And we have this influence from the U.S. So in a way, this platform was pretty much expected a few months ago.

Our next question is from Mr. Alvaro Garcia from BTG Pactual.

I have a question on interest expense. Can you hear me?

Yes, we can.

Awesome. I have a question on interest expense for Fed. Obviously, big liability management in early January, early in the quarter. It would seem to be that the benefits of that weren't fully reflected in the quarter. So if you could speak to maybe how much of the increase in interest expense was driven by IFRS related items versus your sort of core interest expense on your debt service would be really helpful.

Yes, Alvaro. As I mentioned in my remarks, we had a one-off impact from the early settlement of the debt, the breakup of -- or the unwind of the forwards that we had in place for the USD bond, and this was around MXN 250 million. This is a one-off for the year, and it was completely taken into account with the refinancing.

And additionally, in 2025, we had a positive noncash FX gain of around MXN 130 million. And that's fully reflected in this quarter, and that's the 100% of the increase.

Going forward, you will see reflected the savings that we talked about 2 months ago of around $25 million year-over-year.

So the MXN 250 million is reflected in your interest expense this quarter?

Exactly.

Great. Cool. And then maybe just one last one on Spain. We haven't spoken about Vips in Spain for a while. So how do you think the World Cup could impact traffic there? And how do you feel about Vips Spain in an environment where sort of consumer confidence is waning?

You mean Vips Spain or Mexico?

[indiscernible] Spain?

The reality is that Vips Spain is one of the -- as I mentioned before, one of our very consistent and best performing brands across the portfolio. I'm going to answer the question in two ways. First of all, for -- particularly for Mexico, the brands that we see that are going to be most benefit by the World Cup are going to be Chili's, Starbucks and Domino's Pizza due to obviously -- in the case of Chili's, it's the preferred place to go and see sports and the games and the schedules of the games are very convenient in order for us. Obviously, Domino's with the nature of delivery and historically has been a preferred brand to share with the games. And in the case of Starbucks, obviously, with the incremental traffic that we're going to have in different cities, not only the cities that are going to be hosting the games, but also some of the airports and some of the additional venues that are going to be linked to the games in Mexico City, Guadalajara and Monterrey. In the case of Spain, I mean, I would say that is not necessarily going to be benefited by the World Cup. It's more the different initiatives that we have launched around the menu innovation, around new platforms, which are driving different incremental traffic.

Right now, we launched a new sandwiches campaign, which is performing extremely well with some bringing back classics, but at the same time, with interesting innovations as a Torta sandwich and other more premium products and also a platform that we call the -- perfect Plato Perfecto, which is driving a different type of we continue pampering our existing consumers, but we are launching different platforms that are driving a new type of consumer, some dishes that are a little bit more priced with a more premium dishes, but also at the same time, what we call Plato Perfecto, which are dishes which have a very friendly menu for business and office workers.

So in a way, I'm sorry, I cannot link to the World Cup performance, this particular brand and particularly in Spain, but more with what they are doing with different platforms to continue engaging traffic, existing and new traffic.

The brand that will have a change on the trend will be Domino's Pizza in Spain.

Because of the culture -- the full service restaurant in Mexico and in Spain is completely different, and this is around culture. We cannot expect that the same teams working in Mexico for the full service linked to the World Cup works in Spain, and that's part of our job. Domino's Pizza will have a double impact.

For example, in Spain, we don't have the TV, the technology. It's not necessarily the place to go and watch the games.

Yes. And I guess just now that we're on this topic, and sorry for taking so much time. But in the context of, how are you thinking about throughput for Starbucks and Domino's specifically? So hiring more people to attend to the increase in demand you expect? How should we think about that into May and June?

Absolutely. We are preparing, as I mentioned before, Chili's, Starbucks and Domino's to make sure we capture every single customer that we can capture. And this includes different initiatives in some restaurants and particularly in Chili's, we are adding additional seating, tables, investing on TVs, on audio to make sure the customer gets the most out of the game in Domino's Pizza with the crew and delivery particularly. And in Starbucks, likewise, with enough partners to satisfy the demand. And fortunately, we have a strong base of collaborators across the different brands and regions and our model is very flexible to be able to cover this demand Alvaro.

Our next question is from Mr. Thiago Bortoluci from Goldman Sachs.

First of all, we all know it's been a challenging quarter. But in context of a weak demand in Mexico, I think your numbers were remarkable and just showcasing the consistency of the strategy. Congrats on the good evolution in terms of free cash flow generation in a quarter that we know seasonality isn't positive, but it's improving.

And my question is related to that, right? We all know part of the improvement in free cash flow generation has to do with accounting with better EBITDA, has to do with growth, lower CapEx, but the debt service burden is an important component of that moving part. And to this point, you already have a guidance of the $20 million improvement on your net financial expense this year. I'm just wondering how this ties up to the evolution of your gross leverage, right?

You're improving free cash flow generation. Your leverage is much more comfortable now. You are moderating the pace of openings, yet your gross leverage got up in the first quarter. And 2 weeks ago, you had a new issuance, right, in the local market. So how should we balance the better cost of debt of these new lines versus the old high yields that you have with probably -- and let me know, but a higher balance of gross debt going forward and how that might impact the trajectory of your debt service burden?

Okay. I will start by part. I will answer by part your question, Thiago, because it's really complex. The accounting is pretty much the same. We do not have any kind of impact by accounting because we would be lying and you will see that by the cash position at the end. So that is pretty much the same, both from beginning -- by the end of the 2024, we started to change the conditions with the different suppliers and creditors we work about it. And that is the answer that you are looking at the balance sheet by now.

Obviously, -- as you know, we have the cash of all the top line of all the revenues in debit by maybe 1 or 2 days, and we pay to the different suppliers in 45 or 60 days depending on the region we are moving. So that is part of the working capital generation that we have year-over-year, obviously, always taking into account that we have more openings that we are increasing the same-store sales talking our own traffic, ticket, and we will have to generate more working capital.

Talking regarding the gross leverage, we have that increase because of the certain peaks that we have in the curve. As you remember, during the first 5 months of the year, we used to burn cash because of the working capital needs that we generated during the last quarter year-over-year because of the seasonality of the business. But by the end of the year, you will see net debt better than the last year-end. As you know, we have just finished with the liability management, not only with the U.S. dollar bond and the eurobond, but last Friday, we refinanced the local bonds that we had in place. So by the end of the year, we expect to have a minor gross debt and a better net debt. So that is the answer.

That was the last question. I will now hand over to Mr. Christian Gurria for final comments.

First of all, I want to thank you all for your interest and your questions today. If you have any additional questions or require further information, our Investor Relations team is always available to assist you. We wish you an excellent day and look forward to having you join us for our next quarterly call update. Thank you very much, and have a great day. Thank you.

Thank you.

Thank you.

Alsea would like to thank you for participating in today's video conference. You may now disconnect.

Good morning, everyone, and thank you for joining Alsea's Fourth Quarter and Full Year 2025 Earnings Video Conference. Today, you will hear from Christian Gurría, our Chief Financial Officer; and Federico Rodríguez, our Chief Financial Officer. Christian will walk us through our operating performance and strategic progress, while Federico will provide a detailed review of our financial results and capital allocation.

Before we begin, I would like to remind you that some of our comments today contain forward-looking statements based on our current expectations. Actual results may differ materially. Today's discussion should be considered alongside the disclaimers included in our earnings release and our most recent filings with the Bolsa Mexicana de Valores. The company undertakes no obligation to update these statements. Unless otherwise specified, all figures discussed today are presented on a pre-IFRS 16 basis. With that, I will now turn the call over to Christian for his opening remarks.

Thank you, everyone, and good morning, and thank you very much for joining us today. I will begin with an overview of our performance for the fourth quarter and full year 2025, highlighting key operating trends across regions and brands as well as our progress in digital transformation, expansion and ESG initiatives. Federico will then walk you through the financial results in more detail. Before going into the quarterly figures, I would like to briefly step back and reflect on how our strategic priorities throughout 2025 are shaping our business today.

Despite a challenging start of the year, we responded with targeted operational and portfolio initiatives that led to a gradual improvement in performance as the year progressed. Throughout 2025, we focused on strengthening traffic and innovation to keep our brands remaining relevant and top of mind for our consumers. At the same time, we adopted a more selective and disciplined approach to growth, directing capital towards formats and initiatives with consistently strong returns. This included strengthening our portfolio through the incorporation of brands such as Chipotle and Raising Canes into the Alsea family, fully aligned with our long-term objectives, the right brands in the right geographies and the right stores, prioritizing quality over quantity.

In parallel, we simplify our portfolio through the divestment of noncore assets in South America and Europe. This is part of our core strategy going forward as we will continue with this simplification as we are aiming to have a healthier and more profitable portfolio. The aforementioned is enabling us to concentrate resources on markets and brands with a stronger growth potential, translating into meaningful improvements in efficiency and profitability. Finally, we sharpened our approach to capital allocation and cash generation, optimizing CapEx and reinforcing our financial structure. With that context, let me now turn to our fourth quarter performance.

In the fourth quarter, total sales increased by 0.5% year-over-year. reaching MXN 21.7 billion or 12%, excluding foreign exchange effects. Same-store sales grew 3.3% during the quarter, reflecting improving trends across several markets. EBITDA increased 2.9% year-over-year to MXN 3.7 billion with a margin of 16.8%, representing a 40 basis point expansion versus last year. Same-store sales grew 3.3% during the quarter, reflecting improving trends across several markets. The results reflected disciplined execution, improving operating leverage and the benefits of portfolio optimization efforts. Turning on brand performance. At Starbucks Alsea, same-store sales increased 2.9% in the quarter. In Mexico, same-store sales grew 2.6% with prior quarters and reflecting a stable demand and consistent performance. In Europe, same-store sales declined 0.3%, primarily due to continued pressure in France, partially offset by solid performance in Spain.

In South America, same-store sales increased 8.8%, driven by Argentina. Excluding Argentina, same-store sales grew 1.1%, supported by strength in Colombia and gradual recovery in Chile. Domino's Pizza Alsea delivered a 5.2% increase in same-store sales. In Mexico, same-store sales grew 6.3%, supported by innovation such as 'croissant' Pizza, driving value and innovation. Also, we launched and expanded delivery capabilities through a strategic aggregator in Mexico. In Spain, same-store sales increased 3.3%, reflecting effective promotional execution. And in Colombia, same-store sales rose 9.6%, demonstrating a strong and consistent performance through the year.

At Burger King, same-store sales, excluding Argentina declined 3.9%. In Mexico, same-store sales decreased 4.8%, reflecting continued pressure on the brand despite gradual operational improvements during the year. The full-service restaurant segment delivered same-store sales growth of 3% in the quarter. In Mexico, same-store sales increased by 3.8% supported by value propositions such as Menu del Dia, Tres Para Mi in Chili's and Paradiso Italiano in Italiannis. In Spain, same-store sales grew 1.9% alongside the continued portfolio optimization, including the sale of TGI Fridays. In South America, same-store sales increased 2.8% alongside the sale of Chili's and P.F. Chang's restaurants in Chile.

Our expansion strategy continues to be guided by a clear focus on quality, returns and capital efficiency. During the fourth quarter, we opened 55 new stores, bringing total openings in 2025 to 169 units, 127 of them being corporate and 42 franchises, below our initial expectations. This reflects a deliberate shift towards fewer higher-quality investments, prioritizing locations and formats with a stronger return profiles. Remodeling and the renovation of our existing portfolio remain as a key priority across regions as store refreshes continue to deliver attractive returns through improved customer experience, higher productivity and faster payback periods.

Overall, our expansion approach in 2025 reflects disciplined capital allocation and a clear focus on long-term value creation. Our digital platforms remain a key growth driver for Alsea. By the end of the quarter, loyalty sales increased 13.4% to MXN 8.2 billion, representing 30.6% of total sales and 36.6 million orders. We surpassed 8.2 million loyalty active customers and users across our brands, confirming the strength of our digital engagement. In addition, during the quarter, Domino's implemented full service through an agreement with a known aggregator. This initiative significantly expanded delivery coverage by more than doubling the number of available drivers per store, improving service levels during peak hours without incremental costs.

During the quarter, we continue advancing on our ESG agenda as a core pillar of our long-term strategy, fully aligned with capital allocation and risk management. In Europe, we completed our first round of sustainable financing for EUR 273 million, linked to targets for emission reductions, strengthening supplier assessment base on ESG criteria and improving food waste management. This progress enabled a second ESG-linked financing tranche up to MXN 550 million through 2029. Additionally, in Mexico, we further aligned our strategy by securing a sustainability-linked loan of MXN 10.5 billion tied to KPIs focused on emissions intensity and waste reduction.

In Mexico, during the months of October and November, [Indiscernible] movement raised more than MXN 50 million as part of its annual fundraising initiative. These efforts were reflected in our continued inclusion in the Dow Jones Sustainability Index in 2025, scoring 18 percentage points above the global sector average and ranking within the top 10% of the industry. For Alsea, ESG is embedded in how we allocate capital, manage risk and create long-term value. With that, I will now turn the call to Federico to review our financial performance. Thank you.

Thank you, Christian. Good morning, everyone. In the fourth quarter, sales increased 0.5% year-over-year, supported by sustained consumer preference for our brands and effective commercial strategies. Excluding foreign exchange effects, sales increased 12%. In Mexico, the sales increased 7.9% to MXN 12.5 billion. In Europe, sales declined 1.2% in peso terms, while increasing 5% in euros and in South America, the sales declined largely due to currency effects. The EBITDA increased 2.9% year-over-year with a 40 basis points margin expansion, driven by stable food cost, disciplined execution and improved labor efficiencies.

In Mexico, the adjusted EBITDA increased 17.1% year-over-year, primarily due to an increase in same-store sales of 3.1%, following a strong recovery in November and December, while the portfolio optimization and improved labor efficiencies helped offset higher wage cost. In Europe, adjusted EBITDA was 18.7% higher year-over-year, driven by a 1.7% increase in same-store sales, lower food cost and disciplined labor cost management. In South America, the adjusted EBITDA declined by 22.9%, largely due to the depreciation of the Argentine peso relative to the Mexican peso. This impact was partially mitigated by robust consumer demand in Colombia and stable market conditions in Chile, although Argentina continued to experience a more challenging operating environment.

The net income for the quarter increased 32% year-over-year to MXN 812 million, reflecting a continued though less pronounced positive noncash foreign exchange effect related to U.S. dollar-denominated debt. As we have mentioned previous quarters, this impact is nonrecurring. Following the refinancing of the obligations, we have now achieved a natural hedge, and this revaluation will no longer affect the P&L going forward.

CapEx for the full year totaled MXN 5.1 billion. Of this amount, 75% was allocated to store development, including the opening of 127 new corporate units, remodelings and equipment replacement, while 25% was directed to strategic projects, including the Guadalajara distribution center, technology upgrades and process improvements. As of December 31, 2025, the pre-IFRS 16 gross debt increased by MXN 0.9 billion year-over-year, reaching MXN 34 billion. The company's net debt, not counting the impact of IFRS 16 was MXN 28.3 billion, which is MXN 1.7 billion more than it was at the same time last year. The bank loans are allocated towards selling the minority stake in the European operations as well as addressing short-term debt requirements for working capital and capital expenditure needs. Consolidated net debt reached MXN 45.2 billion, including lease liabilities. At the end of the quarter, 58% of the debt was long term with 77% denominated in Mexican pesos and 22% in euros. We remain focused on maintaining a healthy capital structure supported by prudent financial management. At the end of the quarter, the cash position stood at MXN 5.7 billion.

Turning to financial ratios. The total debt to post-IFRS 16 EBITDA ratio closed the quarter at 2.8x and the net debt-to-EBITDA ratio stood at 2.5x. Our full year results were broadly in line with the guidance we provided and subsequently updated during 2025. Same-store sales revenue growth, EBITDA and leverage all finished within expected ranges. We will provide more detail regarding the guidance for 2026 during Alsea Day on March 18 in New York City. This will be a great opportunity to invite everyone to our event and connect with you. With that, we will now open the call for questions. Please, operator.

[Operator Instructions] The first question is from Mr. Thiago Bortoluci from Goldman Sachs.

I have 2 questions somehow related to free cash flow, right? When I try to see what you delivered in 2025 versus what is implied in your managerial guidance, right, what I see was that your EBITDA grew at the high end of your low single-digit expectations. CapEx came below the $6 billion you were initially expecting, but your pre-IFRS leverage was a touch ahead of the 2.8x that you were guiding, right, which makes me think that somehow your free cash flow generation was a little bit softer than initially expected. If this is true, I just like to understand where the mess is coming from? And what is the plan to attack this going forward? I guess the refinancing is part of the story, but also want to hear on the operating level, right?

And then the second part of the question that is related to CapEx. I appreciate the focus, and I'm pretty sure everyone in this call appreciate your focus on portfolio and a more rational growth going forward. It would be great if you could share how you're seeing the incremental ROIC of the new cohort of stores under this new balance between growth and profitability on the capital allocation.

Well, I will start with the first question regarding the cash burn. Yes, it's correct what you just said, Thiago. The main driver for the cash burn was worse working capital than expected at the beginning of 2025, mainly driven by a reduction in the expected EBITDA. As you know, we had to change the initial guidance we announced at March. But that was offset with a diminished CapEx. In 2026, the story will be completely different. You will have the expectations in the Alsea Day by mid-March. But the management is totally focused on the free cash flow generation with some initiatives you have just mentioned one, the refinancing, you know what is going to be the annual savings regarding this in the line of $25 million and additionally, the operating leverage from same-store sales. As you know, we will have a low to mid-single digit regarding same-store sales guidance for each one of the brands and will be to the consolidated figures and a more rationalized CapEx. This is one of the key drivers, Thiago.

Obviously, we knew that we were failing at free cash flow generation. We have heard around the pushback you have launched to the management, to the administration during the last years. So we are totally focused there. So we'll rationalize the CapEx with less openings. Obviously, we had one one-off because of the distribution center of Guadalajara, but we do not have any kind of pressure to open more stores. As I have said a lot of times in the past, 95% of Alsea is in the same-store sales in the comparable stores. So that is the place where we have to put all the efforts because it is more relevant to have 1% increase in the traffic in the different brands because that is the key part where you have all the operating leverage. And in some of the cases, maybe have a reduction of around 30 new stores from the initial guidance, that does not make any kind of hurt. And it is not only for this year, but maybe for the future. We do not want to conquer the world regarding openings. We want to have a more rationalized CapEx for the future. And this is aligned with what you have just asked regarding free cash flow generation. I don't know, Christian, if you want to deep dive regarding the openings and the closure that we had in 2025?

Yes. As Federico mentioned and we have mentioned in previous calls, our strategy is more about quality than quantity. As Federico mentioned, really our focus right now is on capitalizing on our existing assets. We have almost 5,000 stores in our portfolio between franchisee and company-owned stores. And we have a clear strategy on how we can improve the profitability of those stores. There are 3 levers that we are working on. The first is the remodeling and investing on our existing portfolio, which has the best returns and the customer responds in a very positive way to that and keeps our brands at the right level to deliver the right experience. And the second one is to make sure we have the best operators in the market. So we are -- we have always focused in Alsea in having the best operators, but we are having now a very intentional drive into elevating our operators in the stores.

And the third level is, I would say, innovation. Innovation is clearly driving our -- the traffic to our stores. We have a very good example is what we are doing with 'croissant' Pizza, in Domino's Pizza in Mexico. This was originally born in Spain with extraordinary results. We brought it to Mexico and more than double the expectations that we had, and that's why you see a very strong quarter in 2025, particularly with Domino's. So these are the levers that we are moving. Of course, we will continue with our commitment to open the right stores. But it's important to mention the right stores in the right geographies and with the right brands which, as I always say, sometimes we have to close stores to have a healthier portfolio as we have done.

Nevertheless, most of the stores that we closed, either in this number, you can see divestments as we did with TGI Friday's and Chili's and P.F. Chang's in Chile. But likewise, most of the stores that we closed were -- had an aging of average 15 years. So the market has changed, the neighborhoods, the trade areas have changed. So it's part of this healthier portfolio optimization.

Our next question is from Mr. Antonio Hernandez from Actinver.

Congrats on your results. Just a quick one regarding South America. I mean you already mentioned Argentina is struggling a little bit there and different countries overall. Just wanted to get a sense on how you're seeing performance so far this year and expectations for the year.

Well, we are seeing very similar trends to November and December. with a positive trend on same-store sales. And one of the best news is the tailwinds we are having in terms of our dollarized raw materials. We have seen FX is helping us with the dollarized raw materials. And we have also positive news in terms of the price of beef and the price of chicken, which is having a positive trend to what we were seeing in the previous year. And also another positive effect is that we expect a reduction of coffee prices in the second half of 2026. So on wine side, we are seeing a very similar trend to the last months of the year, which we see a shift on what we were seeing in previous months. And on the other hand, different strategies around raw materials on one side, the FX and on the other side, some of the different synergies we have worked on the previous months are paying off now. So in these terms, we should see better margins in the following -- across the year and a steady recovery on same-store sales.

And I would say, Antonio, if I may add a little bit more color on -- particularly, I would say on the 3 big markets of South America. We've been doing a great job in Colombia. It's been kind of consistent. That's something that continues, I would say, towards the beginning of the year. The same, I would say, it's happening with Argentina and Chile. If I would say, '25 was a tough year for those 2 markets for 2 particular, let's say, reasons and different reasons, both. I think we are seeing also at the end of last year, a bit of a recovery. And that is, I would say, also transitioning towards the beginning of the year. So I would say we're more kind of cautiously optimistic. And I would say, together to what Christian mentioned about kind of some of the tailwinds should be a better year for this market.

Our next question is from Ms. Renata Cabral from Citi.

My first one is regarding Starbucks in Mexico. So what is the current approach for same-store sales improvement during the year? We are seeing a very good improvement over the operations of in Mexico, it seems more towards Dominos so far and it's understandable considering the economic situation. But it seems there's an opportunity also for improvement in the. So if you can shed some light in the strategies for the year ahead, it would be really helpful. The second one is a follow-up regarding margins and a more long-term perspective. Of course, you have mentioned about the rationalization of the portfolio. And my question is related also if you see other important levers that can improve margins in the regions for instance, supply chain or optimization of, let's say, it would be really helpful to know a little bit more about that.

Thank you, Renata. Regarding Starbucks in Mexico, we had -- in 2025, we struggle at the beginning of the year as with many other brands. But starting the second half of the year, we were able to read and what was going on with the market and the different trends from -- and what the customer was looking forward. So we adjusted our strategies to -- first of all, we've clearly seen that Starbucks in Mexico is a loved brand. And clearly, innovation is driving a lot of traffic to our stores, both innovation in terms of product, but also innovation in terms of market. of merchandising.

During Q4, we launched -- we brought to Mexico the Barista, the Crystal Barista, which was, as you may be aware, extraordinary success in Asia, then in the U.S. And then it came to Mexico and it was really driving a lot of transactions. So we also -- in this case, we also shifted the way we manage our promotional approach to the brand making sure we could elevate the customer -- the experience of the customer. So to give you a more concrete answer, we are focusing on renewing our stores in a very intentional way. Just to give you some data in 2026 in Mexico, we're going to have more store renovations than openings in the case of Starbucks. So we really understand what the customer is looking forward.

And the second part is innovation in terms of product and understanding that we are a love brand in Mexico and people are looking forward. We just recently launched in '26 a bear that hugs the cup. And it's really -- they flew out of the shelves. So we have more and more surprises that I cannot share coming particularly for the World Cup. And also in terms of experience, we are introducing a strategy around elevating the experience in the stores by implementing wooden trays and stainless steel cutlery for here [serve ware]. Again, creating the right environment and the right and the best experience for the customer. And in terms of operational impact, as I mentioned before, we are very much focused on our -- on having the best operators and making sure they can impact positively their business during -- as we move forward. But this is more or less regarding the strategy that we are focusing.

And regarding the second question around margins for the future, is too soon. Obviously, we are seeing positive impact. But I would say that we're expecting a positive trend regarding EBITDA margin expansion for 2026 as long as we are facing, as Christian has just mentioned, and you know it, some macro tailwinds like a stronger peso. Remember that each peso appreciation or devaluation is around 30 basis points in the total EBITDA margin. And additionally, this is supporting the raw materials, the gross margin. We can move the mix in a positive way in the different business units. But remember, we want to attract more traffic to our stores. We are not in the rush to increase on an artificial way the margin. We want to have a strong customer base into the same-store sales. And obviously, we have a lot of levers. You were asking around this.

Obviously, the stronger peso is some macro reason, but we have some internal indulgent reasons such as the optimization of the portfolio. We have not finished. You know that we are analyzing some of the units, mainly in Americas to see what we are doing with them. We cannot disclose any more facts around this. I know there are a lot of news into the press, but that's all that we can say. We need to respect and being really disciplined around that we have a bunch of collaborators into the different business units that we are analyzing. And we are doing this in an everyday basis because obviously, while we are selling some of the business units, such as the 2 casual dining brands that we sold in Chile in the third quarter, we are looking for new Tier 1 brands such as Raising Canes and Chipotle. That would be one of the first lever.

The second one, we have a bunch of opportunities regarding productivity, I would say, in America, not only in Mexico, but in South America, too, especially because not this year, but in the future, we are facing a journey reduction of 8 towers in 4 years in Mexico. So we need to move forward and be in advance of the rest of the competitors. And I think that with 5,000 stores all around the world with a stronger environment such as the European one, we have a lot of ideas to increase productivity and have expansion margins into the total EBITDA while we offset these impacts. And additionally, we have ideas regarding simplifying the support center in Europe, in Mexico, in Colombia. I think that we need to consolidate a lot of things that we have not executed in the last 10 years, and we'll be doing that during 2026. But as I always say, it is more relevant to have a strong same-store sales because in the bottom, you can have a lot of savings. It's a bunch of money. But in the long term, we are more worried around comparable stores, around new openings instead of only executing saving costs in the bottom.

And if I may, a follow-up maybe for Christian about potential impacts from the situation we are seeing happening in Jalisco since Sunday. It would be great to have some color.

Of course. Renata, as a precautionary measure, we had to close some of our stores in the region during Monday -- Sunday and Monday, obviously, prioritizing the safety and security of our partners, our collaborators, our team members and also our customers. But by Tuesday morning, 100% of our stores were reopened. We are back to business as usual. Obviously, we are seeing in particular cities kind of a steady return of consumption, people being confident to get out there and going back to their lives. And delivery was clearly one of the channels highly and positively impacted by this as people were staying home. But we are clearly seeing across the week, people going back to their routines and our business recovering in a steady way.

It's also important to mention that we have -- none of our stores were damaged -- none of our stores in the region were damaged or targeted and our supply chain was never disrupted. We have some blockades, but our supply chain was fully operational and never disrupted.

Our next question is from Mr. Ulises Argote from Santander.

So the question that I had was kind of a follow-up on those earlier comments that you were making on the quality over quantity approach to the portfolio. You mentioned there in the remarks, and I think this has been kind of an ongoing discussion of focusing on store remodelings across regions as a part of the strategy. So I was wondering maybe if you could provide there some color on how this will be broken down in 2026 across the regions? Maybe if we can get some color on format. But I think more importantly, if you could comment on the sales lift and the improvements you are seeing from the remodel locations. And then I have another one, but I'll do it afterwards.

Thank you for your question. Let me start by answering we have -- in the case of the foodservice restaurant segment or casual dining or in the case of Starbucks, what we've seen is that you have -- when we remodel the stores, our same-store sales in the case of Starbucks grow from 6% to 13%. This is where we are -- what we've seen and experienced in a very consistent way. And in the case of the casual dining segment, clearly because the customer spends more time in our stores, in our restaurants, the uplift we've seen in same-store sales can go from 10% even we have cases where we are around 25% to 30% increase in same-store sales. This is driven, first of all, not only because of the look and feel of the store improves, but in many cases, as we know how the store and the customer uses the store, these renovations normally are adapted to the reality of how our customers use the store.

So -- and in any other cases, we add additional seating or we add a terrace or we do some optimization in terms of the type of the mix of furniture we have in the stores. So the reality is that that's why we are prioritizing these remodelings. Also, it's important that when we choose to remodel a store, there are different reasons, either because the store has the look and feel of the store and the conditions of the store are not up to the expectations, our expectations and the guest expectations or different strategies around market penetration, in some case, the competitive landscape. So there are different reasons why we go and decide which stores to remodel.

And to your first part of the question on if we have -- what is the breakdown? In the case -- the information I can share with you is, for example, in casual dining is 3:1, 1 opening, 3 remodelings Starbucks is around 1.4. And in Domino's Pizza, the impact is less important when you remodel a store due to the way the business model works. But when the stores that we have an important dine-in traffic, those are the stores where we put the resources, just to give you some examples.

Yes. And additionally, to Christian's answer, when we are performing a remodeling in the full service or the Starbucks stores. Usually, we tend to see an incremental traffic of around 5% to 10%. Obviously, this depends in some of the cases of casual dining, you have to increase the terrace, for example, to have more capacity. But each time you are changing the look and feel of the store, you are increasing the traffic, and that is completely linked to the same-store sales increase that we are highlighting as a target, not only for this year, but in the long term. And regarding the...

If I may also one important component is how our team members feel. Honestly, every time we remodel the store, they are always super proud. They are happy to see the store being in the best shape, and I'm proud to be part of that store.

And for the long-term CapEx allocation regarding the 3 main pillars that we have into the portfolio, I would say that 60% is completely linked to Starbucks Coffee, 20% to Domino's Pizza and 20% to the full-service restaurants units, Ulises.

Perfect. Very clear. So if I understood correctly, these initiatives are a bit more focused on Mexico, but also kind of cross region more selective. Is that a correct assumption to make?

It's across all our geographies, Ulises. Same is happening and going on in Spain, in South America, Portugal, France, et cetera. Everywhere.

Okay. Super clear. And the other question that I had was maybe if we could get some thoughts there or some -- or you share some insights of how you're positioning, let's say, to capitalize from the World Cup? Maybe any type of initiatives that you're taking? Any color that we could get there, that would be very much appreciated.

For sure. We have no doubt that the 3 brands that will be most benefited by the World Cup incremental traffic are Domino's Pizza, Starbucks and Chili's. As you know, Chili's has been the preferred concept and brand for people to go and watch sports, all types of sports for many, many years. So in the case of Chili's, we are doing very important investments in technology in terms of screens, sound and also a very, very fun campaign. As you know, there will be 3 stadiums in Mexico, Monterrey, Guadalajara and Mexico City. And we are having a campaign Chili's is your -- is the fourth stadium. So we are already out there with the campaign. We have -- we have a strong partnership with some strategic partners as Heineken, and we are doing a lot of things together with them. So we have important expectations of what -- how Chili's is going to be benefited by this. As you know, only you can fit all 85,000 to 100,000 people in the stadium, the rest, well, Chili's for sure is an extraordinary option to watch the games and with a great happening.

In the case of Starbucks, obviously, the traffic, the incremental traffic that we're going to have in different airports in hotels, and we have a very good market share of stores and penetration in Mexico and Guadalajara and Monterrey and some adjacent cities and airports that are going to be activated for the World Cup, so for sure. And we have fun initiatives coming also for the customers to drive this traffic. And obviously, Domino's Pizza watching games at home. It's going to be super powerful and Domino's Pizza and the games and the World Cup have always been linked and be together as football. So those for sure are going to be the 3 brands that are most benefit. We have a lot of surprises. We are already planning additional initiatives that we are reviewing as we speak. So for sure, we are going to be able to capitalize this very special event.

But remember, Ulises, this is a one-off.

Our next question is from Mr. Froy Mendez from JPMorgan.

Can you hear me well?

Yes, we can.

Federico, if we were to assume that the FX didn't move from current levels, would your comments regarding the better margins into 2026 would still hold? And in that sense, what is your expectation? I know you'll have your guidance in the Alsea Day, but how much of the margin expansion that you're seeing depends on having better pricing or, let's say, less promotional activity in the key brands? And I will have a second question, if I may.

Sorry for being so repetitive. But obviously, this is a tailwind. Each peso should be around 30 basis points. Remember, that maybe that implies that around 60 basis points during the first quarter year-over-year. In the remaining months, the weight and the comparison is not that much. But as I said before, obviously, we have closed January, I have the figures. They are positive. We are expanding margins. But I want to be cautious because, obviously, the events from Guadalajara, even while we only shut down 300 stores during 1 day, obviously, I'm not having the total performance regarding traffic in those stores. So as all the years, we have some different events, positive negatives, and I want to be really cautious at this point, with January completed, we have expanded the margin. But I don't know what is happening in the rest of the year. Obviously, we have positive events such as the World Cup. We'll tell you the expansion of margins that we're thinking. But again, we want to increase the traffic in each one of the stores, each one of the brands. That is the main objective.

I prefer to sacrifice some of the margin if I'm increasing -- I'm going to make stories, but 3 points in same-store sales in Chili's, Domino's Pizza, that is more money, and that is a more strong customer base for the future. Sorry for the ambiguous answer, Froy, but I don't want to take in advance with only 1 month closed at this point.

Excellent. And my second question, maybe more for Christian. We hear about this CapEx rationalization, the effort to diverse some of the probably nonperforming brands. But at the same time, we see new brands coming into the portfolio, Cane's, Chipotle with obviously not needle-moving CapEx, but I'm sure it will take time away from management. I'm not sure also how much synergies there are in their supply chain and their sourcing of raw materials with the rest of the brands. So how should we think about when we see a lot of the long-term CapEx that you mentioned focused on Starbucks, Domino's and full service with also these like small opportunities that you still are trying to tap? And isn't that a little bit distracted at some point for management?

Thank you, Froy. Several answers to different views, different points. First of all, fortunately, as you know, in Alsea, 36 years around, we are able to really develop our team members and to have a lot of internal talent that allows us to really being able to bring these brands and do not distract the rest of the organization. As you know, we -- the way we are organized now is via -- before we have these country managers, which were managing the different brands that we had in each region. And then in the past months, we have moved into a brand manager that manages -- we have a brand manager for Domino's Pizza or a Managing Director, a Managing Director for Starbucks Alsea for Domino's Pizza Alsea for BK Alsea, a Managing Director for Food Service in Mexico and a Managing Director for Food Service in Europe. That allows us to really focus first of all, make sure all best practices, learnings, one single direction and strategy to keep the brand directors or managing directors focusing on their own brands.

And likewise, we have created a new brand division, let's call it like that, where we have a team solely and fully and only dedicated to these 2 new brands. So there is really no distraction of the management. We were able to have a very strong Managing Director, which was part of our C-suite team for many, many years, Pablo de Brito, which now he is running -- he was the Commercial Director for Alsea and now he's the Head of with a very clear and independent structure for both brands.

In terms of synergies, obviously, there are synergies. We clearly have synergies. We have been working in the past 6 months to make sure we have -- we are ready to -- around all the product sourcing, protein produce. There are things that are proprietary to the brands that we will import as we do with the rest of our brands coming from the U.S. But the reality is that there are a lot of synergies. It's -- our Alsea muscle allows us to do this kind of plug-and-play approach when we bring these new brands. So clearly, there are important synergies in these terms. So in the case of supply chain and management, really, there is no -- actually, it adds on to what we already have.

Then another point you made is about the CapEx. The reality is that the way we -- the obligations we have with both brands intensive non-CapEx-intensive approach. We are going to open 2 new -- 2 Raising Cane's stores this year at the end of the fourth quarter and 3 to 4 Chipotle stores also during 2020 -- in the second half of 2026. So -- and once we see how we do, which we are very, very optimistic and positive of how these brands are going to add value and being accretive to the Alsea portfolio, we will sit down and define -- we know more or less what's the white space or the market holding capacity for both brands. We're going to share a little bit more about that during our Alsea Day. But the reality is that we are very optimistic that by first divesting and at the same time, bringing the right brands and the brands of the future in the portfolio, we have a very strong portfolio of brands in the future.

Our next question is from Mr. Bob Ford from Bank of America.

I'm inspired by your Raising Cane's cups, so I'll bite. Can you guys discuss the magnitude of the opportunity you see for the brand in Mexico? And how do you think about replicating the authenticity of the celebrity and influencer engagement that Cane's enjoys in the U.S.? And when you think about the unit economics, how would you compare that with your best practice or properties in Mexico?

As you can see, we are excited to bringing Raising Cane's into the family. In Mexico, we see a huge opportunity in Mexico for Raising Cane's. And let me tell you why. First of all, chicken is the #1 protein consumed and the fastest-growing protein in Mexico. This is clearly a fact. The second one is for decades, there has been only one player in the chicken market in Mexico in the organized segment for decades. So the white space and what we are seeing is huge. It's super important. The other -- the roasted chicken industry is hold by the moms and pops. And then you have this organized chain that has been there for decades. So the reality is that we see a lot of white space.

And also Raising Cane's is not only an amazing and Tier 1 brand, it also aligns to our full Alsea strategy. So on that -- and we will give you more light in terms of the market holding capacity that we see and our development plan during the Alsea Day in March 18.

The second question you answered, which I love this question because I truly believe that the way Raising Cane's communicates and resonates between the community for us, clearly, community is going to be a key success factor for the success of the brand and bringing this you know exactly what I'm talking about when I mentioned local teams, but at the same time, important celebrities, but at the same time, the college basketball team or the community schools team. We are already working with Raising Cane's to bring this same effect to Mexico. We are planning to have even the same agency. So the reality is that we are working very close together holding hands. Of course, we are going to take advantage of these assets in terms of influencers, celebrities that they have, but also the local influencers, the local community, the local celebrities are going to play a very important role for us to be successful. So I believe I have answered your 2 questions.

And the last one was about unit economics.

Regarding the economics, I can take that question, Bob. Obviously, we cannot disclose the terms of the agreement we have signed with Raising Cane's. But the EBITDA margins at a 4-wall level are pretty similar with Starbucks or Domino's Pizza and the same for the royalty fee and opening fee that we will be paying. It is relevant to consider that even while we are really excited about the opening of Raising Cane's and Chipotle for 2026, we will be opening, as we have commented in the past, only 5 stores. We do not want to have a terrific contribution. We need to open the first store, and let's see what is happening if we are achieving the EBITDA margins, the profitability that we model in the months before.

Great. And then just one other question, and that is France. I mean it's -- what are the next steps for you in France? And do you see any opportunities to either reduce some of the expenses or drive revenue?

Of course. Well, France, we have not seen the expected recovery that we had. There has been some recovery. We are at 85% of our sales, pre-boycott sales in October 2023. There was additional pressure, a slight pressure in the summer. So our objective remains to fully restore the transactions that we had pre-boycott. We have a very strong strategy around how to turn this around in terms of resources, in terms of store renovations, additional things that are part of this plan that we are working on. To your point around efficiencies, yes, we have done already the restructuring that we needed to do in terms of management, in terms of synergies with our operations in Europe. So we will see, for sure, better margins and better EBITDA as we move through the year. But our priority and our focus is to recover this 15% of traffic that we have not recovered yet. So we have a clear strong focus on this, and it's one of our priorities for 2026.

Our next question is from Mr. Pedro Perrone from UPS

We have a quick question from our side based on same-store sales trends in the first quarter, especially for Mexico and for Europe. If you could give us some color about these trends and especially connecting to top line, that would be very helpful.

I would say, to be clear, Mexico, Europe and South America, the trend is pretty similar to the one we have in the months of December and November. So no news, good news. As I said before, it is in the target that we have set for 2026 from low to mid-single digit depending on the maturity of the brand and the region. So that's the answer, Pedro.

Our next question is from Mr. Ben Theurer from Barclays.

This is Rahi on for Ben. Just the first one, I know Bob mentioned a bit on -- with the EU. But is there any other challenges we should be aware of for the EU that would impede recovery? And then another one I thought would be interesting is to look at GLP-1. Have you seen any impact on consumption from GLP-1 in Europe? And when do you think you would see some impact in Mexico, if any? And have you have any formulation changes in the EU in regards to GLP-1? That's it for us.

Let me get your second question first, we have not -- really, we have not seen any particular effect on GLP-1. Nevertheless, as you have seen in previous months, protein is becoming a very important element in the market. So in the case of Starbucks, we are fully in the game with different protein being an important priority in terms of beverage and our food program is moving towards that. And so what I would answer to that, we are observing. We are observing it. We are acting around that. We are trying to be ahead of the curve. But we don't see -- it's too early. I would say it's too early. But so far, we have not seen anything relevant. Obviously, the U.S. is the one kind of driving this trend. And we are watching, we are talking with our franchisors, what are they seeing -- but the reality is that we were already ahead of the curve with protein drinks in Starbucks and our food program is moving in a way towards that, not fully, but it's part of the strategy. So more or less that. And the rest of the brands, really not really. We are watching, but -- and that's it. We are observing what's going on.

I just want to follow up for that answer. It was for the EU as well, right? So no impact as well.

Exactly. Neither in the European Union or in Mexico or Latin America, we are seeing these types of effects. What we -- I can tell you to add a little bit of color to that is that it's more now protein, it's more like trendy and innovation more than linked to GLP-1 or any of its effects, I would say, positive or negative.

Yes. I'm complementing the answer. France is less than 2% of the total revenues contribution for Alsea. In Europe, we are present in Iberia, Spain and Portugal. I would say that is the most relevant contribution for Europe. The trend is positive. We are expanding margin, increasing the same-store sales coming from traffic in the main brands such as Domino's, Starbucks and the full-service formats that we hold in there. And even while in France, we're still at around 85% of the traffic that we had in 2023 is less relevant, but we still see the opportunity in there to open more stores. We will be struggling during 2026 to see if in 2027, we can return to the path of growth.

That was the last question. I will now hand over to Mr. Christian Gurría for final comments.

First of all, thank you all very much for your questions and for your interest in Alsea. And really thank you very much. 2025 reinforced the resilience of our business and the strength of our portfolio. We entered 2026 with a clear focus, a stronger financial position and a disciplined approach to profitable growth. We look forward to continue the dialogue with you in the coming months. But most of all, we're really looking forward to see you all in New York. We are preparing a very -- the team is doing an amazing job to prepare a very good event there, and we are really looking forward to see you there. And thank you again.

Alsea would like to thank you for participating in today's video conference. You may now disconnect.

Good morning, everyone, and welcome to Alsea's Third Quarter 2025 Earnings Media Conference. My name is Gerardo Lozoya, Head of Investor Relations and Corporate Affairs.

Today, you will hear from our Chief Executive Officer, Christian Gurría; and Federico Rodríguez, our Chief Financial Officer.

Before we continue, a friendly reminder that some of our comments today will contain forward-looking statements based on our current view of our business, and that future results may differ materially from these statements. Today's call should be considered in conjunction with disclaimers in our earnings release and our most recent Bolsa Mexicana de Valores report. The company is not obliged to update or revise any such forward-looking statements. Please note that unless specified otherwise, the earnings numbers referred to are based on the pre-IFRS 16 standards.

I will now hand it over to Christian for his initial remarks. Please go ahead, Chris.

Thank you, Gerardo. Good morning, everyone, and thank you for being with us today. Thank you. Today, I'll provide an overview of our third quarter results, covering our financial earnings, regional highlights and key brand developments. I will also highlight our progress on digital transformation, ESG initiatives and expansion strategy. Federico, our CFO, will follow me with an analysis of our results, including revisions to our 2025 guidance.

Before we turn to the quarterly results, I want to remind everyone of the continued focus on our strategic priorities that will guide us moving forward. As we mentioned last quarter, our first priority is to continue driving disciplined organic growth. We remain focused on expansion and innovation to drive same-store sales growth, prioritizing traffic over price increases.

We will also improve our customer experience and advance our digital capabilities. In addition, we will continue rolling out successful commercial campaigns such as Menu Del Dia from Vips in Mexico and Spain, Tres para mi or three for me in Chili's in Mexico, Paradiso Italiano with Italiannis in Mexico and Gourmet Burgers from Foster's Hollywood, among others, other initiatives, which have consistently improved our product offering and reflect our commitment on innovation.

Our second priority is to optimize our brand portfolio. We will prioritize return on investment by ensuring that each brand and store format is aligned with the needs of each regional market. Also, scalability and growth across all brands remain a core focus to unlock their full potential. We are also addressing and analyzing potential divestments on non-core assets to concentrate on the business with the greatest strategic and financial value. Our third priority is to enhance profitability. More value is being generated in our existing stores portfolio through consistent operational improvements by leveraging the strength of what we call high-impact operational talent.

Organic growth is supported by strategic new store openings and the remodeling of key locations. As mentioned, 2 stores are being remodeled for every opening as refreshing the existing base delivers faster and more efficient returns on capital. Finally, our fourth priority consists on discipline and strategic capital allocation. We will prioritize growth and productivity initiatives with clear return thresholds. Also, vertical integration and long-term sustainability continue to be central to our strategy. Our CapEx plan is being optimized, adjusting long-term investments to become even more efficient and ensuring every peso invested aligns with our capital allocation priorities as well as different G&A efficiencies that we have been consolidating and working through the year.

Now I'll provide an overview of our quarterly performance, including our financial results, regional highlights and key brand developments, along with updates on our digital advancement ESG initiatives and expansion strategy. In the third quarter, we reported a 5.7% year-over-year increase in total sales, reaching MXN 21 billion or a 6.7% increase, excluding foreign exchange effects, same-store sales grew by 4.1%. EBITDA increased 1.8% in the third quarter, reaching MXN 2.9 billion with a margin of 13.7%, decreasing by 50 basis points year-over-year. Regarding brand performance during the third quarter, Starbucks Alsea same-store sales increased by 3.9%. For Starbucks Mexico, same-store sales grew by 3.3%, demonstrating solid in-store performance backed by our loyal customer base.

For Starbucks Europe, same-store sales increased by 1.6%, reflecting a challenging environment in France, offset by continued strong momentum in Spain, driven by effective commercial initiatives. Given the strong results in Spain and the importance of the brand in the country, we are very excited about the latest opening of our flagship store in the Santiago Bernabeu Stadium, Starbucks Bernabeu. Finally, in South America, same-store sales rose 9.6%, driven primarily by Argentina. Excluding Argentina, same-store sales declined 1.3%.

Nonetheless, there is a sequential improvement in Chile despite lower traffic. Domino's Pizza Alsea posted 2.6% increase in same-store sales. In Mexico, Domino's same-store sales increased 1.6%, driven by our continued efforts in product innovation. In Spain, same-store sales increased by 2.9%, reflecting the ongoing effective promotional efforts and positive customer response to product innovation. In Colombia, Domino's delivered strong results. Same-store sales increased by 9.1%, supported by successful marketing initiatives. Burger King's Alsea same-store sales, excluding Argentina, decreased 1.4%. In Mexico, Burger King reported a decrease in same-store sales of 1.7%.

This was driven by a shift of mix towards low price and discount items, combined with a decrease in premium innovation and digital coupon. The full-service restaurant segment delivered a 4% same-store sales growth. This segment remains strong and resilient, supported by marketing campaigns that enhance our product offering and demonstrates our commitment to innovation. Full-service restaurants in Mexico increased by 5.3%, with most brands growing at mid-single-digit pace with Chili's and Italiannis, while Chili's and Italiannis stood out by achieving high single-digit growth.

The performance was driven by the strength of our value product menu offering, product innovation and launches. Same-store sales for full-service restaurants in Spain grew 2.4% with Foster Hollywood and Gino's delivering solid growth of 5.5% and 4%, respectively. We are focusing on introducing new and premium products to attract new guests, capitalize on existing traffic and strengthening our customer loyalty. Our global expansion strategy remains focused on prioritizing quality over quantity, targeting the most profitable opportunities across our key markets. We remain committed to delivering strong value to our customers, maintaining our pricing strategy and customer loyalty through our resilient brand offering.

In the third quarter, we opened 46 new stores, 35 corporate units and 11 franchises with an emphasis on high traffic and high potential locations. We expect the pace of openings to pick up on the fourth quarter to meet our full year goal for net stores. This approach reflects our commitment to long-term brand positioning and disciplined strategic growth through flagship developments and selective market expansion. Given the profitability and payback of store remodeling, such as increased customer satisfaction and higher sales, we will continue prioritizing a refresh and modernized look across all our locations.

Our digital platforms continue to be key drivers of growth. By the end of the quarter, loyalty sales increased 7.9%, reaching MXN 5.1 billion, representing 24.6 million orders and contributing 26.1% of total sales. We also surpassed 8 million active users across our loyalty programs, confirming the strength of our digital engagement. Additionally, we served nearly 33.6 million digital orders in the quarter, totaling MXN 7.3 billion, which represents 37.4% of our total sales. This quarter, we continue to strengthen our sustainability model by aligning our purpose with every aspect of our operations.

As part of this effort, we made significant strides towards reducing CO2 emissions, installing over 215 solar panels in Europe and installing 159 kilowatt per hour of power in Europe in Spain. In Mexico, Starbucks served over 1 million beverage in reusable cups and granted 3.9 million -- 3.2 disposable cups as part of our efforts to reduce waste. We also continue to strengthen our social impact through Fundación Alsea and Movimento Va por mi Cuenta, supporting vulnerable communities and driving positive change. As we launch new fundraising campaign, we expect to surpass previous year's results, reinforcing our long-term commitment to responsible, purpose-driven growth.

Let me now turn it over to Federico, our CFO, who will provide further insight and financial performance. Thank you.

Thank you, Christian. Good morning, everyone. During the quarter, the sales increased by 5.7%, supported by the brand resilience and a strong performance in Mexico, Spain and Colombia. Excluding foreign exchange effects, sales increased 6.7%. In the third quarter, sales in Mexico were up 7.5% to MXN 11.5 billion. In Europe, sales increased by 8.2% to MXN 6.5 billion, while in euro terms, sales increased by 3.8%. Finally, South America sales fell 4.7% to MXN 3.1 billion.

The EBITDA increased by 1.8% with a margin contraction of 50 basis points, mainly due to a loss of operating leverage given the lower consumer environment in the month of September. These impacts were partially offset by the resilience of the brands across most regions, disciplined revenue management and improved SG&A efficiency. In this context, we chose to limit price increases to protect traffic and sustain brand competitiveness with consumer demand slowdown. In Mexico, adjusted EBITDA remained flat as there was lower operating leverage given the softer consumer environment in the month of September.

In Europe, adjusted EBITDA increased by 6.2% year-over-year, primarily due to an increase in same-store sales of 2.3%, driven by new products and campaign launches that led to improvements in all brands, offsetting higher labor costs. In South America, adjusted EBITDA decreased by 14.2%, reflecting a lower consumption environment in the region, except for Colombia. A slowdown in consumer activity weighted on operating leverage and contributed to the slow recovery in the region.

The net income for the quarter increased 559% year-over-year, reaching MXN 512 million, reflecting a positive noncash effect, which reduced the cost of our U.S.-denominated debt in Mexican pesos terms. The next slide, please. The CapEx for the first 9 months of the year totaled MXN 3.8 billion. Of this total, 77% was allocated to store development initiatives, including the opening of 35 new corporate units, the renovation and remodeling of existing locations and equipment replacement across the brands.

The remaining 23% was directed at the strategic projects such as the distribution center in Guadalajara, technological upgrades, process improvements and software licenses, all reinforcing the long-term competitiveness and operational efficiency. At the end of the third quarter, the pre-IFRS 16 [Foreign Language] thank you. The pre-IFRS 16 gross debt decreased by MXN 1.8 billion year-over-year, reaching MXN 51.8 billion. The company's net debt, not counting the impact of IFRS 16 was MXN 34.5 billion, which is MXN 2.5 billion more than it was at the same time last year.

This increase reflects the bank loans used to settle the minority stake in the European operations, short-term debt for working capital and CapEx needs. Consolidated net debt reached MXN 47.1 billion, including lease liabilities. At the end of the quarter, 74% of the debt was long term with 67% denominated in Mexican pesos and 33% in euros. We remain focused on maintaining a healthy capital structure supported by prudent financial management. At the end of the quarter, the cash position stood at MXN 4.7 billion. Turning to financial ratios.

The total debt to post-IFRS 16 EBITDA ratio closed the quarter at 2.9x, while the net debt-to-EBITDA ratio stood at 2.6x. While we are still committed, we have adjusted the 2025 guidance given the negative impact generated by a lower-than-expected consumption dynamics during the month of September and the ongoing impact of the appreciation of the Mexican peso affecting the top line. Now we expect a high single-digit top line growth and a low single-digit EBITDA growth for the year.

I will now pass you over to the operator for the Q&A session. Thank you very much.

[Operator Instructions] The first question is from Mr. Ben Theurer from Barclays.

So 2 ones real quick, just following up on some of the commentary you had about the softness towards the end of the quarter in September and obviously, the guidance adjustment as you look now for slightly lower top line. If you think about the weakness, how has that potentially carried into the fourth quarter in October? And are you seeing any difference between the formats? So thinking coffee versus pizza versus burger versus food service across the board? Are there certain areas that are a little more affected versus others? So just a little more granularity as to the weakness in September, maybe over the last couple of weeks to understand what's driving the guidance revision.

Thank you for your question. No, the reality is that, as we mentioned, the third quarter was -- we saw July and August pretty balanced. And then we have an important drop in September. And this was across, in general, brands and geographies. It's not specific to a particular brand. Obviously, as we mentioned in the report, some of the South American countries, we have a slower -- a higher impact in those countries due to the deceleration of consumption. But in general, was across all geographies and markets. And as you asked going into Q4, it's too early.

It's been 2 weeks in October. We see a similar trend in October. Nevertheless, we have very strong commercial initiatives in all of our brands and across all of our geographies for Q4, focusing on mainly 3 particular aspects. One is product and customer experience innovation. The second one, value. We can share some examples of some of the initiatives that have been paying off across the year regarding value like Tres para mi in Chili's in Mexico, Paradiso Italiano with Italiannis in Mexico, not just Magic Magicas or Magical Nights in Ginos in Spain and Gourmet Burgers in Fosters and many of the day in some of our brands. which have been continued driving traffic and that.

Nevertheless, for Q4, we have very, very strong and powerful innovative and customer experience-driven campaigns that we are confident that will help us drive the traffic during this quarter. But something very important to highlight is always protecting this gross margin while we preserve traffic. We know that during these times of lower consumption or slowdown, the brands that remain loyal to their customers are recognized when traffic comes back. So that's what we are focusing on.

Perfect. And then my second question is you mentioned potential asset disposal. Could you just elaborate, is that more like regions you think of not being worth maintaining? Or is it brands in particular? I mean we've seen, for example, the Burger King transaction in Spain. So is that something maybe in other regions to follow? How should we think about this?

We have been very vocal, Ben, regarding divesting processes that we are setting in different noncore units. I would say that is one of the main priorities, not only for this year, but for the future. And we're still dealing with more than -- for potential buyers for different business units.

It is not going to be relevant in terms of the contribution to the top line or to the EBITDA -- but obviously, what we want to address us to all the investors community is the focus that we want to deliver to the main brands such as Starbucks, Domino's Pizza, et cetera. We are still moving forward. Sorry, we cannot elaborate on rumors. But once we have said and we have completed this M&A activity, we'll give you more news.

Our next question is from Mr. Thiago Bortoluci from Goldman Sachs.

I'd like to understand a little bit more the add up of the revised guidance, right? And this is on top of one very particular moving part that is FX. You cut revenue and EBITDA similarly, which could suggest as your broad expectations for margins are virtually unchanged. Obviously, we know that the stronger currency, the translation from Europe is a headwind, but gross margin could actually benefit from that going forward, right? So this is just to see if you could elaborate a little bit more on how you're seeing FX translation versus transaction FX, how your hedging positions are, how you're thinking about pricing and cost and more importantly, what is your underlying assumptions for margins going forward?

Thank you, Thiago. I will answer the first part of the question regarding the cutoff of the guidance in top line and in EBITDA growth. Obviously, we are losing operating leverage and even what we have -- and we are having some help in terms of EBITDA margin from Europe because of the appreciation of the peso in comparison with the euro. We are losing some kind of operating leverage in Mexico, too. We had a really weird quarter. We have a good July and a strange August with one strongest week and a terrible September. So that's the reason that we are cutting up all the guidance for the rest of the year.

And I would say it is only operating leverage. We are having tailwinds from the FX. You know that we delivered a guidance with a forecast of MXN 20.8 per dollar, we're having a good gross margin. And in fact, you will see a lower-than-expected loss of margin EBITDA. But having said this, obviously, we have to bring you the reality of what we saw in the quarter. And as Christian have just mentioned, with 3 quarters out of the 13 weeks of the last quarter, it is pretty early to say what is going to happen. That's the reason of the [indiscernible] of the guidance. So if you want to complement?

Yes. And also regarding gross margin, we have seen positive tailwinds regarding COGS. As you know, there was a lot of pressure on cost of goods, particularly with some commodities based on the FX -- now we are seeing that both the internal initiatives that we shared some of them last quarter are starting to pay off. There's normally 3 to 5 months of time when you start seeing the different initiatives to pay off.

We are seeing that. And also, on the other hand, the initiatives that we had implemented and consolidated around productivity and labor, we have seen them to start to pay off. So in these terms, we are seeing a steady -- slow but steady margin recovery in our brands through these initiatives and still have had some increments on beef, but we are -- again, it's part of our business, we are managing every year as they come and through different platforms.

This is helpful. And if I may, a quick follow-up. We have been discussing on our opening remarks and now the drag in September, right? Anything you could share to help us calibrate the magnitude of the pressure that you saw particularly in that month?

We do not disclose the transactions by brand, but obviously, there are some brands where we had a contraction of around 100 basis points in terms of the same-store sales in comparison with the previous 2 months. And that's the reason. As I said before, Thiago, it was only 1 month. Unfortunately, when we take a look at the guidance, we prefer to be really honest of what we're looking for the remaining part of the year. You know the seasonality of this business in November and December, maybe we'll have a positive news. But as of today, I cannot say that. Sorry.

Our next question is from Mr. Alejandro Fuchs from Itau BBA. Our next question is from Antonio Hernandez from Actinver.

Just I mean, very good color that you provided regarding the different performance in the 3 months. Just wanted to see if you could provide more color on September. If there were -- how much of that underperformance was because of external factors, maybe competition or anything specifically that you could provide on that, that will be very helpful.

I would say it's really macroeconomical factors, Antonio. I cannot say that we are dealing with something different from a cost of food point of view or something internal. I would say that we are delivering the same campaigns. Obviously, most of the value coming from traffic. We have been telling you these guys. We are not doing a 100% pass-through coming from ticket. We have positive tailwinds regarding FX. Obviously, we have 30% of the food basket dollar index. And I would say that everything is not from competitors. We know that the competitors are slowing down the pace of openings, especially in coffee and pizza. But having said this, we are not dealing with something different from a commercial point of view. Do you want to add.

To avoid being repetitive, it's more -- we have seen, in general, a deceleration on consumption, particularly after the end of the summer, which had the highest peak in September. We know that normally every September slows down. Nevertheless, this was a little bit more -- the peak or the value was higher. So again, this has to do more to a macroeconomic environment. And in general, we see less thrust on the consumers in certain geographies as Europe, certain economy slowdown in South America and likewise in Mexico.

But we are expecting to have, as you know, most of our -- almost 30% of our revenue EBITDA comes on the last of the quarter. So we are, as I mentioned, with strong campaigns and strong value-driven and innovation campaigns for Q4 in all of our brands and geographies.

And just to clarify that terrible September or bad performance in September is all over the place. I mean, not only in one specific geography?

Yes, it was in the 3 regions.

Our next question is from Ms. Renata Cabral from Citi.

You opened your camera?

Yes, I did.

No worry. Go forward with your question, Renata.

Sorry for the problem with the connection. My question is regarding Europe and the improvement that we are seeing there. 2024, we know that it was a challenging year in terms of same-store sales, and we are seeing now a stabilization in the region contributing to the company's results. So my question is, what were the main changes that you have implemented to reach to the current results and still the opportunities that you see to further improve the results on Europe.

Thank you for your question. Let me take this one. I believe what we have seen in terms of the recovery that you mentioned, particularly driven by Spain. We've seen very -- the customer reacting to the different campaigns in terms of innovation and value-driven campaigns as well as improved portfolios in terms of core offering like our brands in Starbucks, value-driven initiatives in Vips and Ginos, new very innovative campaigns around chicken and burgers in terms of -- in the case of Foster's Hollywood and particularly Domino's also the first half of the year, they were very much driven in having more, let's say, less traffic-driven and promotional activity which brought us good margins. And now we -- second half for Domino's will be more driven on achieving traffic, obviously, protecting the margin.

So I would say to make the answer short, is the consolidation and the understanding and reading of the environment and looking forward of how the customer is behaving that we were able to adjust and adapt our different initiatives to respond to the customer needs. For Q4 and looking forward, as I mentioned before, innovation is going to be one of our main drivers. And likewise, as protecting value and margin for the customer -- value driven -- to protect value for the customer to drive traffic, but at the same time, in a smart way to protect our margins. So I believe understanding what is the behavior and what the customer is looking for is what's been paying off particularly driven by Spain.

Additionally, Renata, in the bottom part of the P&L, we are implementing a lot of different strategies. In the stores, for example, we are increasing the productivity, trying to measure what are the peak hours of the day to have a better deployment of the workforce, and we are having terrific results. Additionally, in all the headquarter offices, obviously, we are stopping with doing non-core activities. We have been growing really -- we had a relevant growth during the last 10 years in Alsea.

So we are going back to basis to consolidate synergies, moving different areas to where we are performing the best tasks. So we are having a lot of efficiencies in the bottom. But obviously, when we are losing the leverage as we have seen in September, it is impossible to offset only with these efficiencies, the loss of sales.

And to complement this last that you mentioned, Renata, also, we have seen this, let's say, approach where we consolidate the brands and when we are capturing opportunities like in the FSR segment where we are creating and generating a lot of synergies, it's paying off. So in a way, the strategy that we started at the beginning of the year in these terms is maturing, and we are already seeing part of the benefits of this strategy.

Our next question is from Mr. Ulises Argote from Santander.

I just wanted to understand a little bit better here on the pace of remodeling. Is this something we can expect going forward for the next couple of years? Or what's more or less the time line that you guys have in mind for this? And also to understand if this is focused on any specific format or region or if it's more across the board. Then a follow-up to that is if you guys have any color that you can share maybe on the sales lift that you're seeing on these remodeled stores.

Yes, I will take that one. Yes, as I mentioned in our first call, one of our main priorities is how do we make our existing portfolio more profitable. through driving same-store sales and basically driven by traffic. And remodeling is clearly a very strategic lever that allows us to drive this additional traffic, both one way through having better-looking stores, but also more efficient stores. When you have a remodel a store that has been operating for 5, 7, 10 years, you already know how the store behaves, what type of customers you get in those stores.

So when we do these types of renovations or remodelings, we are just adapt to the reality of each one of the stores and the needs of each one of the stores. So as we mentioned in the first -- in our last call, we are in an average of 2: 1, 2 remodelings or renovations for each opening. That shifts between different brands, some brands or some geographies, we are 3:1. In some cases, we are 1:1. But clearly, the renovation of our existing portfolio is one of the key drivers of traffic together with having the best operational talent in each one of our stores, which is also one of our key strategies where we are focusing.

Regarding payoff, where we have seen the highest impact in terms of payoff is in the FSR or casual dining segment and in Starbucks because obviously, different from Domino's or the customer doesn't necessarily stay in the store for a long period of time. In the case of Starbucks and our food service restaurant segment in both geographies, we clearly see that the customer really appreciates these types of renovation. So we've seen between mid- to high single-digit growth in some of the segments and to double -- I would say double. Low teens in the case of FSR. So it's a core -- it's part of now a clear strategy for us and a clear priority.

Our next question is from Ms. Isabella Lamas from UBS.

I have 2 here. So firstly, could you discuss a little bit more about the input costs, particularly in the scenario of the peso appreciation. We were kind of wanted to get a sense of how you're thinking about your cost inflation going forward and how that compares to what you have experienced for this year? And how should we think about the margin setup for next year? And my second one is a quick one, is regarding leverage ratio. You've just reiterated your guidance for this year. So we were wondering if you have any views you could share for next year, any kind of range or what should be aiming for? That's it.

Okay. Thank you, Isabella. Regarding the input costs, we are not having -- I'm talking only regarding Mexico and South America. We are not having more headwinds regarding FX. I would say that at this point of the year is totally comparable and in some cases, better than in 2024. That's from one side. As you know, we have 30% of the inputs dollar index in Mexico and the rest of South America brands. And additionally, for the next year, we are forecasting mid low single-digit input cost for 2026.

And regarding the guidance, we changed the guidance for 2025 from a low teens in top line to high single digit and regarding EBITDA growth from a mid-single digit to a low single digit. Regarding 2026, it is too early. We are building our budget with the different variables. So we'll tell you something in the next conference in the month of February.

Our next question is from Ms. Julia Rizzo from Morgan Stanley.

I have 3 actually. One, could you -- I noticed a sharp increase in the leasing expense on the cash flow from MXN 4.6 billion from MXN 3.6 billion, 26% increase actually, which is quite high compared to your sales and also to the store base. Is there anything here was a renegotiation in some regions, specific some brand? Is there something that is not perhaps recurring or it is related with some stores that you're already opening under construction and paying but not open. Can you give me a little bit of sense of how we should interpret this, especially looking forward, right? Because it increases from 6.3% of sales to 7.4% of sales in 1 year.

Okay, Julia. Yes, Julia. We have been very vocal from December on regarding the lease change that we do from a post-IFRS 16 perspective. As you know, we manage the business on pre-IFRS 16 figures and -- but the change was because we standardized the criteria of all the leasing contracts across the geographies to have a single one company-wide. For example, we had a different policy in Europe from a bps perspective, that bps here in Mexico, while it's the same business, et cetera.

So it is more an accounting perspective than a real change on the lease payment that we do on a monthly basis. This does not imply -- and just to be repetitive, an increase in the rental expense, but in the way that we account these leases. This is an effect we'll have until the last quarter of 2025. And from the first quarter of 2026, it is not going to be a relevant change. I don't know if you had another question, Julia.

Yes. Just as a follow-up. I'm not talking about the depreciation and amortization. I'm talking about the cash flow payment on the free cash flow generation.

No changes. From a free cash flow payment, it is pretty much the same. We have around 35% of the lease contracts on a variable base totally linked to the gross revenues and the remaining 65%, 70%, depending on the region is totally fixed and increased with half of the inflation of each one of the countries. So we do not have a relevant change from a cash flow perspective into the lease part.

Okay. So we follow up later. And also on the interest expenses, also when we annualize the rate of how much you paid, again, on a cash basis, the MXN 2.9 billion was MXN 3 billion compared to the average net debt of the period. We have kind of a rate around 14% roughly, which is well above the base rate. Is there anything here that is nonrecurring? Again, looking forward, how we should expect the cost of that or interest expenses to be?

Well, unfortunately, it was like that because even while we had -- well, we have the $500 million bonds at 7.750%, it is swap. So we pay a rate above 13% from the dollar bonds. And that's the reason, and I want to link to what are we doing with the LT with the liabilities management for 2026. We are moving forward accordingly to the plan. We are almost ending with the refinancing of the 100% of the liabilities, the financial liabilities in the balance sheet, and we'll have savings above $20 million for 2026. We're still dealing with it. That's the reason I do not want to give you more details, but we will change from bonds in dollars and in euros to bank debt, which is cheaper and that will improve the average duration that we have into the balance sheet. But you will see savings on the 2026.

Fantastic. Last one would be on the remodeling, the focus -- the increased focus of the company on the remodeling. Can you -- is there any specific brand or region that are you going to allocate resources more or less? And can you give me a rough sense of how much it costs a remodeling Starbucks versus one opening? Just we can make some calculations here of how that would be.

Regarding the cost, it's around 1/3 of the cost of a new opening and regarding the regions and the.

Yes. Regarding the regions and the brands, as I was sharing before, Julia, we are -- the brands where we see that are -- that react most -- the best when we do a remodeling are Starbucks and all the FSR segment. So we also do remodelings in some of the other brands, but we are focusing mainly on the brands where we have the best reaction from our customers in terms of traffic, which are the casual dining segment and Starbucks.

Regarding the geographies, it's a strategic approach. It depends on the aging of the portfolio in some cases, depends on the -- if there is a particular region, area, city where we see that we have an opportunity to drive additional traffic. And I can tell you that -- or in the case where we see some additional competition coming in. So there is a different -- a very strategic approach to this. And as I mentioned before, we are privileging remodeling our openings with a much more focused and disciplined growth.

So it's mostly Starbucks and casual dining. Region, you don't have a specific targeted.

It's in general, obviously, where we have a higher number of store or a bigger portfolio like we do in Mexico with more than 900 Starbucks stores, you will see a bigger number of renovations, likewise, with the FSR or casual dining segment in Mexico and Spain, where we have also an important portfolio there. So that depends more on the size of your existing portfolio. But this is a very -- it's a high priority for us and with a good ROI every time we do, as Federico was saying, it's 1/3 of what we do in a new store and the ROI is very, very good.

Our next question is from Mr. Bruno Ramirez from JPMorgan.

So question would be regarding full-service restaurants. How sustainable is to keep seeing this performance as it has been in the past quarters? And second question would be about the run rate for CapEx levels.

I will go with the second one regarding the CapEx. This year, we will be spending around MXN 6 billion, MXN 6.1 billion for CapEx. We are turning things into the company. So only we have non-[indiscernible] projects. As you know, we have recently opened the facility of the distribution center in Guadalajara. It was on Tuesday, and we'll have a lot of profitability and diversification to all the different routes. So for 2026, I think that the guidance, as I said before, it is too early, but should be in the range of MXN 5.5 billion, at least for 2026. And the openings should be a similar figure to what we have seen during 2025 of around 200 openings, taking into consideration not only corporate stores, but franchisees and sub franchisees too.

Yes, I'm taking this one. As you have seen in the past, I would say, 24 months, we have seen a very steady growth in the performance of our FSR segment, both in Spain and Mexico. We continue delivering with a lot of innovation and very disciplined and focused growth on each one of the brands, both our own brands like we do in Europe and with our franchisors from the other brands in our portfolio, where we are working -- we have seen clearly brands like Chili's doing an extraordinary -- with an extraordinary performance in the U.S. So we learn a lot from that.

We continue holding hands with our franchisors and seeing how this is really being executed and transferred with some value-driven initiatives in Mexico, likewise with the Cheesecake Factory. So I believe the preference of the consumer of our brands. And I would say the consistency that we have been able to deliver in the last years is clearly paying us and showing us that the customer wants to be in our stores and the quality of our products has continues to be a big differentiator.

We have not fallen into this attractive or sexy approach into trying to reduce costs through -- by reducing portions or things like that. We are clearly going the other way. We are very disciplined in maintaining our value-driven initiatives that have been there for more than 3 years now, and we keep refreshing them with innovation and new products.

So again, this is a segment that we are very happy with the performance. At the same time, we are very -- obviously, the investment in these types of stores or restaurants is an important investment. So we are always very cautious and careful on going for the no-brainer and locations that we know we're going to do well. And as I said before, Bruno we still have an important number of stores to renovate, and we know that this is going to drive and continue driving additional traffic.

And also in some cases, growing through our franchisees is a very important part of our strategy. Our franchisees are very happy and confident with the performance of this brand. So we continue getting demands on trying to continue developing the brand through franchisees, particularly in Europe and in some of our brands in Mexico.

And just a follow-up question in the -- regarding CapEx. So beyond 2026, what percentage of sales should we expect? Is 2026 levels a good proxy between 2026?

I would say it should be around 1.5% as a perpetuity rate, the CapEx. But it is better to have the guidance, and I will deliver both answers what to model in 2026 and what is happening in the next 10 years.

Our next question is from Mr. Nicolas Riva from Bank of America. Our next question is from Thiago Bortoluci from Goldman Sachs.

I don't know, but I think I'm double counted here. No further questions on my end.

That was the last question. I will now hand over to Mr. Christian Gurría for final comments.

First of all, I want to thank everyone for being here today and the interest and for your questions. Thank you very much. Before we conclude, we would like to thank you for your participation and interest in our quarterly conference call. If you have any additional questions or require further information, our Investor Relations team is always available to assist you. We wish you an excellent day and look forward to having you join us for our next quarterly update and the best holidays and the best holiday season and best wishes for you for this last quarter. Thank you, everyone. Thank you.

Alsea would like to thank you for participating in today's video conference. You may now disconnect.