Background on El Puerto de Liverpool
El Puerto de Liverpool is a well-known Mexican department store chain, operating under the brand name “Liverpool.” The company is a significant player in Mexico’s retail sector, with numerous stores across the country. Its relevance stems from its extensive reach and influence on consumer trends in Mexico.
Stock Performance and Reasons for the Drop
On Tuesday, El Puerto de Liverpool’s stocks fell by 3.17% on the Bolsa Mexicana de Valores (BMV). This decline came after the company reported a decrease in its net income for the second quarter.
The stocks were trading at 93.83 pesos each, but earlier in the day, they dipped nearly 9%, marking the worst performance among companies included in the S&P/BMV IPC index on the BMV.
Banorte, in an analysis note, stated, “Despite the resilience in sales growth, operating performance took a significant hit due to increased expenses.” Following this report, Banorte lowered its target price for Liverpool’s stock from 155 pesos to 120 pesos.
Financial Performance in Q2
- Net Income: Liverpool’s net income decreased by 47% year-over-year, despite an 8% growth in revenue during the period.
- Operating Cash Flow: The operating cash flow declined by 7.1% in Q2 compared to the same period in 2024.
- Same-Store Sales: Liverpool’s same-store sales increased by 4.7%, while Suburbia (another brand under Liverpool) saw an 8.2% growth in sales.
- Digital Presence: Liverpool’s digital participation grew by 436 basis points, reaching 33.3%. Suburbia’s sales participation increased by 193 basis points, reaching 8.6%.
Expert Opinion and Future Outlook
Banorte’s analysts noted that the challenges faced by Liverpool have been greater than initially anticipated and are expected to persist throughout the second half of the year.
Key Questions and Answers
- Q: Who is El Puerto de Liverpool? A: El Puerto de Liverpool is a prominent Mexican department store chain operating under the brand name “Liverpool.”
- Q: Why did Liverpool’s stocks fall on the BMV? A: Liverpool’s stocks fell due to a reported decrease in net income for the second quarter, coupled with increased operating expenses.
- Q: What were the financial results for Q2? A: Net income decreased by 47% year-over-year, while operating cash flow declined by 7.1%. Same-store sales increased by 4.7% for Liverpool and 8.2% for Suburbia.
- Q: What is the outlook for Liverpool according to Banorte? A: Banorte’s analysts believe that the challenges faced by Liverpool will continue throughout the second half of the year.
