Esteemed Chairman and Members of the Board of Directors:
In my role as CEO of Grupo Palacio de Hierro, SAB de CV, I submit for your consideration this Annual Report detailing our performance and results during the 2024 fiscal year, in addition to the Financial Statements and accounting and data criteria and policies used to draft this report.
At Grupo Palacio de Hierro, our Purpose lies in “enriching and satisfying people through unique luxury experiences”. We firmly believe that our customers value this commitment, and we work every day to honor this special relationship.
Esteemed Chairman and Members of the Board of Directors:
In my role as CEO of Grupo Palacio de Hierro, SAB de CV, I submit for your consideration this Annual Report detailing our performance and results during the 2024 fiscal year, in addition to the Financial Statements and accounting and data criteria and policies used to draft this report.
At Grupo Palacio de Hierro, our Purpose lies in “enriching and satisfying people through unique luxury experiences”. We firmly believe that our customers value this commitment, and we work every day to honor this special relationship.
That is why we continue to evolve and raise our standards. We have also continued bolstering our organizational culture, processes, and methodologies to exceed the expectations of our customers, employees, partners, and shareholders —ensuring we always act responsibly and take into consideration the social and environmental impact of our work.
Despite the complexities of 2024, the Mexican economy recorded growth of 1.3%, with slowing an inflation rate of 4.2% and an exchange rate that was under pressure during the second half of the year. Based on data from the Asociación Nacional de Tiendas de Autoservicio y Departamentales (ANTAD), within the department store segment, real growth in terms of same-store sales grew by 4.6% and total store sales by 6.0%, compared to 2023.
That is why we continue to evolve and raise our standards. We have also continued bolstering our organizational culture, processes, and methodologies to exceed the expectations of our customers, employees, partners, and shareholders —ensuring we always act responsibly and take into consideration the social and environmental impact of our work.
Despite the complexities of 2024, the Mexican economy recorded growth of 1.3%, with slowing an inflation rate of 4.2% and an exchange rate that was under pressure during the second half of the year. Based on data from the Asociación Nacional de Tiendas de Autoservicio y Departamentales (ANTAD), within the department store segment, real growth in terms of same-store sales grew by 4.6% and total store sales by 6.0%, compared to 2023.
Through its focus on driving long-term value creation, the Company's total revenue reached MXN $56.080 billion in 2024, a year-on-year increase of 11.1%, Over the past four years, we have sustained double-digit growth thanks to excellent execution, improvements to gross margin, and a strategic focus on controlling operating expenses. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) increased by 17.2% over the past year, reaching MXN $7.937 billion. Net income earnings reached MXN $2.988 billion in 2024, a 22.7% increase in a year-on-year comparison.
Through its focus on driving long-term value creation, the Company's total revenue reached MXN $56.080 billion in 2024, a year-on-year increase of 11.1%, Over the past four years, we have sustained double-digit growth thanks to excellent execution, improvements to gross margin, and a strategic focus on controlling operating expenses. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) increased by 17.2% over the past year, reaching MXN $7.937 billion. Net income earnings reached MXN $2.988 billion in 2024, a 22.7% increase in a year-on-year comparison.
Such positive results confirm that we have chosen the right innovations to roll out, and we are continuing to integrate our omnichannel strategy through physical stores, ensuring that bothexperiences are seamlessly connected. We are also strengthening business support processes to underpin the company's expansion and future growth through advanced technological systems with enhanced data analysis and hyper-personalization capabilities, the introduction of artificial intelligence in certain processes, and the expansion of our logistics and distribution network.
Below are some of the most relevant operational milestones reached by Grupo Palacio de Hierro during the 2024 fiscal year.
Such positive results confirm that we have chosen the right innovations to roll out, and we are continuing to integrate our omnichannel strategy through physical stores, ensuring that bothexperiences are seamlessly connected. We are also strengthening business support processes to underpin the company's expansion and future growth through advanced technological systems with enhanced data analysis and hyper-personalization capabilities, the introduction of artificial intelligence in certain processes, and the expansion of our logistics and distribution network.
Below are some of the most relevant operational milestones reached by Grupo Palacio de Hierro during the 2024 fiscal year.
TRANSFORMATION
The on-going evolution of our business model is part of our transformation process, which is strategically aligned with our 4D Strategy: Digitalization, Differentiation, Diversification and Design
The omnichannel approach has enabled seamless integration through technological advancements, linking physical stores with digital platforms to deliver high-quality experiences to our customers. Furthermore, through our digital innovation measures, the company has achieved greater flexibility and a faster response to changes in customer behavior
THE FUTURE IS PALACIO.
Among the year's key achievements is the consolidation of our Super App, which has been designed to enhance customer experience and consolidate our competitive position in the digital landscape. This platform has become a cornerstone of the company's technological transformation.
The implementation of the new point-of-sale system, launched in 2024, has helped streamline processes, enable data-driven decision-making, and provide an even more memorable experience for our customers.
TRANSFORMATION
The on-going evolution of our business model is part of our transformation process, which is strategically aligned with our 4D Strategy: Digitalization, Differentiation, Diversification and Design
The omnichannel approach has enabled seamless integration through technological advancements, linking physical stores with digital platforms to deliver high-quality experiences to our customers. Furthermore, through our digital innovation measures, the company has achieved greater flexibility and a faster response to changes in customer behavior
THE FUTURE IS PALACIO.
Among the year's key achievements is the consolidation of our Super App, which has been designed to enhance customer experience and consolidate our competitive position in the digital landscape. This platform has become a cornerstone of the company's technological transformation.
The implementation of the new point-of-sale system, launched in 2024, has helped streamline processes, enable data-driven decision-making, and provide an even more memorable experience for our customers.
STORE OPERATIONS
During 2024, we rolled out a new model to provide a unique service experience during every visit, while also enhancing tools and process resources to boost productivity.
Moreover, the scope of our Extended Catalog was expanded in alignment with our omnichannel vision, significantly improving operational indicators. The implementation of artificial intelligence better enabled identification and optimization of merchandise movement.
STORE OPERATIONS
During 2024, we rolled out a new model to provide a unique service experience during every visit, while also enhancing tools and process resources to boost productivity.
Moreover, the scope of our Extended Catalog was expanded in alignment with our omnichannel vision, significantly improving operational indicators. The implementation of artificial intelligence better enabled identification and optimization of merchandise movement.
REAL-ESTATE PROJECTS
In October 2024, El Palacio de Hierro opened its doors in León, unveiling a store that offers a truly unique experience. This new space pays tribute to the state of Guanajuato and its people, integrating architectural elements that reflect the region's history, traditions and industry, while seamlessly blending the sophistication, elegance and modernity that define El Palacio de Hierro.
El Palacio de Hierro León's design follows our community store concept, which aims to honor local residents and highlight the most distinctive features of the region.
The store features iconic details, such as an atrium that mimics a silver mine shaft, staircases designed to resemble silver ingots, and Callejón Palacio, inspired by the famous Callejón del Beso. The children's area takes inspiration from the colorful houses of San Miguel de Allende, while the Luxury World section presents architectural features that evokes the mining tunnels. Together, these elements create a space where luxury and modernity come together in perfect harmony
REAL-ESTATE PROJECTS
In October 2024, El Palacio de Hierro opened its doors in León, unveiling a store that offers a truly unique experience. This new space pays tribute to the state of Guanajuato and its people, integrating architectural elements that reflect the region's history, traditions and industry, while seamlessly blending the sophistication, elegance and modernity that define El Palacio de Hierro.
El Palacio de Hierro León's design follows our community store concept, which aims to honor local residents and highlight the most distinctive features of the region.
The store features iconic details, such as an atrium that mimics a silver mine shaft, staircases designed to resemble silver ingots, and Callejón Palacio, inspired by the famous Callejón del Beso. The children's area takes inspiration from the colorful houses of San Miguel de Allende, while the Luxury World section presents architectural features that evokes the mining tunnels. Together, these elements create a space where luxury and modernity come together in perfect harmony
SUSTAINABILITY AT EL PALACIO DE HIERRO
A significant part of our efforts has focused on advancing sustainability. As testament to this commitment, we have set ambitious goals across all areas to drive a more sustainable value chain and transition toward circular processes
This sustainability approach aims to balance the impact of our operations, both in current and future decisions, while responsibly and actively contributing through Environmental, Social and Governance (ESG) initiatives.
SUSTAINABILITY AT EL PALACIO DE HIERRO
A significant part of our efforts has focused on advancing sustainability. As testament to this commitment, we have set ambitious goals across all areas to drive a more sustainable value chain and transition toward circular processes
This sustainability approach aims to balance the impact of our operations, both in current and future decisions, while responsibly and actively contributing through Environmental, Social and Governance (ESG) initiatives.
Sustainability is a fundamental pillar of Grupo Palacio de Hierro's culture and is seamlessly integrated across all areas of our business operations. Accordingly, we comply with the highest international standards for measurement and reporting through our dedicated Sustainability platform.
This information is presented in greater detail in the Annual Sustainability Report, which is available on our website.
Sustainability is a fundamental pillar of Grupo Palacio de Hierro's culture and is seamlessly integrated across all areas of our business operations. Accordingly, we comply with the highest international standards for measurement and reporting through our dedicated Sustainability platform.
This information is presented in greater detail in the Annual Sustainability Report, which is available on our website.
EMPLOYEES
During 2024, we consolidated our commitment to human development, operational excellence and active wellness by bolstering our four cultural pillars:
Excellence: We strive for outstanding results in everything we do, with responsibility, quality, and attention to detail.
Style: We offer memorable experiences through our way of work. Our style is always delivering “how it's done”.
Warmth: We deploy a close and humane approach to ensure that every person feels appreciated for their uniqueness.
Joy of Life: We foster joy at every moment; our passion is to deliver positive energy from our brand to customers and staff.
EMPLOYEES
During 2024, we consolidated our commitment to human development, operational excellence and active wellness by bolstering our four cultural pillars:
Excellence: We strive for outstanding results in everything we do, with responsibility, quality, and attention to detail.
Style: We offer memorable experiences through our way of work. Our style is always delivering “how it's done”.
Warmth: We deploy a close and humane approach to ensure that every person feels appreciated for their uniqueness.
Joy of Life: We foster joy at every moment; our passion is to deliver positive energy from our brand to customers and staff.
Through our Talent Development and Training area, we created the Sales and Commercial Academies and expanded the Campus Palacio and Digital Academies models. More and more employees are participating in training programs focusing on service, regulations, product knowledge, and technical skills
To further bolster equal opportunities —a focus that has helped positioned us as an innovative, creative and equitable organization— we have rolled out initiatives across hiring, retention, and team development, as well as internal policies and organizational culture initiatives aimed at fostering inclusion. These efforts are focused on four priority groups:
Through our Talent Development and Training area, we created the Sales and Commercial Academies and expanded the Campus Palacio and Digital Academies models. More and more employees are participating in training programs focusing on service, regulations, product knowledge, and technical skills
To further bolster equal opportunities —a focus that has helped positioned us as an innovative, creative and equitable organization— we have rolled out initiatives across hiring, retention, and team development, as well as internal policies and organizational culture initiatives aimed at fostering inclusion. These efforts are focused on four priority groups:
El Palacio de Hierro also promoted employee wellness activities through health initiatives such as vaccination campaigns, psychological support, and telemedicine services, which were also extended to their families. Furthermore, recreational spaces were created to encourage sports and cultural activities.
In collaboration with the Alberto Baillères Foundation, we have benefitted children and young people from the Communities where our employees live and work by engaging, providing support, and improving educational infrastructure. We have also offered workshops within all our business units focusing on preventing, addressing and eradicating workplace harassment and violence.
El Palacio de Hierro also promoted employee wellness activities through health initiatives such as vaccination campaigns, psychological support, and telemedicine services, which were also extended to their families. Furthermore, recreational spaces were created to encourage sports and cultural activities.
In collaboration with the Alberto Baillères Foundation, we have benefitted children and young people from the Communities where our employees live and work by engaging, providing support, and improving educational infrastructure. We have also offered workshops within all our business units focusing on preventing, addressing and eradicating workplace harassment and violence.
CUSTOMER EXPERIENCE
We have integrated customer contact before, during, and after purchasing across all our channels. By offering a response that is tailored to each customer's needs at the right time and in the right place, we can create a differentiated shopping experience.
In 2024, we rolled out strategies to provide unique luxury experiences, focusing on offering hyper-personalized experiences that strengthen our relationship with our customers
In 2024, the Mi Palacio App evolved into the Super App, offering multiple additional services, such as Tarjeta Palacio payment options, point balance checks, account status, and card activation/deactivation. These innovations have led to over 1.8 million users downloading the app.
Staying true to our priority of providing memorable experiences, in 2024 we coordinated the María y la Moda event, an exhibition featuring unique luxury pieces once owned by the iconic Mexican diva María Félix. The exhibition attracted over 50,000 visitors and had such an impact that it was featured in the renowned Spanish newspaper El País
CUSTOMER EXPERIENCE
We have integrated customer contact before, during, and after purchasing across all our channels. By offering a response that is tailored to each customer's needs at the right time and in the right place, we can create a differentiated shopping experience.
In 2024, we rolled out strategies to provide unique luxury experiences, focusing on offering hyper-personalized experiences that strengthen our relationship with our customers
In 2024, the Mi Palacio App evolved into the Super App, offering multiple additional services, such as Tarjeta Palacio payment options, point balance checks, account status, and card activation/deactivation. These innovations have led to over 1.8 million users downloading the app.
Staying true to our priority of providing memorable experiences, in 2024 we coordinated the María y la Moda event, an exhibition featuring unique luxury pieces once owned by the iconic Mexican diva María Félix. The exhibition attracted over 50,000 visitors and had such an impact that it was featured in the renowned Spanish newspaper El País
