GRUPO PALACIO DE HIERRO, S.A.B. DE C.V.
COMPANY PERFORMANCE REPORT PRESENTED TO THE SHAREHOLDERS' ASSEMBLY,
CORRESPONDING
TO THE 2025 FISCAL YEAR
Esteemed shareholders:
In my capacity as Chairman of the Board of Directors of Grupo Palacio de Hierro, S.A.B. de C.V., and on its behalf, I am pleased to present this Annual Report, which is based on the information provided by the CEO in her Annual Report on the Company's performance, the most relevant results, and the key highlights of fiscal year 2025. The report on the main activities carried out by the Board of Directors has also been taken into consideration.
During 2025, at Grupo Palacio de Hierro, we reaffirmed that teamwork is a fundamental pillar of our identity and the cornerstone of our sustained growth. Our purpose of enriching people through unique experiences has been key to addressing this year's challenges and capitalizing on its opportunities.
Esteemed shareholders:
In my capacity as Chairman of the Board of Directors of Grupo Palacio de Hierro, S.A.B. de C.V., and on its behalf, I am pleased to present this Annual Report, which is based on the information provided by the CEO in her Annual Report on the Company's performance, the most relevant results, and the key highlights of fiscal year 2025. The report on the main activities carried out by the Board of Directors has also been taken into consideration.
During 2025, at Grupo Palacio de Hierro, we reaffirmed that teamwork is a fundamental pillar of our identity and the cornerstone of our sustained growth. Our purpose of enriching people through unique experiences has been key to addressing this year's challenges and capitalizing on its opportunities.
The year 2025 was marked by a complex global environment, characterized by economic slowdown, geopolitical conflicts, and the rapid evolution of technological innovation. For Grupo Palacio de Hierro, this challenging landscape also represented fertile ground for innovation and growth. Our focus on collaborative work, continuous adaptation, and ongoing improvement has enabled us to turn this environment into opportunities that strengthen our position and long-term vision.
The year 2025 was marked by a complex global environment, characterized by economic slowdown, geopolitical conflicts, and the rapid evolution of technological innovation. For Grupo Palacio de Hierro, this challenging landscape also represented fertile ground for innovation and growth. Our focus on collaborative work, continuous adaptation, and ongoing improvement has enabled us to turn this environment into opportunities that strengthen our position and long-term vision.
Undoubtedly, 2025 was a challenging year for the Mexican economy: it recorded growth of 0.7%, a decline in inflation, which closed the period at 3.69%, and a strengthened exchange rate.
Nominal annual sales growth in the department store segment, as reported by the National Association of Tiendas de Servicios y Departamentales (ANTAD), was 4.8% on a same-store basis and 6.3% considering total stores, compared to 2024.
Undoubtedly, 2025 was a challenging year for the Mexican economy: it recorded growth of 0.7%, a decline in inflation, which closed the period at 3.69%, and a strengthened exchange rate.
Nominal annual sales growth in the department store segment, as reported by the National Association of Tiendas de Servicios y Departamentales (ANTAD), was 4.8% on a same-store basis and 6.3% considering total stores, compared to 2024.
As of year-end 2025, Grupo Palacio de Hierro's consolidated total revenues increased by 8.3% compared to 2024, reaching MXN 60.748 billion. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) margin increased by 7.4% versus 2024, totaling MXN 8.521 billion, while net income for the year amounted to MXN 3.029 billion, which represents a 1.4% increase compared to the last year.
Guided by the premise of continuing to consolidate our luxury ecosystem, at Grupo Palacio de Hierro we have continued transforming ourselves to further elevate our standards and strengthen our organizational culture, as well as our processes and methodologies. In this omnichannel era, we remain committed to exceeding the expectations of our customers, employees, partners, and shareholders.
Likewise, we made decisive progress on the strategic pillars that strengthen Grupo Palacio de Hierro as a Sustainable Palacio, in order to fulfill our purpose of “enriching and delighting people through unique luxury experiences,” while generating a positive social impact.
As of year-end 2025, Grupo Palacio de Hierro's consolidated total revenues increased by 8.3% compared to 2024, reaching MXN 60.748 billion. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) margin increased by 7.4% versus 2024, totaling MXN 8.521 billion, while net income for the year amounted to MXN 3.029 billion, which represents a 1.4% increase compared to the last year.
Guided by the premise of continuing to consolidate our luxury ecosystem, at Grupo Palacio de Hierro we have continued transforming ourselves to further elevate our standards and strengthen our organizational culture, as well as our processes and methodologies. In this omnichannel era, we remain committed to exceeding the expectations of our customers, employees, partners, and shareholders.
Likewise, we made decisive progress on the strategic pillars that strengthen Grupo Palacio de Hierro as a Sustainable Palacio, in order to fulfill our purpose of “enriching and delighting people through unique luxury experiences,” while generating a positive social impact.
In 2025, Grupo Palacio de Hierro carried out an important leadership transition following the retirement of Juan Carlos Escribano after a decade of significant achievements and sustained growth. In accordance with the Company's corporate governance practices, and after conducting a broad executive search and implementing a structured succession plan, Eléonore de Boysson was appointed Chief Executive Officer, effective June 2025. Her appointment reflects her strong international track record in the luxury retail and department store sectors, as well as her executive and leadership capabilities and her alignment with the Company's values, key elements in further strengthening Grupo Palacio de Hierro's position as an international benchmark in the luxury department store segment.
In 2025, Grupo Palacio de Hierro carried out an important leadership transition following the retirement of Juan Carlos Escribano after a decade of significant achievements and sustained growth. In accordance with the Company's corporate governance practices, and after conducting a broad executive search and implementing a structured succession plan, Eléonore de Boysson was appointed Chief Executive Officer, effective June 2025. Her appointment reflects her strong international track record in the luxury retail and department store sectors, as well as her executive and leadership capabilities and her alignment with the Company's values, key elements in further strengthening Grupo Palacio de Hierro's position as an international benchmark in the luxury department store segment.
The Board of Directors submits to the Shareholders' Meeting, for its consideration, the report detailing and explaining the accounting policies and criteria used as the basis for preparing the financial statements, including, among others, the basis of presentation, consolidation principles, significant accounting policies, and new accounting pronouncements. These were audited by the external auditors and form an integral part of this Report.
The Board of Directors submits to the Shareholders' Meeting, for its consideration, the report detailing and explaining the accounting policies and criteria used as the basis for preparing the financial statements, including, among others, the basis of presentation, consolidation principles, significant accounting policies, and new accounting pronouncements. These were audited by the external auditors and form an integral part of this Report.
In the opinion of the Board of Directors, the Chief Executive Officer's report presented to the Shareholders' Meeting appropriately and reasonably reflects the Company's financial position, the results achieved, and the most significant aspects of business performance during fiscal year 2025.
The Board of Directors adheres to solid corporate governance practices and, in the performance of its duties, is supported by committees recommended in the Code of Corporate Governance Principles and Best Practices.
In the opinion of the Board of Directors, the Chief Executive Officer's report presented to the Shareholders' Meeting appropriately and reasonably reflects the Company's financial position, the results achieved, and the most significant aspects of business performance during fiscal year 2025.
The Board of Directors adheres to solid corporate governance practices and, in the performance of its duties, is supported by committees recommended in the Code of Corporate Governance Principles and Best Practices.
During fiscal year 2025, the Board met on four occasions. Key matters discussed and approved at these meetings included the strengthening of labor and environmental management programs; review and ratification of the Executive Committee's resolutions; corporate strategy; monitoring of strategic initiatives; the debt program; as well as the Company's investments and budgets. In addition, the interim financial statements presented during the year were reviewed and approved.
The most relevant activities of the committees, whose members are listed in the corporate governance section of the Annual Report, are summarized below:
Executive Committee. Reviewed budgets and the operational and financial performance of Grupo Palacio de Hierro's businesses, as well as the commercial and digital strategy; validated the foundations of the Strategic Plan and monitored its progress.
Audit and Corporate Practices Committee. Reviewed operational and financial results, performance, internal and external audit plans, as well as those of the Compliance function. It also assessed the status of the Company's internal controls, evaluated external audit services, and confirmed compliance with regulatory requirements. In addition, it reviewed accounting policies, related-party transactions, and the most relevant legal and tax matters.
During fiscal year 2025, the Board met on four occasions. Key matters discussed and approved at these meetings included the strengthening of labor and environmental management programs; review and ratification of the Executive Committee's resolutions; corporate strategy; monitoring of strategic initiatives; the debt program; as well as the Company's investments and budgets. In addition, the interim financial statements presented during the year were reviewed and approved.
The most relevant activities of the committees, whose members are listed in the corporate governance section of the Annual Report, are summarized below:
Executive Committee. Reviewed budgets and the operational and financial performance of Grupo Palacio de Hierro's businesses, as well as the commercial and digital strategy; validated the foundations of the Strategic Plan and monitored its progress.
Audit and Corporate Practices Committee. Reviewed operational and financial results, performance, internal and external audit plans, as well as those of the Compliance function. It also assessed the status of the Company's internal controls, evaluated external audit services, and confirmed compliance with regulatory requirements. In addition, it reviewed accounting policies, related-party transactions, and the most relevant legal and tax matters.
Finance and Planning Committee. Reviewed monthly closings and financial projections, the Company's evaluation of investment projects, and the financial position and structure of the Company.
Nominations, Evaluation and Compensation Committee. Conducted the annual performance evaluation of senior executives and authorized salary and benefits increases, as well as bonuses and recognition based on achieved results.
Finance and Planning Committee. Reviewed monthly closings and financial projections, the Company's evaluation of investment projects, and the financial position and structure of the Company.
Nominations, Evaluation and Compensation Committee. Conducted the annual performance evaluation of senior executives and authorized salary and benefits increases, as well as bonuses and recognition based on achieved results.
During 2025, Grupo Palacio de Hierro's financial performance evolved positively, outperforming the department store sector, allowing us to continue advancing our growth and expansion plans.
During 2025, Grupo Palacio de Hierro's financial performance evolved positively, outperforming the department store sector, allowing us to continue advancing our growth and expansion plans.
Esteemed shareholders:
I would like to thank all our employees for their dedication and performance; the Board of Directors, the Executive Committee, and the other Board Committees for their ideas and contributions to the business; and you, our shareholders, for the trust that enables us to continue on this path of unwavering dedication and commitment. Undoubtedly, this Company continues to represent who we are and who we will continue to be: Totalmente Palacio.
Alejandro Baillères
Chairman of the Board of Directors
Grupo Palacio
de Hierro, S.A.B. de C.V.
Esteemed shareholders:
I would like to thank all our employees for their dedication and performance; the Board of Directors, the Executive Committee, and the other Board Committees for their ideas and contributions to the business; and you, our shareholders, for the trust that enables us to continue on this path of unwavering dedication and commitment. Undoubtedly, this Company continues to represent who we are and who we will continue to be: Totalmente Palacio.
Alejandro Baillères
Chairman of the Board of Directors
Grupo Palacio
de Hierro, S.A.B. de C.V.
