Fomento Economico Mexicano S.A.B. de C.V.

Hello and welcome to the FENSA second quarter 2026 conference call. My name is Malu and I'll be your moderator for today's event. Please note that this conference is being recorded. For the duration of the call, all participants will be in listen-only mode. You will have the opportunity to ask questions at the end of the presentation. To do so, please use the raise hand feature in the Zoom and we will open the line. If you experience any technical issues during the call, please use the chat function to request assistance. I would now like to hand the call over to Mr. Juan Fonseca, Investor Relations Director at FEMSA. Please go ahead.

Good morning, everyone. Welcome to FEMSA's second quarter 2026 results conference call. Today, we are joined by Jose Antonio Fernandez Garza, FEMSA's CEO, Martin Arias, our CFO, Pamela Ortiz, who is now heading the investor relations team at Coca-Cola FEMSA, and Enrique Manero, who, as many of you know, has rejoined us to replace Pamela on our investor relations team. The plan is for Jose Antonio to open the conversation with some high level comments on the quarter's performance and trends, followed by Martin who will provide more granular details on the results. Finally, we will open the call for your questions. Jose Antonio, please go ahead.

Thank you, Juan. Good morning, everyone. I would like to use my time this morning to give you a strategic update, focusing on some of the main components of our portfolio and the strategic pillars that we believe are most relevant in our effort to create value and shape the future of the company. Let me begin with OXXO Mexico, which delivered a strong second quarter. Martin will elaborate on each line of the income statement in a few minutes. But I want to highlight the same-store sales performance that came very close to the double digits. It was particularly encouraging to see traffic growing at 2%, the first positive number in eight quarters. To be sure, part of this performance was explained by the uplift from the World Cup, and we faced an on-demanding comparison base. But this growth also reflected the strategic adjustments we started to make during the second half of last year. We estimate that at least 60% of this uplift was attributable to the World Cup, evenly split between the Panini collectibles and consumption tied mainly to the four Mexico games played in June. However, the improved performance, as we have discussed in previous calls, reflects that we have invested significant time and energy designing, testing, and deploying strategic adjustments across our store base. And beyond the temporary boost from the World Cup, we are seeing signs that the changes we began to roll out last year are taking hold. The core purpose of this effort is to become more consumer-centric at Oxxo. Over time, we have successfully developed our commercial levers, but sometimes this has come at the expense of customer centricity, focusing on expanding our margins, but steering us away from our customers and making us less competitive in certain key categories. We are embracing the strategic imperative to put our customers back at the center, and already we're starting to see that it translates into better performance and market share gains. Ultimately, we expect this renewed customer centricity to translate into stronger sustained traffic. The key is to find the right algorithm, the optimal balance of price and gross margin that will drive incremental traffic while keeping our operating margins stable and consistently ensuring we have the right assortment in place. The strategy rests on four pillars. First, impulse, our core, where we're sharpening price-back architecture and promotions to achieve competitive price points, and optimizing our assortment to include lower-cost alternatives in key categories where the focus on convenience had reduced our competitiveness. Second, prepared food and coffee, where we are working to introduce better products on the food side, simplifying pricing and improving execution, including the optimal utilization of our coffee equipment. So far, our efforts have mostly concentrated on improving in-store execution, which has already translated into healthy growth in the coffee category during the quarter. Building on this momentum, we are now piloting targeted initiatives in coffee across a few regions and the early results are very encouraging relative to control stores where we have not yet made any changes. In food service, we're focused on developing a set of winning products, sweet as well as salty, that can strengthen our effort to enhance the overall food value proposition at OXO, starting with breakfast as a natural complement to what we are already doing in coffee. Over time, we will be extending this approach to other food occasions, particularly lunch. Third, daily and replenishment, a significant opportunity given our low market share in many of the categories that are relevant to this key grocery shopping mission. To capture this opportunity, we will need to work closely with our existing supplier base and potentially expand that base to restructure our assortment, including rethinking our price pack architecture in partnership with them and evaluating the role of private label in certain categories. Getting this right would allow us to become a more relevant destination for our customers' everyday grocery needs, expanding OXO's role and unlocking a meaningful and durable avenue for growth. And fourth, what we refer to as beyond trade or services, where OXO and SPIN together are allowing us to digitize customers and extend our value proposition beyond the store. Speaking of SPIN, the second quarter was a solid one, with continued progress across our key indicators of user growth, engagement, and transaction activity. In fact, monthly active users of SPIN by OXO grew 22% year over year, and SPIN now ranks among the most relevant participants of the SPAY payment system in terms of processed transactions. Interestingly, we're seeing some service categories such as bill payments growing both at SPIN and OXO, underscoring the stickiness of cash in our ecosystem, but also the growing relevance of SPIN as a digitalization tool for a broader consumer base. However, we recognize that payments could become commoditized over time, and so SPIN is already preparing for that possibility by transitioning from a phase focused on gaining scale to one increasingly centered on monetization, which will become more relevant if cash utilization gradually declines. Our monetization strategy is anchored in customer engagement, credit, and broader ecosystem opportunities. Credit in particular is becoming a very strategic focus. We have been running a very small credit pilot that is already generating valuable learnings, giving us greater confidence that the data we have on our millions of customers can produce high quality underwriting insights. Just as encouraging, customer reaction to the pilot has been very positive, reinforcing our conviction in the opportunity ahead. On the subject of credit, as you know, during the quarter we announced a partnership with QED Investors to help us develop our lending platform, bringing on board a very experienced partner with talent, expertise, and execution capabilities that materially improve our odds of success in what can be a high-risk, high-reward business. We will be disciplined and cautious in how we roll this out, and the fact that we chose QED as our partner reflects precisely how seriously we take the risks inherent in credit. Our approach will be based on a low and grow model, allowing us to scale gradually, learn as we go, and manage our exposure responsibly. As the portfolio develops, we will continue to keep you informed of our progress. This strategy keeps us firmly on the path we laid out for SPIN. Leverage the OXO ecosystem, build credit responsibly through the right partnership, and maintain operating discipline as we unlock the platform's long-term value. Let me now turn to VARA, which is quickly becoming one of the most exciting long-term growth opportunities in our portfolio. Positions to take advantage of the consumer evolution toward discount proximity formats across the region, as the consumer increasingly seeks value in non-convenience groceries. Vara serves a distinct set of customer needs and its recent performance is exceeding our expectations, particularly in the newly opened regions. During the second quarter, we set a record for store openings, adding 112 net new stores, representing more than one new store per day, a pace that we will try to improve upon in the coming quarters. Just as encouraging as the pace of expansion is the growth of same-store sales that continue to increase by double digits, driven by resilient demand and sustained customer appeal in a competitive environment. Private label remains central to this story and continues to be a key growth driver, reinforcing Sbarria's value-oriented proposition and standing out as what we believe will be one of the most important long-term differentiators for the format. This growth is coming alongside strong financial discipline and improving unit economics, and our new store cohorts in particular are showing faster maturation curves. Turning to OXO in Latin America, our conviction in the region continues to grow, particularly in Colombia and Brazil. Our effort in Colombia has required patience over many years to develop and fine-tune the right value proposition, and the second quarter offered encouraging evidence that our work is paying off, with revenues up approximately 30%, driven largely by same-store sales growth. More importantly, after a year in which we chose to prioritize refinement of the model over new openings, our value proposition in Colombia is now delivering solid forward economics. This gives us greater confidence that OXO is increasingly resonating with the Colombian consumer and puts us in a stronger position to accelerate unit growth going forward. Of note, Colombia is where our preferred food offering is most developed, representing a double-digit contribution to revenues. We are confident that this operation will become a meaningful value driver for years to come. Brazil represents another relevant opportunity and one where we are equally deliberate in how we build. We closed the quarter with close to 640 stores, and each new cohort continues to perform better than the one before, which gives us confidence that we are learning and improving as we go. At this stage, our focus remains on getting the fundamentals right, continuing to develop and refine our value proposition, adjusting operational processes to increase efficiency, and completing the organizational structure required to support accelerated expansion when the time comes. As in Colombia, we would rather earn the right to scale than rush the process because we are convinced that the discipline we apply today is what will allow Brazil to become a durable, meaningful, long-term contributor to FEMSA. In both Brazil and Colombia, we expect to reach 700 stores by the end of the year. For its part, at Coca-Cola FEMSA, Mexico still shown signs of a soft consumer environment and the impact of higher excise taxes, offset by World Cup tailwinds and by a strong performance in South America with Brazil and Colombia leading the way, achieving record volumes and fueling a double-digit increase in operating income for that region. Summing up, we have a good operational momentum across most of our businesses and we are working hard to continue improving our performance. However, as we look at the second half of the year, we know that some of the tailwinds we enjoyed in recent months will no longer be there. The World Cup was great. But it is over and our comparison base will get a bit tougher as we get into the final months of the year. The consumer environment remains sluggish, particularly in our core Mexico market, and therefore sustaining our momentum will hinge on our ability to continue executing our strategy. And with that, let me turn it over to Martin to go over the numbers in more detail.