Good afternoon, and welcome to Organización Soriana first quarter 2022 earnings conference call. With us today is Mr. Rodrigo Benet, CFO of the company, and well, Ms. Claudia González, Head of Investor Relations, who will be together discussing the financial performance of the quarter, along with a summary of the latest news of the company. At the end of the presentation, there will be a Q&A session. In order to answer any questions you might have at this time, I would like to remind participants that your lines will be in listen-only mode until the question and answer session. Now, I will pass the call to Mr. Benet. Go ahead, Mr. Benet, you can begin.
Thank you very much. Good afternoon, everybody. Thank you for joining us in this conference call. Today with me is also Claudia González, Head of Financial Planning Department and Investor Relations, and together we'll be going through the company first quarter results of the year. I would like to begin by sharing the progress that we have had as a company during this quarter, in which I'm really pleased to inform that we continue showing a positive trend in our results, even though the economic environment remains very complicated, and the challenges that we have faced in regarding logistics and production costs and import and domestic goods seem to have fortunately we continue with this positive trend.
All these matters, we have managed to control them, thanks to the commitment of the commercial and operational team in benefit to all of our customers by offering them high -quality products at a very competitive price. These actions, among other initiatives, have let us reach a sales increase for the third quarter in a row, confirming that we are going in the right path. In this way, we close the first quarter of the year with a 7.2% increase in the same-store sales and a 7.7% increase in the total store sales. Likewise, at a store format level, Soriana Híper and Soriana Súper achieved a very good performance by working with a very aggressive commercial plan, a higher promotional investment, and assortment improvement with a regional focus.
By this, Soriana Híper show a double-digit increase in sales in more than 40% of the states in which it has presence, especially in the Bajío region of the country and also in the northeast part of Mexico. Also, Soriana Súper deliver a double-digit increase as a total format, particularly boosted by the perishables and prepared food division, in which we have a very, very good performance. Regarding Soriana Mercado and Soriana Express store format, they continue strengthening in its four pillar strategy. The first one, basic products at the best price. Second, increase the participation of the private label. Third, increase the participation of the loyalty program. Fourth, be the winner in all the seasonal promotions. These actions have been strengthening each quarter, resulting in traffic recovery and the clients' active participation in our promotion at a regional level.
Likewise, Soriana Express format also reached a double-digit increase in 20% of the states in which we have presence. Regarding City Club, this format maintained a constant growth and continue achieving increases of double digits in sales in the last 18 months. Particularly, stores located in tourist states like Quintana Roo and Baja California Sur have shown the higher increases of more than 30% in same-store sales, mainly driven by the division of groceries and perishables. On the other hand, and also as one of the strategic pillars of the company, I would like to spend a couple of minutes on private brands that particularly have been playing a very important role in all our store formats, gaining participation in the categories where they participate. Even now, three of our store formats also show a double-digit participation in those categories.
We are particularly sure that the private brand, it will be one of the strategic pillars of the future growth of the company. All these efforts have been very well received and recognized by our customers. We are seeing the first positive consequence of all of our efforts that we have made in the last months. Particularly, we continue and we will continue focus our low price strategy in Soriana Mercado and Soriana Express, that also we believe it will be one of the higher source, the most important source of increase in our business.
Going to the digital part of Soriana, I'm particularly talking about soriana.com and also our new app, I'm pleased also to announce that we reached a double-digit increase in sales compared with the first quarter of 2021, which keeps going as one of our most important strategies. The fundamental part that explain this growth is having a wide and a constant growing product catalog, especially in categories like pharmacy, food, sports, pet items, baby, and home division. Also, we have a specialized microsite sections in our webpage soriana.com that guides our clients through key categories. Also, improvements in the search engine was made in order to guarantee a faster and a complete and friendly experience.
Additionally, we have strengthened the platform in order to customize our clients their shopping experience by suggesting them, by artificial intelligence, products based on interest, search history, and shopping patterns. In the same way, we know that the shopping experience is as important as the delivery time. That is why our personnel and the store's logistics are an important key for us to implement this task efficiently. In this matter, we have developed an application that allow us to manage delivery service by monitoring and analyzing the delivery times of each order. All of these efforts require more staff in order to meet the demand, and for this reason, we have increased the staff just for e-commerce in 160%.
These actions resulted in a 40% increase in the number of purchased orders in comparison with the first quarter of 2021. All this digital transformation in the online shopping experience will continue through 2022, where all company strengths, as a loyalty program and also the Falabella Card, will be available to our clients in and out of our physical stores, taking these two important tools to the website and also to the app. Going to other income, also the real estate business continued positive, showing an increase of 21.2% in revenues, thanks to a recovery in the traffic in our stores and the mall's occupancy. Therefore, in this quarter, the company's total income reached MXN 37.4 billion, which represent a 7.7% increase in comparison with the same quarter of last year.
As we reported in the form that we released today, this increase is mainly supported by the opening of four units and also the recovery in the real estate revenues. Talking about the gross profit, this one reached MXN 8.3 billion, which represent a 22.2% margin with an increase of 7.3% in pesos against the same quarter of last year. This positive impact is due to increase in real estate revenues and also very important improvements in the shrink management. Regarding the operating expenses line, it showed a contraction of 20 basis points, reaching MXN 5.5 billion that represent an increase of 6.4%.
This increase was mainly due to personnel costs and also an increase in the average cost of the energy mix of the company and a higher investment in the advertising campaign. No matter that, we believe that the investment in cost of personnel due to the integration of new personnel to our stores and also the investment in advertising is part of the strategy that is giving results and is driving us to increase also sales. More than expense, we believe that it's a very good investment. As a result of all of this, the first quarter EBITDA reached MXN 2.8 billion, equal to a 7.7% margin and an increase of 1.9%.
In the financial part, particularly talking about the net financial cost, we closed that item in MXN 520 million that represent an important decrease of 8.3%. Going into the future, we will expect to continue making more refinancing of our debt in order to continue achieving more efficiency in the net financial cost of the company. Talking about debt, basically this quarter we closed the total debt in MXN 15.3 billion that represent an increase of 3.5% in comparison with the same quarter last year. Moving on to discuss about our Falabella business and Sodimac business. Let me share with you that particularly in Sodimac, we continue showing a positive performance and a greater acceptance from our clients.
For this first quarter, we reached a 40% increase in the total revenues, basically supported by the improvements in the digital business and also in the same -store sales of our physical stores. Likewise, I would like to tell you that right now we are in the process of opening 2 more units in the northeast part of the country with an investment of around MXN 400 million. This store will be announced in the following months, and I'm pretty sure that store will continue delivering greater value to our business. Talking about the financial business, in the credit card, Falabella Soriana, we also are pretty happy seeing a continued growth in the business. During this quarter, more than 500,000 cards were used. We are right now operating 155 models in all the Soriana Híper stores.
Right now we have 357,000 clients that right now are enjoying and having access to special promotions in Soriana stores. At the end of this first quarter, the credit portfolio is equal to MXN 1.9 billion. Finally, let me give you some updates about our expansion plan for the year, in which we are expecting that in this second quarter, we will open two stores, in a combo of a City Club and a hypermarket. We are also making two important remodeling stores.
We will optimize also six sales floors of six hypermarkets, that basically, with the optimization of that sales floor, we are seeing an opportunity to increase our GLA, taking advantage that the real estate business is start to respond very positive due to the end of the COVID restrictions. Also, even we are analyzing if we can increase in another four units the total plan of openings for this year. I think that all of this is really positive news. Basically start to show a change in our trends compared with the last years. You can expect that Soriana will start to progressively accelerate the organic growth plan going into the following years. Basically, with this I end our integration, and we can continue to the Q&A session. Thank you very much.
As a reminder, to ask a question, you'll need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Bernardo Malpica from Compass Group. Your line is open.
Hi. Thank you for taking my question. My first question is regarding guidance. Could we have an update on your guidance for 2022, or does it remain unchanged? I mean, the 6% same-store sales growth, the 18 stores, MXN 4 billion in CapEx, and 10 basis points EBITDA margin expansion. My second question is regarding market share. I mean, you continue to lose market share against competitors, but when could we see this tendency turning around? And what are your strategies to change this tendency? Thank you.
Sure. Well, regarding the first question, basically, no, we are not making any change in the guidance. It's basically the same that we were releasing at the end of last year. Also regarding the second question, I'm pretty sure that probably April will be the first month in which we can be obtaining same-store sales higher than the major part of our competitors. Particularly in this quarter, as you can see, we made shorter the distance against the main competitors that we have all around the country. As I mentioned in my first intervention, in the last four quarters, the trend that the company has is really positive.
Going closer to the performance of the market and to the top performance even of the market. Right now I can say that probably April we will be surpassing our competitors. I think that, I'm pretty sure that in the second half of the year you will see Soriana recovering market share from the competitors.
Perfect. That helps a lot. Thank you.
Your next question comes from the line of Rodrigo Alcántara from UBS. Your line is open.
Hi. Good morning, afternoon, Rodrigo, and thanks for taking my question. I have two quick ones. The first one, if you can repeat please the same -store sales that you reported in City Club and the Híper formats . Also if you can comment a bit about the same -store sales breakdown by region, perhaps center or Mexico City and north. That will be my first question. The second one would be on the comment that you said on the private label. Just curious if you can share some figures on a consolidated basis, like penetration labels, sales growth, or perhaps any category that you may say is expanding regarding private label to consumer packaged goods.
Any category that you may say is expanding within the private label. That would be my two questions. Thank you.
Sure. Well, first of all, if I understand right, because we have some problems with the audio, but regarding the performance by format and by region, I can say that particularly, Soriana Súper, that is our format that is focused on the daily consumption products, mainly perishables and very basic groceries, is the one that is having the best performance, double digit for the whole quarter. Also, City Club, we are really happy about City Club, not only because they show also almost double digit increase, but also because City Club have basically 3 years in a continual growth all month -by -month, in so many of that months growing higher than the market competitors, talking about the membership clubs.
Actually, right now this is an important data that probably all of you guys also know, but City Club at the end of last year, we surpassed 1 million members. The rate of growth that we have in City Club is double digits. Obviously for this business, first of all, you have to have more members and then the sales come. We are also really proud about the performance of City Club in the last three years. Talking about regions, particularly central parts and south parts of Mexico, we are having a very, very good performance. Basically all the country we are seeing a recovery in the trend of our same -store sales.
Probably we have to say one region that is a little behind the other, it will be the north part of Mexico, in which we are particularly increasing our price strategy and the promotional strategy in order to take the north part of Mexico to the same level of central and south parts of Mexico. In general, all the states of the country is showing a good performance. Basically in all the states of the country, we are making closer the distance against our competitors. Going to the second question about private label is part of the strategic initiatives of the company. You will hear about private label in the next 5- 8 years. It's one of the most important bets for the company.
Right now, we are also pretty proud about the performance. For this first quarter, the increase is double digit and is higher than the teams. We are having a very important increase in private label, that if we can maintain this in the long -term, we will also not only give us more sales, will also give us more margin and more loyalty. The important thing about private label is particularly that the clients only can find that product in your stores, in the Soriana stores. It's a way in which also you create loyalty. Private labels fit really well in the strategy of loyalty of Soriana.
It's something that you will continue to hear about our strategy, that we are increasing private label, that we are making changes, strategic changes in private label, that we are increasing our department of private label. I mean, it's something that we believe it will be really important going into the future. Right now, what I can share is basically the growth that we are having that is double digit, talking about that is higher than teams' numbers. If we talk about participation, right now we have a higher single -digit participation as a percentage of the total sales of the company.
Interesting.
That's actually a big opportunity. If we consider this.
Yeah.
Against countries like Europe, in which you have some cases that the private label represents 20%- 30%, we believe that Mexico have an important opportunity on that.
Interesting. Thank you very much. Just to clarify on the same-store sales that you mentioned in the metro in Mexico City, let's focus on that region, you know, traditionally the most competitive one. Just curious, I mean, is it practical that you grow there, like, above inflation, in line with inflation or can you comment about the specific guidance for you? Or metro region, I mean, if you want to, like, metropolitan region.
In particular, Mexico City is one of the cities in which we are having one of the best recovery, particularly Soriana Mercado and Soriana Express stores in Mexico City is going really well, also Súper Mercado. No, I can say that Mexico City basically have the same condition that all other parts of the region. Again, if you ask me which is right now the toughest region for Soriana in terms of growth, it is not Mexico City, it's North Mexico.
Okay. Thank you very much, Rodrigo.
You're welcome.
Your next question comes from the line of Ulises Argote from JP Morgan. Your line is open.
Hi, Rodrigo. Thanks for the space for questions. A couple of ones here from my side. First, obviously there has been a lot of news floating around the last couple of days on the government's plan to kind of start taking actions against high inflation, et cetera. Anything you can comment here around any expectations you have and maybe how you guys can be involved in the program?
No, I mean, it's a matter of fact that we have an inflation issue in the country. Basically what I can comment about that is that Soriana, we are planning an important program to maintain the price of the basic products really low in order to support the Mexican family. It's something that you will hear about in the following weeks, a particular program in order to give support to the Mexican economy, talking about that. Actually the private label role in this is part of the strategy. One of the ways in which we can give support to maintain a basic product basket in a very attractive price is using private label.
Again, that is one of the reasons why I mentioned that you will hear a lot about our private label strategy. Also because we believe that the inflation problem will continue, not only this year, probably it will continue more than 2022, not only in Mexico, but globally speaking. The use of these tools like private label is a technique in order to maintain competitiveness and low prices.
Okay. Thank you very much for that. That's very helpful. Then the other question that I had is maybe if you can comment a little bit on how online sales are doing, where do you guys stand right now in terms of penetration and if there's kind of any regional difference there where you see one region outperforming or underperforming versus the mean or the rest of the regions? Thanks.
It's again, also talking about the performance by region, exactly the same happening in the online business. Central and south part of Mexico is having much better performance than north part of Mexico. Obviously, north part of Mexico is growing. The whole business is growing at a double-digit rate. Central and south part of Mexico is delivering much better results than north part of Mexico. It's something that we are analyzing very deep why is this happening, because we doesn't see any economic reason or market reason to that. The first conclusion is related with something with the operational part of Soriana or the commercial strategy of Soriana, so we are working on that. The whole business is growing at a double-digit rate. The penetration is still really low.
It continue around 2%. Remember that our short-term goal is take it to the double of that, be more close to 4% in the following years. Still we have a lot of work to do on that. We just released a new version. I mean, it have a couple of months, a new version of the webpage and also the new version of the web app, the app. Right now we have a couple of weeks that we launch a very aggressive promotional and publicity campaign about, saying to the clients that we invite them to download the new app. We just start a strategy to send personalized promotions through email and through the app.
We are expecting that we can accelerate the growth, particularly in the clients that are using the app. The business is going well, but it's still really far away from the levels of penetration that we are looking for. Basically that.
No, that's very helpful. [Foreign Language ] Rodrigo.
You're welcome.
Again, to ask a question, you'll need to press star one on your telephone. Again, that's star one on your telephone. Your next question is from Marisol Andrade from Credit Suisse. Your line is open.
Hi. Thank you for taking my question. I was wondering if you could give us some color on the wage increases that you mentioned, especially in staff increases for home delivery.
Sorry, Marisol. Some color about what?
Home delivery.
Home delivery?
On wage increases.
I think you said what?
That you mentioned.
Wage increases. Yeah.
Especially in staff increases for home delivery. Yes. Thanks.
Sure. Basically, the major part of our increasing the cost of personnel is due to the reinforcement of the number of personnel that we have in the stores. We also have to take into consideration that during the pandemic crisis, particularly last year, we had some problems to fill the personnel accounts in the stores. We are seeing an opportunity to increase the service that we give to our clients because the lack of personnel. It's something that we are really taking care to have enough amount of people in our store in order to deliver a better service. Obviously we have some pressure going to the.
Going into the personnel cost, basically because the incorporation of the PTU and the reforma laboral. The major part of the increase is because we are increasing the number of people in the stores. Particularly in the e-commerce business, we have a program in which we have dedicated and exclusive personnel just to make the picking and to take the orders. Right now we have around 120 stores that we call Especializadas Stores that are the ones that serve a bigger coverage area in order to make the home delivery. Particularly those stores have an increase in the personnel that is exclusive for the home delivery business. Basically those are the two main reasons why we're having an increase in the cost of personnel.
Super clear. Thank you.
There are no questions over the phone. Presenters, please continue.
Okay. Well, if we don't have any more questions, just again, thank you very much for joining us on this conference call. Obviously, if you have any other question or any further comment, feel free to contact Claudia or to contact directly to me. Again, thank you very much and have a good week.