At this time, all participants are in listen-only mode. Following the prepared remarks, we will open the call for questions. Please note, if you would like to ask live voice questions, please connect with the phone number provided. Otherwise, we would like you to submit your question as a text with the box provided. I will now turn the call over to Oscar Bentjerodt, Investor Relations. Please go ahead.
Thank you, Rafael. Good morning, everyone. The presenters on this call today are Andrés Neely, Chief Financial Officer, and Irina Axenova, Investor Relations Director. Before we begin today, let me remind you that statements made today by the company may include forward-looking statements. These statements are subject to risk and uncertainties and may be influenced by future events, including changes in macroeconomic conditions, political developments, legislation, and operational factors that may affect Cencosud's future performance. The company undertakes no obligations to publicly update or revise these statements, except as required by law. Please note that no part of this call may be recorded in whole or in part without the company's prior consent. The earnings presentation accompanying this call, which includes additional information, is available on the company's website in Investor Relations section. Please note this call is being recorded.
With that, I will now leave you with our CFO, Andrés Neely. Andrés, please go ahead.
Thank you, Oscar. Good morning, everyone, and thanks for joining us today. The first quarter of 2026 reflected the global context marked by uncertainty, mostly coming from the conflict in the Middle East that translated in a challenging operating environment across our markets. Despite the context, we saw a solid performance in key businesses and a consistent overall performance. Supermarkets and shopping centers continue to show resilience, supported by revenue growth in local currency in Chile, United States, Peru, Colombia, and Argentina. While the department stores and home improvement were impacted by a more challenging demand environment, particularly in Chile, as well as a high comparison base from last year. From a profitability standpoint, EBITDA was supported by a strong performance in Peru and improvements in Colombia and Brazil, in line with the progress of our transformation initiatives.
However, this was partially offset by the performance of certain formats, higher provisions in financial services in Argentina, and foreign exchange effects. At the net income level, results were additionally impacted by higher deferred taxes expenses, mainly related to hyperinflation adjustments in Argentina and revaluation of investment properties. Overall, the quarter represents a transition period as we continue to execute our transformation strategy. We are making steady progress in optimizing our portfolio, strengthening our operating model, and improving efficiency across the organization. While some of these initiatives are creating short-term pressures, we are already seeing signs of operational improvement, and we remain confident in our ability to deliver results as the year progress.
Regarding the headline figures for the quarter, revenues reached CLP 3,957 billion, with adjusted EBITDA of CLP 344 billion and a margin of 8.7%, while distributable net income came at CLP 44 billion. This quarter, we highlight six key takeaways. First, we continue to see a supermarket-led revenue growth across the region with strong performance in Peru and Colombia, resilient results in Chile and United States, and growth above inflation in Argentina. Shopping centers also delivered solid results across all of our regions. Second, profitability progress was led by Peru, where adjusted EBITDA grew 12.7% and the EBITDA margin expanded to 12.6%, alongside positive trends in Brazil and Colombia, both of which delivered meaningful margin expansion in line with our transformation strategy. Third, the online channel continued to gain momentum.
Consolidated online sales grew 10.7% year-on-year, with double-digit growth in Peru and Colombia. Online penetration in supermarkets in Chile reached 15.6%, supported by the expansion of our Prime program. We also continue to advance our growth agenda. During the quarter, we opened four new stores, including three new The Fresh Market locations in the United States, and announced the acquisition of Plaza Central in Colombia, an emblematic shopping center of more than 76,000 sq m in Bogotá. We also made progress on the divestment of our service stations network in Colombia, in line with our portfolio optimization plans. We continue to advance our operational transformation, including new leadership appointments and the move to an integrated platform structure, reinforcing the One Cencosud approach across our business units.
Finally, we advanced our liability management strategy to refinance the 2027 bond maturing in July 2027 through two successful transaction after the quarter close. In Chile, we issued bonds totaling UF 12.5 million across two series with 7 and 29 years maturities. In international markets, we issued a $500 million 144A bond with a 10-year tenor. Together, these transactions extend our debt maturity profile, reducing short-term refinancing risk and enhance our financial flexibility going forward. The financial results for the quarter have revenues reaching CLP 3,957 billion. Excluding Argentina hyperinflation accounting adjustments, revenue were broadly stable, with the growth in local currency in supermarkets across Chile, United States, Peru, and Colombia. Argentina outperformed inflation and shopping centers, delivering strong results across all regions.
Same-store sales in Brazil improved significantly from - 12.1% in the first quarter of 2025 to - 1.7% this quarter, reflecting the progress of portfolio optimization and store value proposition enhancements. This growth was offset mainly by Forex impact in Argentina and the U.S., as well as lower sales in the department store business in Chile, which declined by 12.6% against a high comparison base last year that benefit from a stronger tourism activity. Home improvement in Chile decreased by 4.6%, while in Argentina it increased by 8.5% in local currency, but declined by 25.9% in Chilean pesos, reflecting a continued weakness in the construction sector.
Additionally, revenues in Brazil lowered 14.3% in local currency following the de-divestment of Bretas stores in Minas Gerais executed during 2025. Adjusted EBITDA reached CLP 344 billion, with strong performance in Peru, Colombia, and Brazil. Peru grew 12.7% in Chilean pesos, Colombia 57%, and Brazil 41.9%, with the latter two maintaining a positive trend in line with the ongoing strategic transformation. Shopping centers also delivered a EBITDA growth of 4.3%, supported by revenue growth, expense efficiencies and additional GLA at Cenco Limonar in Colombia.
These gains were partially offset by weaker performance in department stores in Chile, down 39.5% on a softer top line and contraction in home improvement in Chile and Argentina, where lower sales were combined with expense growth in line with inflation, as well as higher risk provisions in financial services in Argentina and operational foreign exchange effects. Moving to the next slide. Quarterly distributable net income was CLP 44 billion. The year-on-year variation was primarily driven by higher deferred tax expense, mainly associated with the revaluation of investment properties in Chile and the hyperinflation adjustments of assets in Argentina, both of which are non-operational effects. Net income reached CLP 102 billion in the quarter. Net leverage ended the quarter broadly stable, supported by a solid liquidity position of $920 million in cash and financial assets.
The sequential variation in leverage reflects a 2.4% increase in net financial debt, driven by unfavorable FX movements, and a 2.1% decrease in like-for-like month adjusted EBITDA. Excluding the hyperinflation adjustments, net leverage stands at 3.2% this quarter. During April, we strengthened our debt profile. We executed a liability management program to refinance the $975 million maturity in July 2027 with two key transactions. In Chile, we issued UF 12.5 million across the two long-dated tranches. In the international markets, we placed a $500 million 10-year bond. These transactions allow us to smooth our amortization schedule, reducing near-term refinancing needs, particularly around the 2027 maturity, extending the duration meaningfully toward the long end of the curve.
We also executed a tender offer for the 2027 bond with almost 66% of outstanding amount tendered. The following make-whole transaction is expected to close on May 15th. From a funding perspective, we achieved attractive terms across both mark-markets, reflecting strong demand and our solid credit profile. Turning to our foreign exchange exposure. While a significant portion of our debt is U.S. denominated, we actively manage this exposure through financial hedging and through natural hedges from our U.S. operation. As a result, our effective U.S. exposure is limited to just 7% of total debt post-hedging, with the vast majority effectively aligned to Chilean pesos. This reflects our disciplined approach to risk management and reduces volatility at the P&L level. From a funding perspective, our debt structure maintains well balance with a high proportion of fixed rate debt and limited exposure to other currencies.
With that, I'll hand it to Irina to discuss country performance and the progress of our strategic initiatives.
Thank you, Andrés. Good morning, everyone. Let's look at our quarterly results by country, starting with Chile, where we delivered a resilient performance against the high comparison base in the previous period. Revenues were led by growth in supermarkets, up 0.2%, primarily driven by online sales, which grew 8%. In shopping centers, revenues were up 4.7%. This was partially offset by department stores, which were down 12.6% on lower tourist traffic compared to last year, and by home improvement down 4.6% amid continued weakness in the construction sector. On the profitability side, adjusted EBITDA decreased 14.9%, primarily driven by margin contraction in home improvement and department store as a result of lower sales, while in supermarkets, the contraction reflected a 38 basis point gross margin compression from higher promotional activity.
In shopping centers, adjusted EBITDA increased 4.3% in line with revenue growth. Turning now to Argentine. We continue to deliver revenue growth above inflation in supermarket and shopping centers, supported by these segments' strong performance and also strong performance in the online channel. Revenues increased 28.5% in Argentine pesos and decreased 11.8% in Chilean pesos year-on-year, reflecting the impact of unfavorable FX translation. Supermarkets delivered solid performance driven by Jumbo and Disco, the integration of Makro, the online channel, which grew almost 57% year-over-year, and further increase in penetration of private labels. This was partially offset by lower sales in home improvement amid continued weakness in the construction sector. Shopping centers also showed strong performance, supported by new leases.
Speaking about private label, private label penetration reached almost 21% during the quarter, an expansion of nearly 350 basis points year-on-year, making Argentina the country with the strongest contribution to our consolidated private label growth. On the profitability side, adjusted EBITDA decreased 3.9% in Argentine pesos and 33.7% in Chilean pesos year-on-year. This reflects continued weakness in home improvement and increased risk provisions and financial services, partially offset by margin expansions in supermarkets, performance improvement in Makro, and operating cost control. Shopping centers, in contrast, delivered EBITDA growth driven by an improved commercial mix and space optimization that reduced maintenance costs. Moving on to the U.S.
We continue to expand The Fresh Market presence with four new stores opened during the quarter, including two locations in Florida and the reopening of the store in Hendersonville. Revenues increased 2.4% in U.S. dollars and decreased 6.2% in Chilean pesos year-over-year, reflecting the impact of foreign exchange. Growth was supported by the expansion of the online channel, which was up 13% this year, and the contribution from the store opened over the last 12 months, sorry. On the profitability side, adjusted EBITDA decreased 1.4% in U.S. dollars and 9.7% in Chilean pesos, mainly explained by a slight gross margin contraction and extraordinary expenses associated with store openings. Now moving on to Peru.
The business in Peru continued to deliver strong growth momentum during this quarter, with solid execution across both supermarkets and shopping centers. Revenues grew 5.9% in local currency and 6.5% in Chilean pesos. This performance was driven by strong supermarket sales, with same-store sales of 5.1%, double-digit growth in online sales, supported by the recent launch of Wong Prime loyalty program, and the opening of new stores at Cenco La Molina during the quarter. Online sales in supermarkets grew 17.9% year-on-year, and private label penetration reached 18.1%. Adjusted EBITDA increased 11.8% in Soles and 12.7% in Chilean pesos, reaching an adjusted EBITDA margin of 12.6%.
The improvement was driven by top-line growth in both supermarkets and shopping centers and a 64 basis point gross margin expansion in supermarkets, as well as a reduction in expenses at Cenco La Molina. Turning now to Brazil. The quarter reflected meaningful progress in our turnaround strategy, with significant improvement in profitability and a clearly improving sales trajectory. The year-on-year decline in revenues, down 14.3% in local currency and 12.4% in Chilean pesos, is largely explained by the exit of 54 Bretas stores in Minas Gerais, the sales which was executed during 2025. Despite this top-line effect, same-store sales improved significantly to - 1.7% from - 12.1%, reflecting the progress of portfolio optimization, format adjustments, and the strengthening of our in-store value proposition.
On the profitability side, adjusted EBITDA improved significantly, with EBITDA margin expanding 143 basis points year-on-year, supported by portfolio rationalization, commercial initiatives that drove a nearly 370 basis point gross margin expansion, and a reduction in operating expenses. Finally, turning to Colombia. The country delivered a very strong quarter, with growth and meaningful margin expansion across all business units. Revenues increased 3.4% in Colombian pesos and 8% in Chilean pesos, driven by growth in supermarkets across both physical stores and online sales. Home improvement was supported by new payment methods and government measures that strengthened sector activity, with online sales growing 34% year-on-year and same-store sales reaching almost 11%. Shopping centers revenues also reflected the incorporation of new tenants at Cenco Limonar.
Adjusted EBITDA increased 46.2% in Colombian pesos and 57% in Chilean pesos, with margin expansion of 120 basis points respectively. That's not respectively. Supermarket margins were partially impacted by higher labor costs following maximum wage increases, as well as expenses related to ongoing format adjustments. This result reflects the tangible progress of our transformation strategy in Colombia, with disciplined commercial execution, effective pricing and cost actions, format optimization, and improving operating leverage across the business. Now continuing with the advances in our strategic pillars, starting with private label strategy. During the quarter, private label reached a consolidated penetration of 18.5%, up 72 basis points year-on-year, with consolidated sales of almost $760 million, an increase of 5.7%.
Growth was broad-based, with Argentina leading the expansion at a significant 350 basis points, followed by Chile, and also supported by multiple SKU launches across the region, including a new smoked and processed meats facility in Colombia. Private label maintains an important level for both customer loyalty and margin resilience. We continue to see strong runway ahead across both food and non-food categories. Moving to our e-commerce progress. Consolidated online sales grew 3.6% year-on-year, with double-digit growth in Peru, the U.S. and Colombia, with online penetration in Chile reaching record 15.6%.
As part of our One Cencosud strategy, building on Jumbo Prime in Chile, during the quarter, we expanded our loyalty ecosystem with the launch of Wong Prime in Peru and the TFM Rewards in the U.S., alongside the new mobile app for TFM. This unified Prime strategy is a key enabler of e-commerce growth across our markets, supporting both customer engagement and higher frequency. Let me also briefly highlight our continued organic expansion across the region. During the quarter, we opened four new stores, adding 6,500 sq m of selling space, and we completed nine renovations across formats. New openings included three TFM stores in the U.S., in Aventura and South Beach in Miami region and Pittsburgh, as well as the reopening of Hendersonville store and also a new Santa Isabel La Maison in Chile.
In real estate, we incorporated more than 84,000 sq m of additional GLA year-on-year, reinforcing our long-term growth of our shopping center portfolio. We also announced acquisition of Plaza Central in Peru, which Andrés already mentioned, and looking forward to incorporating this asset once the transaction is completed. Remain focused on disciplined expansion and strategic locations, supported by our profitability focus and ongoing regional portfolio optimization. Now moving to our sustainability commitments and recognition. We continue to strengthen our leadership position through a consistent focus on sustainability and long-term value creation. Across governance, we are reinforcing transparency and communication as we published our 2025 integrated annual report and new content platforms, focused on innovation and leadership. On the environmental front, we continue advancing our initiatives in waste reduction and community support across our operations.
From a people perspective, we remain committed to social impact, supporting communities, promoting healthier lifestyles through initiatives like Cenco Runners, and also strengthening our connection with customers and communities through partnerships such as our sponsorship of the Chilean national rugby team. All of this is being recognized externally with relevant achievements across ESG rankings, customer experience, and our retail media platform, reinforcing that our strategy is delivering both operational progress and reputational strength. With this, we conclude our prepared remarks, and we'll begin the Q&A session. Rafael, over to you.
Thank you. We'll now begin the question and answer session. If you are joining via phone and would like to ask a question, please press star two on your telephone keypad and wait for your name to be announced. If you are connected via the webcast, you may submit your question through the Q&A box. We will pause briefly to allow questions to queue. Okay, we have our first voice question from Melissa Byun, Bank of America. Please go ahead. Your line is now open.
Thank you very much. Hi, Andrés, Irina, Oscar. First, can you comment on the tactical actions you mentioned in the press release that you're taking in Chile to improve competitiveness and reactivate sales? What specifically are you doing, and what is the impact you're seeing on sales and margins? Related to this, how did sales trend along the quarter in Chile, I think particularly in March when we saw the sharp increase in fuel costs? What are you seeing in April and early May? Thank you.
Yeah.
Thank you, Melissa. I'll start, and then Andrés will complement. On the actions, I think we mentioned in the press release, we've done several tactical actions across different platforms, but I think the good example is we launch a multi or, like I would say, across all the platform campaign in Chile, which is called The Circle Which Rewards You. That includes all our formats. That's a combined kind of action across one unified loyalty program that includes our supermarkets, Jumbo, Santa Isabel, Paris, and all our shopping centers from Cenco Malls. It's a one platform for all the customers who shop across all our format. Speaking of the results that we're seeing, this is only one example, but there are other actions. There's a lot of movement in the online platform.
We're focusing on the loyalty programs, focusing on strengthening, our value proposition at the stores format, working on the pricing, on the commercial side of the business as well. The results that we're seeing, we're seeing I would say if we look at the how the April moved, I would say sort of the trends were kind of similar to what we saw in the quarter with slight improvement. We're seeing a much better results in March already, especially across in the supermarkets, all our formats here in Chile.
Complementing Irina, I would say there are a lot of actions being done on the pricing, on assortment and in the way we are managing product purchases. In Santa Isabel, for example, we are freezing prices on a set of products that are key for our customers. That has also driven much better performance, especially during May in these early days that we are seeing now. These key initiatives in the core business, in pricing, assortment, and in the value proposition are also being complemented with some remodelations in Chile. In particular at this time, we have five stores that are undergoing changes, and we are also doing changes in other countries, in Brazil, mostly.
Great. Just to follow up on the remodeling, how much of an impact did it have in terms of disruption on sales in the quarter? What do you expect the uplift sales to be once the process is complete?
We are remodeling some retail stores and also doing a lot of changes in our shopping centers, mostly in Chile. We have several brownfield projects underway and changes in the layout in the relevant shopping centers in Chile. I would say the changes have more an impact on the shopping center side rather on the retail side. Considering the footprint that we have in Chile, the intervention only of five stores is quite limited. Of course, we take all the measures not to impact customer experience and to do this in the less harmful way for our operation. Despite that, there is some disruption in the process.
Great. Thank you very much.
Thank you, Melissa.
Okay. Thank you. Thank you very much. We will now move to our next voice question that comes from Nicolás Larrain, JP Morgan. Please go ahead. Your line is now open.
Hey, guys. Thank you. Good morning. Thank you for the call. Thank you for taking my question. I have two, one in Chile, one in Argentina. First in Chile, just wanted to confirm Andrés and Irina, that you mentioned that in supermarkets, April and May were performing, I understood, a bit better than what we saw on the first quarter. Just wanted to check that out once again. Also to ask about, you know, your diagnosis on what's happening in Chile, particularly in food retail. I want to understand if it's just increased competition or you see any, you know, any other headwinds or any other topics that are worth mentioning. That's my second question.
In Argentina, if you could share some color on how you've seen trends in the second quarter. We saw some stabilization in supermarkets, but it appears that top line is still elusive for the industry as a whole. I wanted to see what you're seeing on the ground for your operations this past month. Thank you.
You wanna start, Irina?
I'll start with, let's do like Argentina, Chile trends. I think as I mentioned earlier, we are seeing positive movements in supermarkets, specifically in Chile in May as well as in Argentina, with like a good performance, which is like definitely much more positive and better what we saw in the previous months or previous quarter. We're also seeing improvements along home improvement stores in Chile, partially probably only related to all the actions that we've been doing, strengthening value proposition, like more customized approach to different group of customers, launches of Easy Pro Club. The actions are definitely bringing results and we're feeling much more positive about the second quarter or at least the coming months.
Hi, Nicolás. Regarding your question about data diagnostic, what we are seeing in Chile is a very intense promotional activity, especially on supermarkets. We are also seeing a soft demand, especially in department stores and in home improvement. Remember that specifically in department stores during the previous year, we had a lot of tourism from Argentina that drove a lot of growth on that sector. We are seeing changes in that trend and that has impacted mostly department stores. And we are seeing a very weak construction sector, both on the B2B and the B2C part of that business. In Argentina, what we are seeing is that construction is also very slow. We see a very resilient and improving performance in supermarkets.
What we see in Argentina, which is a countrywide situation, is in financial services. We have seen a lot of increases in non-performing loans provisions across the board in that market. We have made important provisions during this first quarter, and we are managing our lending strategy accordingly to what we are seeing in that country. I would say those are the main factors behind the performance in Chile and in Argentina.
Very quickly, Andrés and Irina, if I could just ask more follow-up. When we think about supermarkets in Chile, could you give us some color on how is Jumbo performing versus Santa Isabel? Thank you. That's my last question.
I don't have that color, but I would say that, like yet, but I would say that, when it comes to, in terms of, you know, we talk about the competitive environment in Chile and the promotional activity, which has been pretty intense, in the last, let's say, many months. I would say that Jumbo is faring a little bit better than Santa Isabel in terms of value proposition and where Jumbo stores stands with the premium offering compared to Santa Isabel, which is a more mid-sector and competes against everybody.
We do have much more offering with a private label in both format, but again, Jumbo probably has a better position in terms of size, volumes, customer that trying to attain the diversity of the product and also location where the stores are.
Yeah, also what we are seeing, and maybe it's complementing the diagnostic, we are seeing some migration of consumption from the physical stores to online. That explains also why we are seeing improvements in the online penetration in Chile and across the board and a softer demand on the stores, on the margin.
Actually, thank you very much once again.
Okay. Thank you. Thank you very much. Our next question is a text question from.
Rafael, we have two questions on the box. Sorry to interrupt. We have from Felipe, Alonso, the questions are about same-store sales and movements in April and May. I do believe we've already answered all the questions. Guys, if you want any follow-up, Alonso, Felipe, just let us know. I do believe we've answered your questions as well.
Okay. Maybe just a reminder to the audience, if you are connected via the phone and you would like to ask a voice question, please press star two on your phone keypad and wait for your name to be prompted. Our web participants can also send a text question. I'll wait for some questions to come in. Once again, if you're connected via the phone and you would like to ask a voice question, please press star two on your phone keypad and wait for your name to be prompted. If you are connected via the web, you can submit your question as text. Just a final reminder, if you would like to ask a voice question and you are connected via the phone, please press star two on your phone keypad and wait for your name to be prompted. Our webcast participants can submit their questions as a text.
Okay. Looks like we have no further questions from the audience, so I'm gonna pass the line back to the team for their closing remarks.
Right. Thank you everyone for joining us today, and we look forward to having you on our next call.
Yeah. Thank you, everyone. We will remain available for any additional questions.
Thank you. Have a good day.
Thank you. We are now closing all the lines.