Fitch affirms Grupo Palacio de Hierro's 'AAA(mex)' ratings

What: Fitch Ratings affirmed Grupo Palacio de Hierro's long-term national rating at 'AAA(mex)' with a Stable Outlook.

Why it is important: This affirmation highlights Grupo Palacio de Hierro's strong market position, financial flexibility, and solid brand recognition in Mexico, reflecting its resilience in a competitive environment.

Fitch Ratings has affirmed the 'AAA(mex)' rating for Grupo Palacio de Hierro (GPH), with a Stable Outlook. This decision underscores GPH's robust market position, diversified business operations, and conservative financial profile. Despite projected negative free cash flow due to significant capital expenditures from 2024 to 2026, the company’s strong brand, diversified revenue streams, and low delinquency rates in its credit portfolio support its high rating. GPH's focus on enhancing its digital channels and maintaining a manageable leverage ratio further strengthens its financial stability. The company's strategic investments and solid shareholder support from Grupo Bal also contribute to its affirmed rating.