What: Liverpool projects revenue and comparable sales growth for Q4 2025 but expects a contraction in profit margins due to higher operating expenses and recent acquisition activity.

Why it is important: Liverpool’s outlook highlights the persistent challenge of maintaining profitability in department store retail, even as revenue grows and international expansion accelerates.

El Puerto de Liverpool’s preliminary fourth-quarter results for 2025 reveal a complex financial landscape, with the company forecasting both revenue and comparable sales growth while also anticipating a contraction in profit margins. The margin pressure is primarily attributed to increased logistics costs following the move to the new Arco Norte location, which has elevated operating expenses and led to a more cautious financial outlook. The recent acquisition of Nordstrom, expected to impact results by up to $175 million, further complicates the profitability picture, introducing both new opportunities and significant financial risks. Despite these headwinds, Liverpool has improved its liquidity position and continues to see growth across its business lines, although retail sales have begun to slow. The company’s evolving strategy now relies on leveraging digital channels and financial services to offset the pressures facing traditional retail, while maintaining a focus on operational efficiency and diversification to navigate an increasingly challenging market environment.

IADS Notes: April 2025 saw Liverpool’s 10.4% revenue growth overshadowed by a 19.6% profit decline, highlighting mounting margin pressures and the importance of network optimisation (Modaes, Apr 2025). By October 2025, the company’s reliance on e-commerce and financial services became more pronounced as fashion sales slowed and operational costs rose (Modaes, Oct 2025). In the same quarter, Liverpool’s 4.4% revenue growth was tempered by logistics and bad debt provisions, reinforcing the challenge of balancing digital expansion with profitability (Press Release, Oct 2025). In March 2025, Liverpool’s acquisition of a 49.9% stake in Nordstrom marked a major step in international expansion, reflecting the growing influence of Latin American retailers (Modaes, Mar 2025). By January 2026, Liverpool’s ongoing transformation and diversification, including the Nordstrom deal, were recognised as key factors in its resilience amid persistent operational and profitability challenges (Modaes, Jan 2026).

El Puerto de Liverpool anticipates lower profitability in 2025