FEMSA (FMX) Posts Sturdy Q2 Growth: Revenues & Earnings Up Y/Y

About this update from Fomento Economico Mexicano Sab De Cv Units Cons. Of 5 Shsb

Fomento Economico Mexicano S.A.B. de C.V. FMX, alias FEMSA, reported second-quarter 2024 net majority earnings per ADS of $1.93 (Ps. 3.52 per FEMSA unit). The company posted adjusted net majority earnings per ADS of $1.87, up from $1.64 in the year-ago quarter.Net consolidated income was Ps. 15,669 million (US$858.1 million), reflecting an increase of 75.5% from Ps. 8,926 million from the year-ago quarter.Total revenues were $11.5 billion (Ps. 198,745 million), which improved 12.2% year over year in the local currency. Revenue growth was driven by gains across most of its business units. The increase was partly negated by unstable weather conditions and gains from the Holy Week holidays that occurred in the prior-year quarter.Shares of the Zacks Rank #3 (Hold) company have lost 14.8% in the year-to-date period against the industry’s 5.3% growth. MarginsFEMSA’s gross profit rose 19.1% year over year to Ps. 82,440 million (US$4.5 billion). The consolidated gross margin expanded 240 basis points (bps), owing to the gross margin expansion in Proximity Americas, Proximity Europe and Coca-Cola FEMSA; and steady margins in FEMSA’s Health and Fuel operations.The company’s gross margin expanded 310 bps at Proximity Americas, 120 bps at Proximity Europe, 10 bps at Health division and 160 bps at the Coca-Cola FEMSA segments. The gross margin contracted 40 bps at the Fuel segment.FEMSA’s operating income (income from operations) improved 15.8% year over year to Ps. 17,626 million (US$965.2 million), driven by growth across most of its operating segments, offset by a decline in the Health division. The consolidated operating margin increased 30 bps to 8.9%, driven by margin expansion at Proximity Europe and flat margins at Proximity Americas, Coca-Cola FEMSA, and the Fuel division.Fomento Economico Mexicano S.A.B. de C.V. Price, Consensus and EPS SurpriseFomento Economico Mexicano S.A.B. de C.V. price-consensus-eps-surprise-chart | Fomento Economico Mexicano S.A.B. de C.V. QuoteSegmental DiscussionProximity Americas: Total revenues for the segment rose 8.9% year over year to Ps. 78,526 million (US$4.3 billion). The increase can primarily be attributed to a 4.1% rise in same-store sales, driven by a 4.7% rise in average customer tickets, offset by a 0.6% store traffic decline. The rise was mainly driven by gains in the water and candy categories at the OXXO stores, off...

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