FEMSA (FMX) Q1 Earnings Decline Year Over Year, Revenues Up

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 first-quarter 2024 net majority earnings per ADS of 49 cents (Ps. 0.82 per FEMSA unit). The company posted adjusted net majority earnings per ADS of 47 cents, down from $1.16 earned in the year-ago quarter.Net consolidated income was Ps. 5,884 million (US$355.4 million), reflecting a decrease from Ps.50,329 million from the year-ago quarter.Total revenues were $10.8 billion (Ps. 178,204 million), which improved 11.3% year over year in the local currency. Revenue growth was driven by gains across FMX’s business units.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. QuoteShares of the current Zacks Rank #4 (Sell) company have lost 12.9% in the past three months against the industry’s 3.7% growth.MarginsFEMSA’s gross profit rose 10.9% year over year to Ps. 70,224 million (US$4.2 billion). The consolidated gross margin fell 20 basis points (bps), owing to the gross margin contractions at FEMSA Health and Fuel operations. The decline was partly negated by margin expansions at Proximity Americas, Coca-Cola FEMSA and Proximity Europe units.The company’s gross margin expanded 170 bps at Proximity Americas, 100 bps at Proximity Europe and 20 bps at the Coca-Cola FEMSA segments. However, the gross margin contracted 80 bps in the Fuel segment.FEMSA’s operating income (income from operations) was up 14.4% year over year to Ps. 14,767 million (US$891.9 million). The consolidated operating margin increased 20 bps to 8.3%, driven by higher margins at Proximity Europe and stable margins at Coca-Cola FEMSA.Segmental DiscussionProximity Americas: Total revenues for the segment rose 15.1% year over year to Ps. 70,085 million (US$4.2 billion). The increase can primarily be attributed to a 9.7% rise in same-store sales on 2.2% growth in store traffic and a 7.3% rise in average tickets. The gains mainly stemmed from robust growth across the entire OXXO categories due to the rising demand for thirst and gathering occasions like beer, snacks and soft drinks.The Proximity Americas division had 22,290 OXXO stores as of Mar 31, 2024. Operating income improved 1% year over year. The operating margin for the segment declined 20 bps to 7.1% due to higher operating expenses...

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