FEMSA Q3 Earnings Miss Estimates, Revenues Top on Growth Across Units

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 third-quarter 2025 adjusted net majority earnings per ADS of 88 cents, down from $1.37 in the year-ago quarter and missed the Zacks Consensus Estimate of $1.06. The company reported net majority earnings per ADS of 38 cents (Ps. 70 cents per FEMSA unit).Net consolidated income was Ps. 5,838 million (US$318.2 million), reflecting a decline of 36.8% from the year-ago quarter.Total revenues were US$11.7 billion (Ps. 214,638 million), which rose 9.1% year over year in the local currency and beat the Zacks Consensus Estimate of $11.2 billion. Revenue growth was driven by gains across all its business units and favorable currency rates, particularly in Europe, due to the depreciation of the Mexican Peso against many of the foreign operating currencies. Including the currency effects and M&A, comparable revenues grew 4.9% year over year. Shares of this Zacks Rank #2 (Buy) company have rallied 5.9% in the past three months compared with the industry’s 2.7% growth. Peeking Into FMX’s Q3 Margin DetailsFEMSA’s gross profit rose 8% year over year to Ps. 85,709 million (US$4.67 billion). The consolidated gross margin contracted 40 basis points (bps) to 39.9%, driven by gross margin contractions in Coca-Cola FEMSA and Fuel, and the consolidation of its lower-margin US operation within Proximity Americas. These were partly offset by margin expansion in OXXO Mexico within Proximity Americas, and stable margins at Health and Proximity Europe. Including the currency effects and M&A, gross profit rose 7.7% year over year.The company’s gross margin expanded 80 bps at Proximity Americas, and was flat at both Proximity Europe and Health divisions. However, the gross margin contracted 60 bps at the Fuel segment and 100 bps at Coca-Cola FEMSA.FEMSA’s operating income (income from operations) improved 4.3% year over year to Ps. 18,126 million (US$988.1 million), driven by growth across all business units, except Health and Fuel, as well as favorable currency effects, particularly in Europe. Including the currency effects and M&A, operating income increased 6.5% year over year. The consolidated operating margin decreased 40 bps to 8.4%, caused by declines across the Health and Fuel segments, as well as the consolidation of the US Proximity business. This was partly negated by operating margin growth in OXXO Latam...

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