FEMSA's (FMX) Q1 Earnings and Revenues Surpass Estimates

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 2023 net majority earnings per ADS of $7.44 (Ps. 13.44 per FEMSA unit), surpassing the Zacks Consensus Estimate of 76 cents.Net consolidated income was Ps. 50,329 million (US$2,691.4 million), reflecting a significant increase from Ps. 5,848 million (US$285 million) in the year-ago quarter.Total revenues were $9,645 million (Ps. 180,011 million), which improved 21.9% year over year in the local currency. Revenues, in U.S. dollar, surpassed the Zacks Consensus Estimate of $9,614 million. Revenue growth was driven by gains across most business units. On an organic basis, total revenues rose 12.4%.Shares of this Zacks Rank #3 (Hold) company have rallied 13.8% in the past three months compared with the industry’s growth of 9.1%.Image Source: Zacks Investment ResearchFEMSA’s gross profit rose 23% year over year to Ps. 67,013 million (US$3,583.6 million). The consolidated gross margin increased 30 basis points (bps) to 37.2%, owing to the gross margin expansion across most of its business units. The gross margin expanded 50 bps at Health division, 10 bps at Fuel operations and 30 bps at Coca-Cola FEMSA S.A.B. de C.V. KOF. However, it contracted 80 bps at Proximity and 10 bps at Envoy Solutions.FEMSA’s operating income (income from operations) was up 5.5% year over year to Ps. 12,543 million (US$670.7 million). On an organic basis, operating income improved 3.3%. The consolidated operating margin contracted 110 bps to 7% due to margin contractions at Proximity, Health and Envoy Solutions divisions, offset by margin expansions at the Fuel and Coca-Cola FEMSA Divisions.Fomento Economico Mexicano S.A.B. de C.V. Price, Consensus and EPS Surprise Fomento Economico Mexicano S.A.B. de C.V. price-consensus-eps-surprise-chart | Fomento Economico Mexicano S.A.B. de C.V. QuoteSegmental DiscussionProximity Division: Total revenues for the segment rose 21.9% year over year to Ps. 60,871 million (US$3,255.1 million). Organic revenues improved 21.2%. The increase can primarily be attributed to an 18.3% rise in same-store sales on 5.7% growth in store traffic and an 11.9% increase in average ticket. The Proximity division had 21,615 OXXO stores as of Mar 31, 2023. Operating income accelerated 19.7% year over year. The operating margin for the segment declined 20 bps to 7.3%, owing to higher opera...

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