Fomento Economico Mexicano S.A.B. de C.V.
FMX · NYSE
Next quarter
Reports Oct 27, 2026.
Consensus is $1.18 EPS for Sep 2026 across 2 estimates, ranging $1.14 to $1.22.
FMX Jun 2026
- 13.41%
- -5.22%
- $0.82
- $0.93
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Highlights
- Earnings beat: 2Q26 EPS was US$0.93 per ADS versus consensus of US$0.82, a 13.41% surprise, while net majority income rose 107.7% to Ps.1.62 per FEMSA Unit.
- Consolidated growth: Revenue increased 9.3% to Ps.231.0 billion and adjusted EBITDA rose 12.7% to Ps.33.3 billion; operating income grew 7.2% to Ps.19.1 billion, or 11.7% on a comparable basis.
- OXXO Mexico recovery: Revenue grew 11.8% to Ps.86.7 billion and operating income rose 12.3% to Ps.8.6 billion, with same-store sales up 9.5% as traffic returned to 2.0% growth.
- Coca-Cola FEMSA contribution: Revenue increased 4.7% to Ps.76.3 billion and operating income rose 9.1% to Ps.10.7 billion, supported by 3.5% volume growth and a 180-basis-point gross-margin expansion to 47.1%.
- Americas & Mobility drag: Revenue grew 17.4% to Ps.28.6 billion, helped by OXXO Brazil consolidation, but operating income fell 88.0% to Ps.80 million as Brazil losses and Mexican fuel-margin compression offset growth.
- Other retail pressure: Health operating income declined 57.7% to Ps.346 million, including a Ps.408 million non-cash credit-risk provision, while Europe operating income fell 7.3% to Ps.638 million.
- Digital ecosystem: Spin by OXXO reached 11.5 million active users, up 22.1%, and Spin Premia reached 29.1 million active loyalty users, up 9.4%; Spin Premia represented 50.4% of OXXO Mexico tender.
- Capital returns and leverage: FEMSA repurchased US$300 million of ADSs in June and paid Ps.45.5 billion of dividends over the last twelve months; ex-KOF net debt was Ps.90.0 billion, or 1.15x adjusted LTM EBITDA.
Analysis
FEMSA delivered a strong 2Q26, with EPS of US$0.93 per ADS beating the US$0.82 consensus by 13.41%. Revenue rose 9.3% year over year to Ps.231.0 billion and operating income increased 7.2% to Ps.19.1 billion, although the comparable increases were stronger at 10.1% and 11.7%, respectively, after currency and consolidation effects. Net income reached Ps.9.2 billion, up 64.9%, helped by a much smaller foreign-exchange loss than in 2Q25. Relative to the implied 1Q26, revenue accelerated from Ps.207.7 billion to Ps.231.0 billion and operating income from Ps.14.3 billion to Ps.19.1 billion, while net income fell from Ps.17.7 billion because the first quarter included a one-time BradyPLUS-related gain.
The defining feature was OXXO Mexico’s return to positive traffic growth, combining 9.5% same-store sales growth with 12.3% operating-income growth despite softer Mexican consumption. Coca-Cola FEMSA supplied another important profit engine, with operating income up 9.1% as volume, input costs and productivity supported margins, particularly in South America. The offset was Americas & Mobility, where revenue growth did not translate into profit because of OXXO Brazil losses and fuel-margin pressure. Management is cautiously optimistic for the second half, but expects a more subdued environment without the World Cup tailwind.
OXXO Mexico recovery
OXXO Mexico was the quarter’s clearest operational improvement. Revenue rose 11.8% to Ps.86.7 billion, consisting of 9.5% same-store sales growth and 3.5% store expansion. The average ticket increased 7.4%, while traffic rose 2.0% after several quarters of decline. Management attributed the improvement to stronger execution, assortment and pricing actions in traffic-driving categories, service growth and a favorable FIFA World Cup effect. The business added 253 stores during the quarter and reached 24,708 locations.
- Profitability: Gross profit increased 10.2% to Ps.38.9 billion, but gross margin contracted 70 basis points to 44.8% as price actions supported traffic and market-share recovery.
- Operating leverage: Operating income grew 12.3% to Ps.8.6 billion and margin expanded 10 basis points to 10.0%, as expenses rose 9.6%, below revenue growth.
- Customer ecosystem: Spin by OXXO reached 11.5 million active users, up 22.1%, while Spin Premia reached 29.1 million active users, up 9.4%; Spin Premia tender rose to 50.4% from 45.8%.
Coca-Cola FEMSA margins
Coca-Cola FEMSA provided a solid and increasingly important earnings contribution. Revenue grew 4.7% to Ps.76.3 billion, or 6.6% on a currency-neutral basis, on 3.5% volume growth to 1,071.8 million unit cases. Gross profit increased 8.8% and gross margin expanded 180 basis points to 47.1%, supported by lower sweetener and PET costs, hedging and favorable currency effects on U.S.-dollar raw materials. Operating income rose 9.1% to Ps.10.7 billion, with margin up 60 basis points to 14.0%.
The geographic mix mattered. South America delivered 6.9% volume growth and 46.5% operating-income growth, including a Ps.265 million insurance-claim benefit in Brazil. Mexico and Central America was weaker: operating income fell 7.0% as operating expenses grew 9.1%, ahead of revenue, amid a challenging consumer backdrop and the effects of higher excise taxes. KOF’s majority net income nevertheless increased 16.9% to Ps.6.2 billion, helped by stronger operations and a lower tax rate.
- South America: Revenue increased 11.8% to Ps.30.9 billion and operating margin expanded 330 basis points to 13.9%, with Colombia volume up 17.7% and Brazil volume up 5.2%.
- Mexico and Central America: Revenue increased only 0.3% to Ps.45.5 billion, while operating margin contracted 110 basis points to 14.0%.
- Cash generation: KOF reduced net debt including hedges to Ps.45.0 billion, with net debt to adjusted EBITDA at 0.74x versus 0.89x at December 2025.
Americas & Mobility
Americas & Mobility showed strong top-line momentum but remained the principal consolidated earnings setback. Revenue increased 17.4% to Ps.28.6 billion, including 55.6% growth in merchandise sales and 9.3% growth in fuel and other sales. Comparable revenue growth was 11.6%, excluding OXXO Brazil and currency effects. Merchandise growth reflected South American OXXO execution and Brazil consolidation, while fuel volume increased 3.7% to 956.6 million liters.
Operating income fell 88.0% to Ps.80 million and margin dropped 240 basis points to 0.3%. The main pressures were the incorporation of OXXO Brazil losses, higher costs to build regional capabilities and fuel-margin compression in Mexico, where unit margin declined 14.5% to Ps.2.27 per liter despite higher volume. FEMSA added only 46 stores on a last-twelve-month basis, reflecting its focus on four-wall economics rather than expansion pace.
- Brazil: OXXO Brazil was consolidated from February 1, 2026 and increased reported sales, but its losses materially reduced segment operating profit.
- Bara: Revenue increased 35.8%, same-store sales rose 11.3% and the store base expanded 47.5% year over year to 786 locations.
- Comparable earnings: Even after excluding Brazil and currency effects, segment operating income declined 29.0%, underscoring the fuel-margin problem.
Health and Europe
Health and Europe remained weaker pockets in the portfolio. Health revenue increased 2.2% to Ps.22.3 billion, or 4.8% on a currency-neutral basis, but operating income dropped 57.7% to Ps.346 million. Besides competitive pressure and mix issues in Chile and Ecuador, Health recorded a Ps.408 million non-cash credit-risk provision related to the unwinding of Colombia’s institutional business. Excluding distribution-cost reclassification, gross profit was broadly stable, but comparable operating income still fell 54.1%.
Europe revenue declined 3.8% to Ps.14.5 billion because of currency translation, while comparable revenue rose 3.2%. Operating income fell 7.3% to Ps.638 million, partly due to one-time reorganization costs and adverse weather and transport disruptions in Germany. Swiss retail performance and expense control helped keep comparable operating income nearly flat, down 0.5%.
- Health footprint: The division added 57 net locations in the quarter and ended with 4,584 stores, but Mexico remained challenging with currency-neutral revenue down 7.8%.
- Reported gross margins: Health margin contracted 310 basis points and Europe margin 120 basis points, although both were affected by distribution-expense reclassification that did not affect operating income.
Capital allocation and outlook
FEMSA continued to return capital while investing selectively. Consolidated adjusted EBITDA rose 12.7% to Ps.33.3 billion, expanding margin 40 basis points to 14.4%, while capital expenditures declined 3.6% year over year to Ps.8.9 billion. Year-to-date CAPEX was Ps.15.1 billion, down 16.2%, reflecting lower spending at Coca-Cola FEMSA, a more measured OXXO Mexico opening pace and discipline in Health and Europe.
Excluding KOF, net debt was Ps.90.0 billion at June 30, up from a 0.93x ratio a year earlier to 1.15x adjusted LTM EBITDA, largely reflecting Ps.45.5 billion of dividends and Ps.10.4 billion of share repurchases over the last twelve months. FEMSA also completed a US$300 million accelerated share repurchase in June. Separately, QED Investors agreed to make a strategic equity investment in FEMSA’s lending business; FEMSA will retain a majority stake and continue consolidating the unit. Management expects second-half momentum to continue but cautions that the period will be more subdued without the World Cup benefit.
- Six-month backdrop: Revenue increased 7.8% to Ps.438.7 billion, operating income rose 6.5% to Ps.33.4 billion and adjusted EBITDA increased 12.1% to Ps.61.5 billion.
- Reported net income: First-half net income was Ps.26.9 billion, up 84.9%, but increased only 2.7% to Ps.14.9 billion excluding the one-time BradyPLUS and Imperial Dade merger gain.
- Digital finance: The QED partnership is intended to add lending, risk-management and product expertise while FEMSA uses OXXO’s customer reach and transaction data to build a controlled credit offering.
