Company Reports

Femsa grew comparable sales by 10% in the second quarter, led by 11.8% growth in Oxxo Mexico and 11.6% growth in Americas & Mobility (fuel operations and ex-Mexico Oxxo stores). Adjusted EBITDA margin expanded 40 basis points to 14.4%, driven by operating leverage and lower overhead costs.

We award a narrow economic moat rating to Femsa based on the intangible assets and cost advantages at major subsidiaries Coca-Cola Femsa and the Oxxo small-format retail chain, which jointly make up over 70% of total sales and over 90% of operating profits.

Femsa grew comparable sales by 8.5% in the first quarter, led by 8.3% growth in Oxxo Mexico and 10.5% growth in Americas & Mobility. Operating margin was flat at 6.9%, as wider margins in Oxxo Mexico, Americas & Mobility, and Europe were offset by contraction in Health and Coca-Cola Femsa.

We award a narrow economic moat rating to Femsa based on the intangible assets and cost advantages at major subsidiaries Coca-Cola Femsa and the Oxxo small-format retail chain, which jointly make up over 70% of total sales and over 90% of operating profits.

We award a narrow economic moat rating to Femsa based on the intangible assets and cost advantages at major subsidiaries Coca-Cola Femsa and the Oxxo small-format retail chain, which jointly make up over 70% of total sales and over 90% of operating profits.

Femsa grew organic sales by 5% in the fourth quarter, led by 6% increases in both Oxxo Americas and beverage bottling. Favorable sales mix and efficiency gains in the two segments also lifted EBITDA margin by 150 basis points to 18.1%.

Led by Oxxo, Femsa grew sales by 9% in the third quarter, but operating profit rose only 4% due to margin contractions in drugstores and gas stations.

We award a narrow economic moat rating to Femsa based on the intangible assets and cost advantages at major subsidiaries Coca-Cola Femsa and the Oxxo small-format retail chain, which jointly make up 75% of the firm's total sales and over 90% of operating profits.

Femsa grew sales by 6% in the second quarter, but operating profits rose only 1% as Oxxo was a drag (profits down 3%) and the bottling business was flat. Marking its progress in digital, the firm posted user growth of 19% and 17% in its payment and loyalty programs, respectively.

We award a narrow economic moat rating to Femsa based on the intangible assets and cost advantages at major subsidiaries Coca-Cola Femsa and the Oxxo small-format retail chain, which jointly make up 75% of the firm's total sales and over 90% of operating profits.

Femsa grew sales by 11% to MXN 196 billion in the first quarter of 2025. Operating profits rose 5%, as a 7% increase in bottling subsidiary Coke Femsa more than offset a 12% fall in the retail business in the Americas dominated by the Oxxo chain.

We plan to raise our $102 fair value estimate for narrow-moat Femsa by a low-single-digit percentage after digesting solid 2024 results, with revenue growing 11.2% and operating profit rising 19.8%, both surpassing our estimates of 10.3% and 15.8%, respectively. Even with a 5% share price rise following the report, Femsa shares look attractive, as the market may be underestimating the long-term demographic and income tailwinds in Latin America.

We award a narrow economic moat rating to Femsa based on the intangible assets and cost advantages at major subsidiaries Coca-Cola Femsa and the Oxxo small-format retail chain, which jointly make up 75% of the firm's total sales and 90% of operating profits.

We plan to maintain our $110 fair value estimate for narrow-moat Femsa after absorbing third-quarter results. Sales grew 8% and operating profits grew 15% on bottling strength, resilient convenience retail performance despite soft traffic trends, and a favorable currency translation impact due to Mexican peso depreciation. The firm’s retail and bottling expertise, coupled with demographic and income tailwinds in Latin America, should continue to support our constructive view on Femsa’s long-term growth outlook, including our 10-year forecasts for 7% annual sales growth and 9% average operating margins. The shares appear undervalued.

We plan to maintain our $110 fair value estimate on narrow-moat Femsa after absorbing its second-quarter results. Sales rose 12%, led by the Oxxo chain and the bottling business, and operating profits grew by 16%. We remain constructive on the long-term outlook for convenience retail and bottling but expect headwinds to persist in the health format; sales were flat in the quarter and operating income slumped 15%. Despite efforts to rationalize the store base and tighten cost control, we expect a protracted turnaround in this format given intense competition in Mexico and Ecuador. We applaud the firm’s capital allocation initiatives via special dividends totaling $600 million, but don’t think the accelerated share buybacks are an optimal use of capital as we view shares as fully valued. Our 10-year forecasts for annual sales growth and average operating margins both in the high-single-digits remain in place.

We award a narrow economic moat rating to Femsa based on the intangible assets and cost advantages at major subsidiaries Coca-Cola Femsa and the Oxxo small-format retail chain, which jointly make up 75% of the firm's total sales and 90% of operating profits.

We don’t plan any material changes to our $105 fair value estimate on narrow-moat Femsa after absorbing its solid first-quarter results. Sales were up 11% led by the OXXO chain and the bottling business, and operating profits rose 14%. We remain confident in the long-term outlook in the convenience format and the bottling segment. But given the setbacks in drugstores, we think it’s prudent for the firm to be more selective given complex macro and regulation backdrops and varying consumer preferences across Latin America. Our 10-year forecasts for sales CAGR and average operating margins both in the high single digits remain in place, and we view shares as slightly overvalued.

We are maintaining our $105 fair value estimate for narrow-moat Femsa after absorbing mixed 2023 results. Sales growth of 18% (adjusted for divestitures) met our estimate, but the 6% decline in operating income missed our projection for 1% growth. We attribute the profit shortfall to margin compression across retail formats due to high labor costs and a slower ramp-up in newer stores, both of which are fixable, in our view. We remain confident in the long-term outlook for the convenience and fuel formats as well as in bottling, but we see hurdles in regulations and consumer preferences for the struggling health format (5% of 2023 operating profit) and expect the firm to moderate its ambitions in the area. That said, our 10-year forecast for both sales CAGR and average operating margins in the high-single digits are still attainable. Shares look expensive, even after a 16% correction in the past week.

We award a narrow economic moat rating to Femsa based on the intangible assets and cost advantages at major subsidiaries Coca-Cola Femsa and the Oxxo small-format retail chain, which jointly made up 70% of 2022 revenue and around 75% of pretax profits.

We plan to raise our $97 fair value estimate on narrow-moat Femsa by a mid-single-digit percentage to incorporate better-than-expected third-quarter results, a stronger Mexican peso against the U.S. dollar and time value. Revenues grew 12% (excluding the Valora acquisition), and operating profits rose 10%, outpacing our estimates of 10% and 9%, respectively. Results were thanks to solid same-store sales at Oxxo and resilient beverage volume at subsidiary Coke Femsa. We plan to nudge up our 2023 profit projection by a low-single-digit percentage, but our 10-year forecasts for annual sales growth and average operating margins both in the high single digits remain in place. Shares trade in a range we'd consider fairly valued.