Coca-Cola FEMSA (KOF) Q3 2025 earnings summary

Executive summary

• Consolidated results improved sequentially, driven by cost control, productivity initiatives, and digital transformation, despite a challenging macro environment in Mexico and resilient conditions in South America.

• Mexico faced volume declines due to soft macroeconomic conditions and excise tax impacts, while South America saw positive volume growth and margin protection through efficiency initiatives.

• Over 60% of the client base are now digital monthly active buyers, reflecting ongoing digital transformation.

• Strategic focus remains on sustainable growth, affordability, and revised CapEx to navigate headwinds and maximize stakeholder value.

Financial highlights

• Consolidated volume declined 0.6% to 1.04 billion unit cases; total revenues grew 3.3% to MXN 71.9 billion; currency-neutral revenue up 4.7%.

• Gross profit increased 0.9% to MXN 32.4 billion; gross margin contracted 100 bps to 45.1%.

• Operating income rose 6.8% to MXN 10.3 billion; operating margin expanded 50 bps to 14.3%.

• Adjusted EBITDA increased 3.2% to MXN 14.4 billion; EBITDA margin flat at 20.1%.

• Majority net income increased slightly to MXN 5.9 billion; earnings per share for the quarter were Ps. 0.35.

Outlook and guidance

• Expect low to mid-single-digit volume decline in Mexico for 2026 due to excise tax increase and modest economic growth.

• CapEx investments in Mexico and Guatemala delayed, with distribution center projects postponed to align with lower volume expectations.

• Management expects to leverage adaptability to navigate beverage excise tax increases in Mexico, focusing on sustainable growth, revenue management, affordability, productivity, and cost control.

• Anticipate gradual consumer shift to non-caloric products, with promotional and pricing strategies to support mix evolution.

• World Cup in 2026 expected to provide a brand equity boost and modest volume uplift.