Fomento Económico Mexicano (FEMSAUBD) Q2 2024 earnings summary

Executive summary

• Strong progress on the FEMSA Forward strategy, including significant capital returns, asset divestitures, and ongoing capital allocation through dividends, share buybacks, and divestitures.

• Core business units, especially Proximity Americas and Coca-Cola FEMSA, delivered robust results despite headwinds in the Health Division and challenging conditions in Mexico.

• Digital initiatives and user engagement continue to grow, supporting ecosystem objectives.

• Net income surged 75.5% to Ps. 15,669 million, driven by non-cash FX gains and higher interest income.

Financial highlights

• Consolidated Q2 revenues rose 12.2% year-over-year to Ps. 198,745 million, with operating income up 15.8% to Ps. 17,626 million, led by Proximity, Fuel, and Coca-Cola FEMSA.

• Gross profit reached Ps. 82,440 million (+19.1% YoY), with gross margin expanding 240 bps to 41.5%.

• OXXO same-store sales grew 4.1%, with a 4.7% increase in average ticket and a 0.6% decline in traffic.

• OXXO Gas posted 15.9% same-station sales growth and 16.2% revenue growth.

• CapEx for Q2 was Ps. 11,312 million, up 35.1% year-over-year, focused on store expansion and digital transformation.

Outlook and guidance

• Full-year OXXO Mexico net new store target remains 1,000–1,100, with a focus on first-half openings to improve efficiency.

• Management expects easier comps in the second half but notes potential post-election consumer softness and will address competitive headwinds in the Health division.

• Optimism for maintaining or slightly exceeding historical 5% same-store sales growth, contingent on macro conditions.