Genomma Lab Internacional (LABB) Q2 2026 earnings summary

Executive summary

• Sequential sales improvement in Mexico, with market share gains or stability across all business units despite ongoing market contraction; positive sell-out trends in July signal early traction from new product launches, especially in beverages.

• Productivity initiatives drove gross margin expansion, offsetting higher promotional spend and new taxes.

• LATAM (ex-Argentina) and Argentina delivered strong local currency growth, while the U.S. remained pressured by retail disruption and weak categories.

• Innovation, especially SueroX Mineral, and aggressive commercial execution are key growth drivers for the second half of 2026.

• Consolidated like-for-like sales declined 3.6% year-over-year, with net sales down 6.0% due to currency headwinds.

Financial highlights

• Net sales were MXN 4,397 million, down 6% year-over-year, mainly due to a 10.8% appreciation of the Mexican peso.

• Gross profit was MXN 2,838.6 million, with gross margin expanding 106 bps to 64.6%.

• EBITDA margin declined 200 bps to 21.8% due to operational deleverage on lower volumes.

• Net income increased 5.5% to MXN 375 million, with net margin up to 8.5% on lower financial expenses and FX losses.

• Trailing 12 months free cash flow was MXN 1,259.2 million, down 53.5% year-over-year due to lower operating income and higher working capital.

Outlook and guidance

• Gradual recovery expected in the second half of 2026, driven by stronger execution, competitive pricing, digital/TV communication, and innovation pipeline.

• Margin guidance remains lower for 2026, with expectations for gradual recovery to 23%-24% EBITDA margin in 2027.

• Working capital expected to normalize as new product launches mature.

• Continued focus on defending and building market share amid competitive and consumption headwinds.