Grupo Herdez (HERDEZ) Q1 2026 earnings summary

Executive summary

• Net sales grew 17.5% year-over-year to MXN 5.2 billion, driven by proactive operational planning, front-loading ahead of ERP implementation, and strong domestic demand.

• Operating profit increased 27.1% to MXN 620 million, and EBITDA rose 23.7% to MXN 810 million.

• Completed the sale of a 25% stake in McCormick de México, resulting in a significant one-time gain and reclassification as an equity investment.

• Formalized a 50/50 joint venture with Froneri for the ice cream business, with Froneri assuming operational control and future results shifting to equity method.

• Underwent structural transformation, including SAP S/4HANA rollout and organizational changes to enhance efficiency.

Financial highlights

• Margins expanded to 11.9% (operating) and 15.6% (EBITDA), reflecting strong operating leverage.

• Gross profit increased 13.8% to MXN 1.6 billion; consolidated gross margin contracted by 1.0 percentage point to 30.4%.

• Achieved historic volume of nearly 7,000 tons in March.

• Key categories such as pasta, vegetables, and salsa expanded market share.

• Excluding discontinued operations, net income was MXN 473 million, down 32% year-over-year due to higher financing costs; reported net income including the McCormick gain was MXN 19.4 billion.

Outlook and guidance

• Q2 net sales expected to decrease slightly versus 2025 pro forma due to volume shifts and ERP-related frontloading.

• Full-year sales projected to grow in the high single digits; margins to retract by about one percentage point due to SG&A pressure from ERP implementation.

• Positioned for sustainable growth through digital transformation, operational agility, and a new strategic services model.

• Monitoring geopolitical tensions and crude oil prices for potential impacts on packaging and logistics.

• Strategic partnership with Froneri in the ice cream business expected to further strengthen financial structure.