We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
FEMSA Q3 Earnings Decline Y/Y, Sales Improve on Segmental Growth
Read MoreHide Full Article
Fomento Economico Mexicano S.A.B. de C.V. (FMX - Free Report) , alias FEMSA, reported third-quarter 2024 net majority earnings per ADS of 84 cents (Ps. 1.65 per FEMSA unit). The company posted adjusted net majority earnings per ADS of $1.37, down from $1.75 in the year-ago quarter.
Net consolidated income was Ps. 9,243 million (US$469.4 million), reflecting a decline of 27.5% from the year-ago quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Total revenues were $10 billion (Ps. 196,771 million), which improved 8.3% year over year in the local currency. Revenue growth was driven by gains across all business units and favorable currency rates due to the depreciation of the Mexican Peso against most of its operating currencies.
Shares of the Zacks Rank #3 (Hold) company have lost 9.1% in the past three months compared with the industry’s 0.4% decline.
Image Source: Zacks Investment Research
A Peek Into FMX’s Q3 Margin Details
FEMSA’s gross profit rose 12.1% year over year to Ps. 79,368 million (US$4.03 billion). The consolidated gross margin expanded 130 basis points (bps), owing to the gross margin expansion in Health, Proximity Americas and Coca-Cola FEMSA, and steady margins in Fuel and Proximity Europe.
The company’s gross margin expanded 300 bps at Proximity Americas, 90 bps at the Health division and 20 bps at the Coca-Cola FEMSA segments. The gross margin was flat year over year in the Fuel and Proximity Europe segments.
FEMSA’s operating income (income from operations) improved 14.6% year over year to Ps. 17,374 million (US$882.4 million), driven by growth across all its operating segments. The consolidated operating margin increased 50 bps to 8.8%, driven by margin expansion at the Proximity Americas, Proximity Europe, Coca-Cola FEMSA and Fuel segments. Operating margin growth was partially offset by contraction in the Health division.
Fomento Economico Mexicano S.A.B. de C.V. Price, Consensus and EPS Surprise
Proximity Americas: Total revenues for the segment rose 4.8% year over year to Ps. 77,594 million (US$3.9 billion). The company reported flat same-store sales for Proximity Americas, driven by a 6.1% rise in average customer tickets, offset by a 5.7% store traffic decline. The lower store traffic was due to adverse weather conditions in Mexico, a challenging comparison period, and a weaker consumer environment in Mexico since the end of the second quarter.
The Proximity Americas division had 24,008 OXXO stores as of Sept. 30, 2024. Operating income improved 5.9% year over year. The operating margin for the segment expanded 10 bps to 9% due to a higher gross margin, offset by an increase in operating expenses.
Proximity Europe: Total revenues for the segment grew 20.4% year over year to Ps. 13,480 million (US$684.6 million). The segment benefited from strong sales across all countries, attributed to robust growth in retail sales and the B2B foodservice business. The Proximity Europe division had 2,777 points of sale as of Sept. 30, 2024. Operating income for the segment rose 57.2% year over year, and the operating margin expanded 100 bps on solid gains from the B2B foodservice and retail business, and effective cost management.
Health Division: The segment reported total revenues of Ps. 20,883 million (US$1.06 billion), up 12.5% year over year. Revenues were aided by growth across all countries and the appreciation of currencies against the Mexican peso. The segment’s store base reached 4,532 locations as of Sept. 30, 2024. Same-store sales rose 7.4% in the quarter. The operating income improved 7.2% year over year, while the operating margin contracted 20 bps to 4.3%.
Fuel Division: Total revenues rose 8.2% year over year to Ps. 17,076 million (US$867.2 million). Average same-station sales rose 7.6%, driven by a 1.3% increase in the average volume and a 6.2% rise in the average price per liter. The company had 569 OXXO GAS service stations as of Sept. 30, 2024. Operating income rose 17% and the operating margin expanded 40 bps to 4.9%.
Coca-Cola FEMSA: Total revenues for the segment advanced 10.7% year over year to Ps. 69,601 million (US$3.5 billion). Coca-Cola FEMSA’s consolidated operating income increased 13.9%. The segment’s operating margin expanded by 30 bps to 13.8%.
FEMSA’s Financial Position
As of Sept. 30, 2024, FEMSA had cash and cash equivalents of Ps. 155,770 million (US$7.9 billion). The company’s long-term debt was Ps. 137,794 million (US$7 billion). In the third quarter of 2024, it incurred a capital expenditure of Ps. 12,138 million (US$616.4 million), reflecting higher investments in Coca-Cola FEMSA and Proximity Americas aimed at organic growth and improving productivity, efficiency and competitiveness.
Key Picks
We have highlighted three better-ranked stocks from the Consumer Staples sector, namely Freshpet (FRPT - Free Report) , Vital Farms (VITL - Free Report) and The Chef's Warehouse (CHEF - Free Report) .
Freshpet, a pet food company, presently sports a Zacks Rank #1 (Strong Buy). FRPT has a trailing four-quarter earnings surprise of 132.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings suggests growth of 26.1% and 202.9%, respectively, from the year-ago period’s reported figure.
Vital Farms, which offers a range of ethically produced foods, currently has a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 82.5%, on average.
The Zacks Consensus Estimate for Vital Farms’ current fiscal year’s sales and earnings suggests growth of 26.4% and 88.1%, respectively, from the year-ago reported numbers.
Chef's Warehouse is a distributor of specialty food products in the United States. CHEF presently carries a Zacks Rank #2. CHEF has a trailing four-quarter earnings surprise of 33.7%, on average.
The Zacks Consensus Estimate for Chef's Warehouse’s current financial-year sales and earnings suggests growth of 9.7% and 12.6%, respectively, from the year-ago period's reported figures.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
FEMSA Q3 Earnings Decline Y/Y, Sales Improve on Segmental Growth
Fomento Economico Mexicano S.A.B. de C.V. (FMX - Free Report) , alias FEMSA, reported third-quarter 2024 net majority earnings per ADS of 84 cents (Ps. 1.65 per FEMSA unit). The company posted adjusted net majority earnings per ADS of $1.37, down from $1.75 in the year-ago quarter.
Net consolidated income was Ps. 9,243 million (US$469.4 million), reflecting a decline of 27.5% from the year-ago quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Total revenues were $10 billion (Ps. 196,771 million), which improved 8.3% year over year in the local currency. Revenue growth was driven by gains across all business units and favorable currency rates due to the depreciation of the Mexican Peso against most of its operating currencies.
Shares of the Zacks Rank #3 (Hold) company have lost 9.1% in the past three months compared with the industry’s 0.4% decline.
Image Source: Zacks Investment Research
A Peek Into FMX’s Q3 Margin Details
FEMSA’s gross profit rose 12.1% year over year to Ps. 79,368 million (US$4.03 billion). The consolidated gross margin expanded 130 basis points (bps), owing to the gross margin expansion in Health, Proximity Americas and Coca-Cola FEMSA, and steady margins in Fuel and Proximity Europe.
The company’s gross margin expanded 300 bps at Proximity Americas, 90 bps at the Health division and 20 bps at the Coca-Cola FEMSA segments. The gross margin was flat year over year in the Fuel and Proximity Europe segments.
FEMSA’s operating income (income from operations) improved 14.6% year over year to Ps. 17,374 million (US$882.4 million), driven by growth across all its operating segments. The consolidated operating margin increased 50 bps to 8.8%, driven by margin expansion at the Proximity Americas, Proximity Europe, Coca-Cola FEMSA and Fuel segments. Operating margin growth was partially offset by contraction in the Health division.
Fomento Economico Mexicano S.A.B. de C.V. Price, Consensus and EPS Surprise
Fomento Economico Mexicano S.A.B. de C.V. price-consensus-eps-surprise-chart | Fomento Economico Mexicano S.A.B. de C.V. Quote
FEMSA’s Q3 Segmental Performance
Proximity Americas: Total revenues for the segment rose 4.8% year over year to Ps. 77,594 million (US$3.9 billion). The company reported flat same-store sales for Proximity Americas, driven by a 6.1% rise in average customer tickets, offset by a 5.7% store traffic decline. The lower store traffic was due to adverse weather conditions in Mexico, a challenging comparison period, and a weaker consumer environment in Mexico since the end of the second quarter.
The Proximity Americas division had 24,008 OXXO stores as of Sept. 30, 2024. Operating income improved 5.9% year over year. The operating margin for the segment expanded 10 bps to 9% due to a higher gross margin, offset by an increase in operating expenses.
Proximity Europe: Total revenues for the segment grew 20.4% year over year to Ps. 13,480 million (US$684.6 million). The segment benefited from strong sales across all countries, attributed to robust growth in retail sales and the B2B foodservice business. The Proximity Europe division had 2,777 points of sale as of Sept. 30, 2024. Operating income for the segment rose 57.2% year over year, and the operating margin expanded 100 bps on solid gains from the B2B foodservice and retail business, and effective cost management.
Health Division: The segment reported total revenues of Ps. 20,883 million (US$1.06 billion), up 12.5% year over year. Revenues were aided by growth across all countries and the appreciation of currencies against the Mexican peso. The segment’s store base reached 4,532 locations as of Sept. 30, 2024. Same-store sales rose 7.4% in the quarter. The operating income improved 7.2% year over year, while the operating margin contracted 20 bps to 4.3%.
Fuel Division: Total revenues rose 8.2% year over year to Ps. 17,076 million (US$867.2 million). Average same-station sales rose 7.6%, driven by a 1.3% increase in the average volume and a 6.2% rise in the average price per liter. The company had 569 OXXO GAS service stations as of Sept. 30, 2024. Operating income rose 17% and the operating margin expanded 40 bps to 4.9%.
Coca-Cola FEMSA: Total revenues for the segment advanced 10.7% year over year to Ps. 69,601 million (US$3.5 billion). Coca-Cola FEMSA’s consolidated operating income increased 13.9%. The segment’s operating margin expanded by 30 bps to 13.8%.
FEMSA’s Financial Position
As of Sept. 30, 2024, FEMSA had cash and cash equivalents of Ps. 155,770 million (US$7.9 billion). The company’s long-term debt was Ps. 137,794 million (US$7 billion). In the third quarter of 2024, it incurred a capital expenditure of Ps. 12,138 million (US$616.4 million), reflecting higher investments in Coca-Cola FEMSA and Proximity Americas aimed at organic growth and improving productivity, efficiency and competitiveness.
Key Picks
We have highlighted three better-ranked stocks from the Consumer Staples sector, namely Freshpet (FRPT - Free Report) , Vital Farms (VITL - Free Report) and The Chef's Warehouse (CHEF - Free Report) .
Freshpet, a pet food company, presently sports a Zacks Rank #1 (Strong Buy). FRPT has a trailing four-quarter earnings surprise of 132.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Freshpet’s current financial-year sales and earnings suggests growth of 26.1% and 202.9%, respectively, from the year-ago period’s reported figure.
Vital Farms, which offers a range of ethically produced foods, currently has a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 82.5%, on average.
The Zacks Consensus Estimate for Vital Farms’ current fiscal year’s sales and earnings suggests growth of 26.4% and 88.1%, respectively, from the year-ago reported numbers.
Chef's Warehouse is a distributor of specialty food products in the United States. CHEF presently carries a Zacks Rank #2. CHEF has a trailing four-quarter earnings surprise of 33.7%, on average.
The Zacks Consensus Estimate for Chef's Warehouse’s current financial-year sales and earnings suggests growth of 9.7% and 12.6%, respectively, from the year-ago period's reported figures.