Core Viewpoint - The article emphasizes the importance of identifying and maintaining trends in short-term investing, highlighting that sound fundamentals and positive earnings estimates are crucial for sustaining momentum in stocks [1]. Group 1: Recent Price Strength Screen - The "Recent Price Strength" screen is a unique short-term trading strategy that helps investors shortlist stocks with strong fundamentals capable of maintaining an uptrend [2]. - Stocks that pass this screen are typically trading in the upper portion of their 52-week high-low range, indicating bullish sentiment [2]. Group 2: Coca-Cola FEMSA (KOF) Analysis - Coca-Cola FEMSA (KOF) has shown a solid price increase of 9.4% over the past 12 weeks, indicating investor confidence in its potential upside [3]. - KOF has also maintained a price increase of 3.1% over the last four weeks, suggesting that the upward trend is still intact [4]. - Currently, KOF is trading at 85.2% of its 52-week high-low range, indicating a potential breakout [4]. Group 3: Fundamental Strength - KOF holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [5]. - The Zacks Rank system has a strong track record, with Zacks Rank 1 stocks averaging an annual return of +25% since 1988 [6]. - KOF also has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [6]. Group 4: Additional Investment Opportunities - Besides KOF, there are several other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting further investment opportunities [7]. - The article encourages exploring over 45 Zacks Premium Screens tailored to different investing styles for identifying potential winning stocks [7].

Financial Data and Key Metrics Changes - Consolidated volume declined 2.2% year-on-year to 986.5 million unit cases, primarily due to declines in Mexico and Colombia, partially offset by growth in Brazil, Argentina, Uruguay, and Guatemala [10] - Total revenues grew 10% to MXN 70.2 billion, with a currency neutral increase of 5.9% [11] - Gross profit increased 12% to MXN 31.8 billion, leading to a margin expansion of 80 basis points to 45.4% [11] - Operating income rose 7.3% to MXN 9.2 billion, with operating margin contracting 30 basis points to 13.2% [12] - Adjusted EBITDA increased 11% to MXN 13.3 billion, with EBITDA margin expanding 20 basis points to 18.9% [13] - Majority net income increased by 2.7% to MXN 5.1 billion [14] Business Line Data and Key Metrics Changes - In Mexico, volumes declined 5.4%, influenced by economic deceleration and geopolitical tensions [15] - Sparkling beverage volume declined 3.3%, while steel beverages grew 3.9% and bottled water grew 4.6% [10] - In Guatemala, volumes increased 1.9% despite high inflation affecting consumer sentiment [18] - Brazil saw a 2.5% volume growth, with Coca-Cola Zero Sugar growing 65% year-on-year [24] - Colombia experienced an 8.1% volume decline due to a challenging macro and sociopolitical context [27] - Argentina and Uruguay volumes increased by 9.1% and 6% respectively, with Argentina showing signs of gradual recovery [29] Market Data and Key Metrics Changes - Mexico and Central America volumes declined 4.6% to 553.3 million unit cases, while revenues increased 4.8% to MXN 39.7 billion [36] - South America volumes increased 1% to 433.2 million unit cases, with revenues rising 17.4% to MXN 30.5 million [40] - Gross profit in South America increased 22.8%, leading to a margin expansion of 190 basis points to 42.5% [41] Company Strategy and Development Direction - The strategic focus for 2025 includes growing the core business, enhancing the Juntos+ initiative, and fostering a customer-centric culture [8] - The company aims to navigate the current operating environment through tactical adjustments and promotional activities [7] - Sustainability remains a priority, with significant progress reported in renewable energy use and waste management [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to external challenges and maintain long-term objectives [7] - The macroeconomic backdrop remains uncertain, with increased competitive intensity noted in the beverage industry [104] - Management anticipates a gradual recovery in consumer sentiment and volume growth in the second half of 2025 [113] Other Important Information - The company identified approximately $90 million in savings initiatives across all operations, focusing on Mexico and Colombia [60] - The company reported a net effect of MXN 65 million from insurance payments in Mexico for the quarter [141] Q&A Session Summary Question: Insights on adjusting to the uncertain environment in Mexico - Management highlighted the need for accessible pricing and an intense promotional calendar to remain competitive in the market [58] Question: Cost savings projections for 2025 - Management identified $90 million in savings, distributed across various operational areas, with a significant portion expected from Mexico [60] Question: Profitability by country in Latin America - Management noted that margin expansion was observed across all operations, particularly in Brazil and Argentina [70] Question: Market share trends in Mexico - Management acknowledged a decline in market share due to competitive pressures but indicated recovery efforts were underway [81] Question: Updates on working capital dynamics - Management explained that working capital changes were driven by inventory replenishment and ERP migration processes [96] Question: Impact of promotional strategies in April - Management indicated that adjustments made in February were starting to yield positive results by April [104] Question: Outlook for cost of goods sold - Management expects continued relief from lower sweetener prices and stable PET costs for the remainder of the year [136]

Financial Data and Key Metrics Changes - Consolidated volume declined 2.2% year-on-year to 986.5 million unit cases, primarily due to declines in Mexico and Colombia, partially offset by growth in Brazil, Argentina, Uruguay, and Guatemala [10] - Total revenues grew 10% to MXN 70.2 billion, with a currency neutral increase of 5.9% [11] - Gross profit increased 12% to MXN 31.8 billion, leading to a margin expansion of 80 basis points to 45.4% [11] - Operating income rose 7.3% to MXN 9.2 billion, with an operating margin contraction of 30 basis points to 13.2% [12] - Adjusted EBITDA increased 11% to MXN 13.3 billion, with an EBITDA margin expansion of 20 basis points to 18.9% [13] - Majority net income increased by 2.7% to MXN 5.1 billion [14] Business Line Data and Key Metrics Changes - In Mexico, volumes declined 5.4%, influenced by economic deceleration and geopolitical tensions [15] - Sparkling beverage volume declined 3.3%, while steel beverages grew 3.9% and bottled water grew 4.6% [10] - In Guatemala, volumes increased 1.9% despite high inflation affecting consumer sentiment [18] - Brazil saw a 2.5% volume growth, with Coca-Cola Zero Sugar growing 65% year-on-year [24] - Colombia experienced an 8.1% volume decline due to a challenging macro and sociopolitical context [27] - Argentina and Uruguay volumes increased by 9.1% and 6% respectively, with Argentina showing signs of gradual recovery [29] Market Data and Key Metrics Changes - Mexico's volume decline was attributed to a high comparison base from the previous year and a deceleration in economic activity [15] - In Guatemala, despite a 10% increase in remittances, consumer sentiment remained cautious, leading to a higher propensity to save [20] - Brazil's resilient consumer environment contributed to volume growth, despite a challenging comparison base [23] - Colombia's inflation and deteriorating consumer confidence negatively impacted volumes [27] Company Strategy and Development Direction - The strategic focus for 2025 includes growing the core business, enhancing the Juntos+ initiative, and fostering a customer-centric culture [8] - The company aims to navigate the current operating environment through tactical adjustments and promotional activities [7] - Sustainability remains a priority, with significant progress reported in renewable energy use and waste management [47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to external challenges and maintain long-term objectives [7] - The competitive environment in Mexico has intensified, necessitating rapid adjustments in pricing and promotional strategies [58] - Management remains cautiously optimistic about the budget, anticipating a recovery in the second half of the year [113] Other Important Information - The company identified approximately $90 million in savings initiatives across all operations, with a focus on Mexico and Colombia [60] - The company reported a net effect of MXN 65 million from insurance payments in Mexico for the quarter [141] Q&A Session Summary Question: Insights on adjusting to the uncertain environment in Mexico - Management highlighted the need for accessible pricing and an intense promotional calendar to remain competitive in the current market [58] Question: Cost savings projections for 2025 - Management identified $90 million in savings initiatives, distributed across various operational areas [60] Question: Profitability by country in Latin America - Management noted margin expansion across all operations, particularly in Brazil and Argentina [70] Question: Market share trends in Mexico - Management acknowledged a decline in market share due to competitive pressures but indicated recovery efforts are underway [81] Question: Updates on the rollout of Juntos+ in Mexico - Management confirmed plans to start the rollout in Mexico around June or July, following successful implementation in Brazil [93] Question: Outlook for cost of goods sold - Management expects continued relief from lower sweetener prices and stable PET costs for the remainder of the year [136]

Financial Performance - Total revenues increased by 10.0% to Ps. 70,157 million, with a currency-neutral growth of 5.9%[24] - Gross profit rose by 12.0% to Ps. 31,832 million, with a gross margin expansion of 80 basis points to 45.4%[25] - Operating income grew by 7.3% to Ps. 9,248 million, while the operating margin contracted by 30 basis points to 13.2%[26] - Majority net income increased by 2.7% to Ps. 5,139 million, with earnings per share at Ps. 0.31[33] - Total revenues increased by 17.4% to Ps. 30,488 million, driven mainly by volume growth and revenue management initiatives[49] - Gross profit rose by 22.8% to Ps. 12,947 million, with a gross margin expansion of 190 basis points to 42.5%[50] - Operating income increased by 31.1% to Ps. 3,848 million, resulting in an operating margin expansion of 130 basis points to 12.6%[51] - Adjusted EBITDA grew by 11.0% to Ps. 13,254 million, with a margin of 18.9%[68] - Adjusted EBITDA for Q1 2025 was 5,346 million Pesos, up 27.3% from 4,200 million Pesos in Q1 2024[76] Volume and Sales - Volume declined by 2.2% to 986.5 million unit cases, primarily due to decreases in Mexico and Colombia[23] - Volume increased by 1.0% to 433.2 million unit cases, primarily due to growth in Brazil (2.5%), Argentina (9.1%), and Uruguay (6.0%), despite an 8.1% decline in Colombia[48] - The number of transactions increased to 3,018.7 million, a growth of 2.7% from 2,938.9 million transactions in the same quarter last year[76] - Volume of sales reached 433.2 million unit cases, a slight increase of 1.0% from 428.8 million unit cases in Q1 2024[76] Expenses and Liabilities - Operating expenses rose by 14.3% to Ps. 22,478 million, impacting operating income growth[64] - The comprehensive financing result recorded an expense of Ps. 1,126 million, a decrease from Ps. 1,188 million in the previous year[29] - The company’s net debt rose to 42,552 million Pesos, an 11.0% increase from 38,329 million Pesos[83] - Total current liabilities decreased by 10% to 60,160 million Pesos from 67,171 million Pesos[81] Market and Economic Conditions - The company continues to monitor macroeconomic conditions across its operating regions, including inflation and currency fluctuations[94] - Inflation rates in key markets for 1Q25: Mexico at 0.26%, Colombia at 2.30%, and Argentina at 7.40%[94] - The average exchange rate for the Mexican Peso in 1Q25 was 20.42, a 20.2% increase from 1Q24[95] - The closing exchange rate for the Argentine Peso was 1,074.00 in March 2025, reflecting a 25.2% increase from March 2024[95] - Coca-Cola FEMSA's financial performance is influenced by regional economic factors, including inflation and exchange rates[94] Strategic Initiatives - The company is focused on long-term strategies while addressing short-term challenges through various initiatives[12] - The company enrolled over 1.3 million customers in the Premia Juntos loyalty program, achieving a redemption rate of 75%[15] - Future outlook includes potential strategies for market expansion and product innovation, although specific details were not disclosed in the call[96] - The company emphasizes the importance of adapting to local market conditions and consumer preferences in its operational strategies[96] Reporting and Compliance - Coca-Cola FEMSA reported 1Q25 results on April 25, 2025[96] - The CFO, Gerardo Cruz Celaya, signed the report, indicating the company's commitment to transparency and regulatory compliance[99]

Financial Reporting - Coca-Cola FEMSA filed its annual report on Form 20-F for the fiscal year ended December 31, 2024, with the U.S. Securities and Exchange Commission[5] Consumer Reach - The company serves over 276 million consumers and sells approximately 4.2 billion-unit cases annually through more than 2.2 million points of sale[6] Operations and Infrastructure - Coca-Cola FEMSA operates 56 manufacturing plants and 256 distribution centers across various countries including Mexico, Brazil, and Argentina[6] Sustainability Commitment - The company is committed to generating economic, social, and environmental value for stakeholders across the value chain[6] - Coca-Cola FEMSA is a member of several sustainability indices, including the Dow Jones Sustainability MILA Pacific Alliance Index and the FTSE4Good Emerging Index[6]

Financial Risks - As of December 31, 2024, approximately 28.6% of the company's total debt was variable rate funding, which could increase costs if interest rates rise[1] - Argentina's cumulative inflation over the past three years exceeded 100.0%, categorizing it as a hyperinflationary economy, which may adversely affect the company's financial position[2] - Depreciation of local currencies relative to the U.S. dollar increases costs for raw materials and debt obligations, negatively impacting financial results[3] - Significant fluctuations in local currencies may continue to affect the company's results and financial condition[4] Political and Social Risks - Political and social events, including upcoming elections in 2024 and 2025 in several countries, may introduce risks associated with changes in government and public policies[5] - Recent constitutional reforms in Mexico could create operational risks and affect the company's ability to conduct business[6] - The new U.S. administration's policies may lead to economic slowdown and increased operational costs, impacting demand for the company's products[7] Market and Economic Influences - The market value of the company's securities may be influenced by economic conditions in other countries, including the ongoing military conflict involving Russia and Ukraine[8] Equity and Capital Concerns - Holders of units and ADSs in the U.S. may face dilution of equity interests due to restrictions on preemptive rights in capital offerings[9] - The company may not file a registration statement with the SEC, limiting U.S. holders' ability to participate in future capital increases[10]

Group 1 - The stock of Coca-Cola FEMSA, S.A.B. de C.V. (KOF) is experiencing significant attention due to high implied volatility in the options market, particularly the Aug 16, 2024 $80.00 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in Coca-Cola FEMSA's stock price, potentially due to an upcoming event [2] - Currently, Coca-Cola FEMSA holds a Zacks Rank 3 (Hold) in the Beverages - Soft drinks industry, which is in the top 24% of the Zacks Industry Rank, with no analysts increasing earnings estimates for the current quarter and one analyst revising estimates downward [3] Group 2 - The high implied volatility surrounding Coca-Cola FEMSA could indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility to capture decay [4]

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. However, it isn't easy to find a great growth stock.In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the trad ...

Financial Reporting and Compliance - The consolidated financial statements are prepared in accordance with IFRS, with financial information presented in Mexican pesos[28]. - Argentina's cumulative inflation exceeded 100.0% over the three years prior to December 31, 2023, necessitating adjustments for inflationary effects in financial reporting[30]. - The company is subject to a 10.0% Mexican withholding tax on dividends paid to both Mexican and non-Mexican residents[38]. - The company faces risks related to compliance with evolving privacy and data protection laws, which could result in significant operational and financial repercussions[60][62]. - The company maintains a Global Integrity Compliance Program to address compliance risks, but unexpected breaches could harm its reputation and financial standing[77]. - The company has faced legal proceedings and investigations that could have an adverse effect on its financial condition and results of operations[80]. Dividends and Financial Performance - The company declared dividends of 2.900 Mexican pesos per share for the fiscal year 2022, with payments scheduled for May 3, 2023, and November 3, 2023[34]. - For the fiscal year 2023, the company plans to declare dividends of 1.520 Mexican pesos per share, with payments scheduled for April 16, July 16, October 15, and December 9, 2024[36]. - Total revenues for the year ended December 31, 2023, reached Ps. 245,088 million, with a gross profit of Ps. 110,860 million[106]. - Approximately 77.4% of the company's total revenues for the year ended December 31, 2023, were attributable to operations in Mexico and Brazil[82]. - The gross profit margin for Mexico and Central America was 64.6%, compared to 35.4% for South America[106]. Market Competition and Consumer Trends - The company faces significant competition in the beverage industry, including from Pepsi and local beverage brands, impacting pricing and market share[50]. - Changes in consumer preferences and regulatory actions may reduce demand for certain products, particularly those sweetened with sugar or sold in plastic bottles[48]. - The company competes mainly in terms of price, packaging, promotional activities, and product innovation across its territories[174]. Operational Risks and Environmental Concerns - Economic, political, and health crises, such as pandemics, may adversely affect the company's business and financial results[52]. - The company anticipates increased regulatory requirements regarding environmental, social, and governance (ESG) matters, which may lead to significant additional compliance costs[56]. - The company aims to reduce its carbon footprint by increasing the use of recycled packaging materials and participating in sustainability initiatives[57]. - The company relies heavily on water for production, and climate change may exacerbate water scarcity, affecting future production needs[65][66]. - All bottling plants in Mexico meet wastewater discharge standards set by local and federal authorities, with penalties for non-compliance[219]. - In Brazil, water exploitation is regulated by various laws, and companies must obtain necessary permits to use spring water in bottling plants[222]. Financial Strategies and Growth Initiatives - The company aims to grow its core business by capturing growth opportunities for the Coca-Cola portfolio and accelerating the growth of Coca-Cola Zero Sugar[138]. - Strategic M&A is a priority, with a focus on value-enhancing acquisitions and a disciplined approach[139]. - The company plans to increase manufacturing and distribution capacity while implementing best-in-class logistics and distribution enablers[139]. - The company has strengthened its relationship with The Coca-Cola Company, updating growth principles and digital strategy[137]. - The refreshed vision for 2023 emphasizes customer commitment and sustainable development[136]. Sales and Distribution - The company serves approximately 272 million consumers daily and operates 56 bottling plants and 251 distribution centers[102]. - The company markets and sells around 4.0 million unit cases per year through over 2.1 million points of sale[102]. - The company operates 173 distribution centers in Mexico and Central America and 79 in South America, serving over 1 million retailers[161]. - The company utilizes a variety of sales and distribution models, including pre-sale systems and digital platforms, to enhance efficiency[164]. Commodity Prices and Taxation - Increases in raw material prices, particularly for concentrate and packaging materials, could adversely affect the company's cost of goods sold and overall financial performance[67][70]. - Geopolitical conflicts and economic sanctions have led to volatile commodity markets, which may continue to impact raw material costs[71]. - The average price for PET resin in U.S. dollars increased by 32.5% in 2023 compared to 2022 across all territories[181]. - Sugar prices in Mexico increased approximately 42.1% in local currency as compared to 2022[188]. - The average taxation in Brazil for value-added tax over net sales in 2023 was approximately 16.3%[197]. Regulatory Changes and Tax Implications - The company is subject to various taxes that may increase due to new laws or modifications to existing tax regulations, adversely affecting financial results[78]. - Mexico's excise tax on beverages with added sugar and HFCS was Ps.1.5086 per liter for 2023, increasing to Ps.1.5737 per liter in 2024[198]. - Argentina imposes a value-added tax of 21.0% on sparkling beverages[197]. - Brazil's average production excise tax was approximately 2.6% and average sales tax was approximately 12.0% over net sales[198]. - The introduction of a new tax on single-use plastics in Colombia is set at 0.00005 on a Tax Value Unit per gram of plastic, with exemptions available for recycled materials[212].

Financial Data and Key Metrics Changes - The company reported a solid quarter with double-digit growth in volume, revenue, operating income, and earnings per share [12][23] - Adjusted EBITDA for the quarter increased by 11.3% to MXN 11.8 billion [23] - Controlling net income increased by 23% to reach MXN 5.4 billion, resulting in earnings per share of MXN 0.32 [43] Business Line Data and Key Metrics Changes - Volume growth accelerated to 11.6% year-on-year, surpassing 1 billion unit cases, driven by strong performance in Mexico, Brazil, Guatemala, Colombia, and Central America [33][34] - In Mexico, organic volumes increased by 9.8%, marking the strongest growth in over 10 years [34] - Operating income growth for the division accelerated to 15.3%, with a 70 basis point margin expansion [23][41] Market Data and Key Metrics Changes - In Costa Rica, brand Coca-Cola grew by 11%, and over 30% of traditional trade sales are now conducted digitally [13][51] - Colombia saw a notable uptick in volumes, with improvements in the first half of the year leading to solid performance in the third quarter [18][38] - Argentina experienced a worsening consumer environment, with volume growth decelerating to 2.6% due to currency depreciation and inflation [24] Company Strategy and Development Direction - The company aims for sustainable growth, planning to increase production capacity by 15% and warehouse capacity by 30% over the next three years [25][84] - The focus is on organic growth while also pursuing inorganic growth opportunities to consolidate the system [8][66] - The company is enhancing its digital platform, Juntos+, which now serves over 480,000 monthly active buyers in Mexico [51][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the team's ability to execute the strategy and deliver sustainable long-term value growth [39] - The company is optimistic about the strategic focus that has enabled positive momentum, despite challenges in certain markets like Argentina [68][24] - Management noted that they are seeing improvements in customer sentiment and operational efficiency across various territories [35][54] Other Important Information - The company achieved a gross profit increase of 13.6%, leading to a gross margin expansion of 140 basis points [50] - The digital B2B platform's penetration in traditional trade volumes is at 66%, with significant opportunities for further enhancement [51][99] - The company is focused on improving working capital dynamics, which has released cash for operations [80][82] Q&A Session Summary Question: What are the growth drivers for future volumes and pricing? - Management expects to focus on sustainable growth through balanced revenue management strategies, targeting opportunities for mix improvements while addressing inflation [60][81] Question: How is the company addressing working capital improvements? - The company has seen improvements in inventory management compared to last year, which has contributed to better cash flow [64][82] Question: What is the outlook for sugar prices and their impact on margins? - Management anticipates significant pressure on sugar prices in 2024, while other raw materials are expected to remain stable [102][112] Question: How is the company gaining market share in Mexico? - The company has reversed a five-year trend of losing market share, implementing strategies that focus on customer service and operational efficiency [71][124] Question: What are the updates on digitalization and its impact on sales? - The company believes there is still significant upside from digitalization, with the recent launch of the 4.0 version of the Juntos+ app expected to enhance sales further [99][114]