FEMSA Q3 Earnings Miss Estimates, Revenues Top on Growth Across Units

Core Insights - FEMSA reported third-quarter 2025 adjusted net majority earnings per ADS of 88 cents, down from $1.37 in the same quarter last year, missing the Zacks Consensus Estimate of $1.06 [1] - Net consolidated income was Ps. 5,838 million (US$318.2 million), reflecting a decline of 36.8% year over year [1] - Total revenues increased to US$11.7 billion (Ps. 214,638 million), a 9.1% rise year over year, surpassing the Zacks Consensus Estimate of $11.2 billion [2] Financial Performance - Gross profit rose 8% year over year to Ps. 85,709 million (US$4.67 billion), while the consolidated gross margin contracted 40 basis points to 39.9% [4][6] - Operating income improved 4.3% year over year to Ps. 18,126 million (US$988.1 million), with a consolidated operating margin decrease of 40 bps to 8.4% [8] - The company had cash and cash equivalents of Ps. 123,635 million (US$6.7 billion) and long-term debt of Ps. 130,822 million (US$7.1 billion) as of September 30, 2025 [16] Segment Performance - Proximity Americas: Revenues rose 9.2% year over year to Ps. 84,738 million (US$4.6 billion), with same-store sales growth of 1.7% [9] - Proximity Europe: Revenues grew 10.1% year over year to Ps. 14,837 million (US$808.8 million), benefiting from currency appreciation [11] - Health Division: Total revenues were Ps. 21,483 million (US$1.19 billion), up 2.9% year over year, with a same-store sales increase of 0.8% [12] - Fuel Division: Revenues rose 5% year over year to Ps. 17,933 million (US$977.6 million), with average same-station sales increasing by 8.3% [13] - Coca-Cola FEMSA: Revenues advanced 3.3% year over year to Ps. 71,884 million (US$3.9 billion), with an operating margin expansion of 50 bps to 14.3% [14][15] Capital Expenditure - Capital expenditure totaled Ps. 13,128 million (US$715.6 million), an increase from the prior year, primarily due to higher spending in Coca-Cola FEMSA [17] - Proximity Americas recorded slightly lower CAPEX in Mexico, focusing on selective store openings and optimization of existing locations [18]