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Here's How FEMSA is Placed Just Ahead of Q3 Earnings Season
ZACKSยท 2025-10-24 15:30
Core Insights - Fomento Economico Mexicano, S.A.B. de C.V. (FMX) is expected to report third-quarter 2025 earnings on October 28, with projected revenue growth of 7.3% year-over-year to $11.17 billion [1] - The consensus estimate for quarterly earnings is $1.06 per share, reflecting a 22.6% decline from the previous year, although the estimate has increased by 2.8% in the last week [2] Business Performance - FEMSA has been experiencing growth across its business units, supported by effective growth strategies and investments in digital initiatives, particularly in OXXO Gas [3][9] - The company is advancing its strategy to create a distribution platform in the U.S. through expansion in the specialized distribution industry, which is expected to enhance top-line performance [5][9] Digital Initiatives - FEMSA's Digital@FEMSA unit is focused on building a digital and financial ecosystem, with successful products like the OXXO digital wallet and loyalty programs [4] Cost Pressures - The company is facing margin pressures due to persistent cost challenges, including inflation, labor expenses, and supply-chain inefficiencies, which are likely to impact profitability in the upcoming quarter [6][9] Stock Performance - FMX shares have decreased by 9.3% over the past six months, underperforming the industry and broader market indices [10] - The company is trading at a forward 12-month P/E ratio of 22.43, higher than the industry average of 18.36 but lower than the S&P 500 average of 23.39 [10]