Fomento Economico Mexicano SAB de CV (FMX) Q3 2024 Earnings Call Highlights: Strong Revenue ...

In This Article:

  • Total Revenue Growth: 8.3% increase in the third quarter.

  • Operating Income Growth: 14.6% increase compared to the same period last year.

  • Net Consolidated Income: Decreased 27.5% to MXN9.2 billion.

  • Gross Margin: Expanded by 300 basis points to 44.2%.

  • Operating Margin: Expanded by 10 basis points to 9% of sales.

  • Same-Store Sales Growth (Health Division): 7.4% increase.

  • OXXO Store Expansion: Added 367 net new stores in the third quarter.

  • OXXO Gas Same Station Sales Growth: 7.6% increase.

  • Digital Active Users (Spin by OXXO): Reached 8.2 million, a 28% year-on-year growth.

  • Spin Premia Loyalty Program Users: 23.8 million active users, a 35% year-on-year increase.

  • Coca-Cola FEMSA Revenue Growth: 10.7% increase in top line.

  • Capital Expenditure (CapEx): MXN12.1 billion, representing 6.2% of total revenues.

  • Share Buybacks: Repurchased 102.2 million shares, increasing earnings per share by 2.8% to MXN6.14 year to date.

  • Net Debt to EBITDA Ratio: Stood at 0.68 times at the end of the quarter.

Release Date: October 28, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Fomento Economico Mexicano SAB de CV (NYSE:FMX) reported a solid set of results in the Proximity and Health division, with growth and margin expansion in key areas.

  • The company achieved total revenue growth of 8.3% and a 14.6% increase in operating income compared to the same period last year.

  • OXXO Mexico continues to show structural momentum with a high ROI-WACC spread, and plans for 2025 include adding approximately 1,100 net new stores.

  • The digital division saw a 28% year-on-year growth in active users for Spin by OXXO, indicating strong customer adoption trends.

  • Coca-Cola FEMSA reported a 10.7% increase in top line revenue, reflecting a solid revenue management strategy and operational efficiencies.

Negative Points

  • Same-store sales at Proximity America were flat for the quarter, with a 5.7% contraction in average traffic due to adverse weather conditions and a demanding comparison base.

  • Net consolidated income decreased by 27.5% to MXN9.2 billion, driven by higher interest expenses and a lower non-cash foreign exchange gain.

  • The Health division in Mexico is facing intense competition, requiring strategic adjustments to navigate ongoing challenges.

  • The company decided to suspend the Pronto initiatives due to high costs and a long path to profitability.

  • Traffic at OXXO stores has been negative for two consecutive quarters, raising concerns about operating leverage and consumer demand.

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