Fomento Economico Mexicano S.A.B. de C.V. (FMX Quick QuoteFMX - Free Report) , alias FEMSA, reported first-quarter 2026 adjusted net majority earnings per ADS of 92 cents, topping the Zacks Consensus Estimate of 65 cents by 41.5% and up from 45 cents in the year-ago quarter. The company reported net majority earnings per ADS of $2.41 (Ps. 4.34 per FEMSA unit).

Net consolidated income was Ps. 17,639 million (US$978.2 million), reflecting growth of 97.3% from the year-ago quarter.

Total revenues were US$11.82 billion (Ps. 207,784 million), rising 6.1% year over year in the local currency and edging past the Zacks Consensus Estimate of $11.76 billion by 0.5%. Results were supported by continued traction in the ecosystem around OXXO, including Spin Premia, which ended the quarter with 65.1 million total acquired users. Excluding the currency effects and M&A, comparable revenues grew 8.5% year over year.

Shares of this Zacks Rank #1 (Strong Buy) company have rallied 12.6% in the past three months compared with the industry’s 0.9% growth.

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Peeking Into FMX’s Q1 Margin Details

FEMSA’s gross profit rose 6.6% year over year to Ps. 84,094 million (US$4.66 billion). The consolidated gross margin expanded 20 basis points (bps) to 40.5%, driven by the gross margin expansion of 140 bps in OXXO Mexico, 170 bps in Americas & Mobility, and 150 bps in Coca-Cola FEMSA, offset by a contraction of 60 bps in Europe and 320 bps in Health. Comparable gross profit rose 9.1% year over year, while the comparable gross margin expanded 60 bps to 39.9%.

FEMSA’s operating income (income from operations) improved 5.5% year over year to Ps. 14,314 million (US$793.8 million), reflecting a balance of strength across proximity formats and pressure in selected businesses. Comparable operating income increased 12.1% year over year. The consolidated operating margin was flat year over year at 6.9%, driven by margin expansion of 80 bps in OXXO Mexico, 20 bps in Americas & Mobility, and 20 bps in Europe. This was partly negated by the operating margin contraction of 50 bps in the Health division and 50 bps in Coca-Cola FEMSA.

Adjusted EBITDA increased 11.2% to Ps. 28,127 million ($1.56 billion). Below the line, FEMSA’s effective tax rate was 17.1%, influenced by a one-time, non-cash gain tied to the BradyPLUS and Imperial Dade merger that lifted reported profitability.

FEMSA’s Q1 Segmental Performance

OXXO Mexico: Total revenues for the segment rose 8.3% year over year to Ps. 74,424 million (US$4.1 billion). The company reported 6% growth in same-store sales for OXXO Mexico, driven by a 6.6% rise in average customer ticket, offset by a 0.5% decline in store traffic. Profitability also improved meaningfully. The gross margin expanded 140 basis points to 46.2%, while income from operations rose 20.9% and the operating margin increased 80 basis points to 7.6%, supported by revenue growth management initiatives, supplier income and cost discipline. The OXXO Mexico division had 24,455 stores as of March 31, 2026. 

Americas & Mobility: Total revenues for the segment rose 12.9% year over year to Ps. 24,988 million (US$1.4 billion), reflecting both categories of the platform. Fuel sales grew 7.5%, while merchandise sales jumped 36.6%, aided by operational improvements and the inclusion of OXXO Brazil beginning Feb. 1, 2026. Comparable revenues increased 10.5%. The company reported 4.7% growth in same-store sales for Americas & Mobility. The segment’s gross margin improved 170 bps to 17.2% and operating income rose 34%. The Americas & Mobility division had 1,942 stores as of March 31, 2026.

Europe: Total revenues for the segment grew 0.1% year over year to Ps. 12,919 million (US$716.4 million), while same-store sales declined 2.7%. Even with that pressure, income from operations increased 7.4%, and the operating margin improved 20 bps to 2.8%, reflecting expense control and improved Swiss retail and consumer food service performance.

Health Division: The segment reported total revenues of Ps. 22,175 million (US$1.23 billion), up 0.9% year over year and 6.5% on a comparable basis. This was driven by positive currency-neutral performance in Colombia retail, Chile and Ecuador, partially offset by weakness in Mexico. The segment’s store base reached 4,527 locations as of March 31, 2026. Same-store sales were flat in Mexican pesos and 7.2% on a comparable basis. The gross margin declined 320 bps to 26.2% and operating income fell 14.2%, with performance weighed down by Mexico and a smaller store base.

Coca-Cola FEMSA: Total revenues for the segment advanced 1.1% year over year to Ps. 70,925 million (US$3.9 billion). On a comparable basis, revenues moved up 6%. Coca-Cola FEMSA’s consolidated operating income declined 2.3% year over year and 2.6% on a comparable basis. The segment’s operating margin contracted 50 bps to 12.7%.

FEMSA’s Financial Position

As of March 31, 2026, FEMSA had cash and cash equivalents of Ps. 106,905 million (US$5.9 billion). The company’s long-term debt was Ps. 137,330 million (US$7.62 billion). 

In the first quarter of 2026, capital expenditure totaled Ps. 6,195 million (US$343.5 million), a 29.5% decline from the prior year, reflecting lower investments across all businesses. The reduction underscores a disciplined and more selective approach to growth across the portfolio. 

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