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Ingredion's Mexico Headwinds Persist: Can LATAM Profitability Recover?
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Key Takeaways
Ingredion's LATAM Q2 sales rose 3% to $611M, while operating income fell 7% to $118M.
Mexico volumes softened as slower growth and transactional currency effects pressured profitability.
LATAM 2026 sales are seen up low single digits, while operating income is projected down low single digits.
Ingredion Incorporated (INGR - Free Report) continues to face pressure on its Food & Industrial Ingredients—LATAM business, with Mexico remaining an important factor in regional profitability. Although the segment continues to post sales growth, softer demand in Mexico and unfavorable transactional currency effects are weighing on operating performance.
In the second quarter of 2026, LATAM’s net sales increased 3% year over year to $611 million, aided by favorable foreign exchange. However, volumes declined 1%, while price/mix was also unfavorable. Mexico volumes softened amid slower economic growth, while Brazil benefited from growth in industrial and brewing markets.
Profitability remained under pressure. LATAM’s operating income declined 7% to $118 million from $127 million a year earlier, while operating margin fell to 19.3% from 21.3%. Excluding foreign exchange translation effects, operating income decreased 10%. The decline primarily reflected transactional currency impacts in Mexico and a more challenging demand environment.
Image Source: Zacks Investment Research
The structure of Ingredion’s Mexico business continues to make currency movements an important factor. Sales are denominated in U.S. dollars, while most SG&A and operating costs are incurred in pesos. As the peso strengthens against the dollar, those costs increase in dollar terms and can more than offset translation benefits elsewhere in LATAM.
For 2026, LATAM’s net sales are expected to increase in the low single digits, while operating income is projected to decline in the low single digits. Mexico’s transactional currency and macroeconomic headwinds remain central to the segment’s profitability outlook, while foreign currency translation benefits in Brazil provide a partial offset.
The Zacks Rank #4 (Sell) stock has tumbled 8.7% year to date against the industry’s growth of 1.5%.
Stocks to Consider
The Vita Coco Company, Inc. (COCO - Free Report) , a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1 (Strong Buy). COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings per share (EPS) calls for growth of 31.6% and 64.7%, respectively, from the year-ago figures.
Darling Ingredients Inc. (DAR - Free Report) , a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients, currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Darling’s current fiscal-year sales suggests an 11.5% jump from the prior-year levels. The consensus estimate for current fiscal-year EPS stands at $6.98, which implies a substantial improvement from the year-ago period. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
Laird Superfood, Inc. (LSF - Free Report) is a consumer product company that develops, manufactures and markets plant-based, natural and functional food and beverage products. LSF currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Laird Superfood’s current fiscal-year sales and EPS suggests growth of 188.2% and 104 %, respectively, from the year-ago figures. LSF delivered an earnings surprise of 100% in the last reported quarter.
View the Zacks #1 Rank List
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Ingredion's Mexico Headwinds Persist: Can LATAM Profitability Recover?
Key Takeaways
Ingredion Incorporated (INGR - Free Report) continues to face pressure on its Food & Industrial Ingredients—LATAM business, with Mexico remaining an important factor in regional profitability. Although the segment continues to post sales growth, softer demand in Mexico and unfavorable transactional currency effects are weighing on operating performance.
In the second quarter of 2026, LATAM’s net sales increased 3% year over year to $611 million, aided by favorable foreign exchange. However, volumes declined 1%, while price/mix was also unfavorable. Mexico volumes softened amid slower economic growth, while Brazil benefited from growth in industrial and brewing markets.
Profitability remained under pressure. LATAM’s operating income declined 7% to $118 million from $127 million a year earlier, while operating margin fell to 19.3% from 21.3%. Excluding foreign exchange translation effects, operating income decreased 10%. The decline primarily reflected transactional currency impacts in Mexico and a more challenging demand environment.
Image Source: Zacks Investment Research
The structure of Ingredion’s Mexico business continues to make currency movements an important factor. Sales are denominated in U.S. dollars, while most SG&A and operating costs are incurred in pesos. As the peso strengthens against the dollar, those costs increase in dollar terms and can more than offset translation benefits elsewhere in LATAM.
For 2026, LATAM’s net sales are expected to increase in the low single digits, while operating income is projected to decline in the low single digits. Mexico’s transactional currency and macroeconomic headwinds remain central to the segment’s profitability outlook, while foreign currency translation benefits in Brazil provide a partial offset.
The Zacks Rank #4 (Sell) stock has tumbled 8.7% year to date against the industry’s growth of 1.5%.
Stocks to Consider
The Vita Coco Company, Inc. (COCO - Free Report) , a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1 (Strong Buy). COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings per share (EPS) calls for growth of 31.6% and 64.7%, respectively, from the year-ago figures.
Darling Ingredients Inc. (DAR - Free Report) , a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients, currently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for Darling’s current fiscal-year sales suggests an 11.5% jump from the prior-year levels. The consensus estimate for current fiscal-year EPS stands at $6.98, which implies a substantial improvement from the year-ago period. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
Laird Superfood, Inc. (LSF - Free Report) is a consumer product company that develops, manufactures and markets plant-based, natural and functional food and beverage products. LSF currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Laird Superfood’s current fiscal-year sales and EPS suggests growth of 188.2% and 104 %, respectively, from the year-ago figures. LSF delivered an earnings surprise of 100% in the last reported quarter.