FMX

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Release Date: October 28, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Fomento Economico Mexicano SAB de CV (NYSE:FMX) reported consolidated total revenues growth of 9.8% and operating income growth of 9.9% year-over-year, with net consolidated income up 81%. - OXXO Mexico same-store sales grew 9.2% with traffic up 3.5%, marking two consecutive quarters of traffic recovery and market share gains across all relevant trade channels. - Coca-Cola FEMSA delivered strong revenue growth of 10.9% and operating income growth of 15.4%, with robust volume growth in South America, particularly Colombia and Brazil. - Barra sustained rapid expansion with 112 net new stores and same-store sales growth of 10.3%, with newer cohorts maturing faster than legacy stores. - Fomento Economico Mexicano SAB de CV (NYSE:FMX) maintained a strong balance sheet with net debt to EBITDA of 1.19x (pro forma ~1.3x), below the 2x target, and announced a new share buyback program alongside dividend distributions. - OXXO Mexico gross margin contracted by 120 basis points, partly due to a demanding comparison base with high commercial income in Q3 2025, and operating margin contracted by 40 basis points. - Fomento Economico Mexicano SAB de CV (NYSE:FMX) closed 140 underperforming stores in Mexico, impacting operating income by ~20 basis points, and expects similar impact in Q4, with net new store openings likely to fall short of the 1,000 target for the year. - The Health Division faced a challenging environment in Chile with a highly competitive market, leading to a slight decrease in same-store sales and a gross margin contraction of 80 basis points on a comparable basis. - Fomento Economico Mexicano SAB de CV (NYSE:FMX) recorded an additional non-cash credit risk provision of ~$430 million in Colombia due to uncertainty in the healthcare system, significantly impacting Health Division operating income. - The consumer environment in Mexico remains soft, and Fomento Economico Mexicano SAB de CV (NYSE:FMX) anticipates increasing labor costs from a 13% minimum wage increase and reduced work week, which will pressure selling expenses. - Warning! GuruFocus has detected 6 Warning Sign with FMX. - Is FMX fairly valued? Test your thesis with our free DCF calculator. Q: How do you see the elements of OXXO's value proposition relative to other retail channels that are allowing you to capture so much market share in Mexico? A: CEO Jose Antonio Fernandez said the biggest traffic growth has come from improving execution in core impulse categories (energy drinks, soft drinks, beer, cigarettes) by adding value assortment presentations. He noted all regions grew traffic in Q3, and traffic growth is also coming from services, food service (mainly coffee), and early-stage daily replenishment, though the latter is not yet posting same-store sales growth. He attributed the gains to better execution rather than solely favorable weather. Q: Beyond the near-term easy comparison base and asset pruning, what are the structural traffic opportunities for OXXO Mexico, and what normalized traffic should we expect going forward? A: Fernandez said management is encouraged but not satisfied and declined to give guidance, calling next year "tough" with a rainier, colder Q4 expected. CFO Juan Fonseca added that impulse is the "path of least resistance" and is already materializing, while food service and daily replenishment could drive incremental traffic for years and become material from next year forward. Q: How do you envision the OXXO store five years from now in terms of the mix between food service, replenishment, and impulse? A: Fernandez said OXXO is inspired by U.S. c-store food service but the Mexican consumer differs. He is rallying the team around an ambition to triple the percentage of food service sales, citing Peru, Chile, and Colombia where the mix is nearly triple with similar per-store sales; this would be margin accretive. For daily replenishment, OXXO's advantages are low per-gram prices plus saving customers time given its ubiquitous footprint, with early tests in Chihuahua and Tijuana showing promise; this is expected to be more traffic- than margin-accretive. Q: How much of the SG&A efficiency is already captured in Q3, and how should we think about SG&A going forward given labor pressures next year? A: Fonseca said a significant portion of corporate and operating overhead initiatives is already captured, with at most one to two quarters of tailwinds remaining, plus savings from the proximity/health restructuring. He flagged a 13% minimum wage increase and reduced work week next year, which will raise labor expenses as a percentage of revenues, especially short-term, though FEMSA pays above minimum wage. Mitigants include technology, dynamic shifts, and store automation such as inventory-measuring robots. Q: Has anything changed in growth prioritieswill Bara rank higher relative to OXXO Brazil, and how do you see OXXO's growth outside Mexico? A: Fernandez said Mexico's slower openings reflect a calendar delay and store pruning, but FEMSA remains committed to ~1,000 net new OXXO Mexico stores. Colombia is "ready for acceleration," while Brazil remains prudent given a full-hour work week with two days off, targeting ~70 net new stores next year. For Bara, he is focused on accelerating expansion over same-store sales, planning to open more stores next year than this year and to over-deliver on the "store a day" promise. Q: How do you see capital allocationdivestitures, M&A, and shareholder returns evolving? A: Fonseca said FEMSA will likely end this year/early next year at ~1.51.6x net debt to EBITDA, below its ~2x target, giving flexibility to consider an extraordinary dividend or additional buybacks, to be announced in February/March. Fonseca added that growth in most markets is organic with few assets to acquire; the U.S. has some assets but FEMSA remains disciplined on valuation, and his omission of M&A in the capital allocation discussion was deliberate. Q: What is the magnitude and timeline of logistics investments needed to win in Mexican grocery, and how do Canasta OXXO and Caffenio fit in? A: Fernandez said investment is heaviest in food service capabilitiessupplier-funded equipment, training, and cold-chain distributionwhile Canasta OXXO mainly requires developing price-per-gram presentations and packaging with supplier partners rather than heavy CapEx. On Caffenio, coffee sales per store are well above last year but far below potential; FEMSA also operates ~300 coffee drive-thru stores with a cult following and plans to keep opening them. Q: How do you feel about leaning further into gross margin investment next year, and can you break down the ~70bp of investment by category? A: Fonseca declined to give category granularity, stressing FEMSA manages for EBIT rather than gross margin and rigorously measures the traffic/volume break-even of each affordability initiative, reversing those where the math fails. He said supplier negotiations are shifting from shelf-space/commercial-income-driven deals toward consumer value, with suppliers agreeing to lower-price brands and SKU rationalization. He reiterated focus on growing absolute operating income above inflation. Q: What attributes would FEMSA bring to the fragmented U.S. and European c-store markets, and what are the biggest constraints? A: Fernandez cited commercial income and value extractionas demonstrated at Valora's Swiss retailplus food service, with encouraging results in converted West Texas stores and supplier support from Arca, Coca-Cola, Red Bull, and tobacco players. The constraint is valuation: attractive assets have gone to buyers willing to pay more, and FEMSA would "rather be seen as overly cautious than overly reckless." Fonseca noted over 90% of U.S. c-stores don't make money inside the store, an opportunity OXXO could address. Q: What changed at Bara that allowed you to accelerate store openings so fast this year? A: Fernandez said Bara stores pay their cost of capital with low variance in buying averages, and value layers are being added each year through private label, supply chain, and SKU rationalization. Fonseca credited a new external team with a different mindset, noting stores reach break-even quicklyeven without alcohol licenses in northern Mexicowhich reduces the losses that typically kill returns in discount formats. Fonseca guided to Bara net store growth north of 30%, Colombia in double digits, Brazil high single digits, and Mexico ~4%. Q: What drove the strong Q3 consolidated results, and what explains the 81% increase in net income? A: CFO For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Fomento Economico Mexicano S.A.B. de C.V. FMX, alias FEMSA, reported third-quarter 2026 net majority earnings per ADS of US$1.10, missing the Zacks Consensus Estimate of US$1.18. Net majority earnings per FEMSA unit skyrocketed 185.7% year over year to Ps. 2.00. Net consolidated income was Ps. 10,569 million (US$585.2 million), reflecting growth of 81% from the year-ago quarter. The rise was aided by operating income growth, favorable foreign exchange movements and the absence of prior-year discontinued-operation losses. Total revenues of US$13.66 billion (Ps. 235.6 billion) surpassed the consensus estimate of US$13.46 billion. Consolidated revenues grew 9.8% in Mexican pesos, driven by growth in OXXO Mexico, Americas & Mobility, Health, and Coca-Cola FEMSA, partly offset by a decline in Europe. Comparable revenues, excluding the consolidation of OXXO Brazil and currency effects, advanced 9.4%. Shares of this Zacks Rank #3 (Hold) company have rallied 29.4% in the past year compared with the industry's 20.4% growth. Image Source: Zacks Investment Research FEMSA's gross profit increased 9.7% year over year to Ps. 94,050 million (US$5,207.4 million). The consolidated gross margin was unchanged at 39.9%, reflecting margin expansion in Coca-Cola FEMSA and Americas & Mobility, offset by contractions in OXXO Mexico, Europe and Health. Comparable gross profit rose 9.8%. FEMSA's operating income (income from operations) increased 9.9% to Ps. 19,918 million (US$1,102.8 million). The operating margin expanded 10 basis points (bps) to 8.5%. On a comparable basis, operating income grew 13.4%. Selling expenses increased 11.2%, while administrative expenses rose 3%. Adjusted EBITDA climbed 12.9% to Ps. 34,833 million (US$1,928.6 million), while the adjusted EBITDA margin expanded 40 bps to 14.8%. Fomento Economico Mexicano S.A.B. de C.V. price-consensus-eps-surprise-chart | Fomento Economico Mexicano S.A.B. de C.V. Quote OXXO Mexico: Total revenues increased 10.3% year over year to Ps. 86,652 million (US$4,797.8 million). OXXO Mexico's same-store sales increased 9.2%, reflecting stronger traffic and higher average ticket values. Average ticket increased 5.5%, and store traffic improved 3.5% in the quarter. Commercial initiatives, favorable weather and continued services growth supported performance. The segment's gross margin contracted 120 bps to 44.8% due to a demanding prior-year comparison. Operating income rose 5.8%, while the operating margin contracted 40 bps to 9.3%, reflecting store-closure costs and higher labor expenses. OXXO Mexico added 51 net stores, bringing its store base to 24,759. Americas & Mobility: Revenues increased 18.1% to Ps. 29,466 million (US$1,631.5 million), supported by 66% growth in merchandise sales and an 8.4% increase in fuel and other sales. The consolidation of OXXO Brazil and strength across South American convenience operations supported growth. Same-store sales increased 13.8%. However, operating income plunged 75.9%, with the operating margin contracting 220 bps to 0.6%. Results were hurt by OXXO Brazil losses and continued fuel-margin pressure in Mexico. The division ended the quarter with 1,986 stores. Europe: Revenues declined 5.2% to Ps. 14,063 million (US$778.6 million), primarily reflecting currency headwinds. On a currency-neutral basis, revenues grew 4%, supported by Swiss retail operations. Same-store sales fell 7.7%. Operating income declined 24.8%, while the operating margin contracted 100 bps to 3.8%. Lower business-to-business sales and weaker performance in Germany weighed on profitability. Health Division: Revenues increased 7% to Ps. 22,985 million (US$1,272.6 million), supported by Colombia retail and Ecuador. Same-store sales advanced 4.6%, while the store base reached 4,569 locations. Operating income plummeted 63.2%, with the operating margin contracting 260 bps to 1.4%. Results reflected unfavorable sales mix, margin pressures and a Ps. 430-million non-cash credit-risk provision related to Colombia's institutional business. Coca-Cola FEMSA: Revenues increased 10.9% to Ps. 79,718 million (US$4,413.8 million), supported by solid volume growth across its territories. Total sales volume rose 5.3% to 1,089.8 million unit cases. Gross profit climbed 14.5%, while the gross margin expanded 140 bps to 46.5%. Operating income increased 15.4%, with the operating margin expanding 60 bps to 14.9%. Adjusted EBITDA advanced 16.2%. Spin by OXXO reached 18.4 million acquired users, reflecting 20.4% year-over-year growth. Active users increased 17.3% to 11.7 million, while average monthly transactions rallied 56% to 131.2 million. Spin Premia's acquired users grew 13.6% to 69.2 million. Active loyalty users reached 30 million, up 8.3%, while the average tender at OXXO Mexico increased to 52.1%. As of Sept. 30, 2026, FEMSA had cash and cash equivalents of Ps. 111,063 million (US$6,149.4 million) and long-term debt of Ps. 126,466 million (US$7,002.2 million). Its net debt-to-adjusted EBITDA ratio, excluding Coca-Cola FEMSA, increased to 1.19 times from 0.91 times a year earlier. The third-quarter capital expenditure declined 28.3% year over year to Ps. 9,408 million (US$520.9 million), reflecting lower investments across Coca-Cola FEMSA, OXXO Mexico, Europe and Health. FEMSA also entered an accelerated share repurchase agreement for up to $280 million of ADSs, with final settlement expected before the end of 2026. We have highlighted three better-ranked stocks from the Consumer Staples sector, namely Diageo plc DEO, The Boston Beer Company Inc. SAM and The J. M. Smucker Co. SJM. Diageo is a global beverage alcohol company operating in approximately 180 countries. The company currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. The Zacks Consensus Estimate for Diageo's current financial-year sales suggests a decline of 3.4%, while the earnings estimate implies a rise of 2.7% from the year-ago reported figures. Boston Beer is one of the largest craft brewers in the United States. Boston Beer produces beer, malt beverages and cider products at company-owned breweries and under contract. The company currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for Boston Beer's current financial-year sales and EPS indicates declines of 3.8% and 3.9%, respectively, from the year-ago reported numbers. SAM delivered an average negative earnings surprise of 6.1% in the trailing four quarters. J. M. Smucker is a leading manufacturer and marketer of branded food, beverage, pet food and pet snack products in North America. SJM currently has a Zacks Rank #2. The Zacks Consensus Estimate for J. M. Smucker's 2026 EPS implies growth of 17.1% from the previous year's reported number. SJM delivered a trailing four-quarter average earnings surprise of 13.8%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report The J. M. Smucker Company (SJM) : Free Stock Analysis Report Diageo plc (DEO) : Free Stock Analysis Report The Boston Beer Company, Inc. (SAM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MONTERREY, Mexico, Oct. 28, 2026 (GLOBE NEWSWIRE) -- Fomento Económico Mexicano, S.A.B. de C.V. ("FEMSA") (NYSE: FMX; BMV: FEMSAUBD, FEMSAUB) announced today its operational and financial results for the third quarter of 2026. Reporting Segments Update: In our continuous effort to improve our disclosure, we have updated FEMSA's reporting segment structure to better reflect the scale, stage of development, and strategic differentiation of our various operations. This updated structure should provide investors with greater visibility into the drivers of performance across our operations. Our updated reporting segments are as follows: i) OXXO Mexico; ii) Americas & Mobility which now includes all OXXO convenience store operations outside of Mexico (Brazil, Colombia, Chile, Peru and the U.S.), as well as the fuel operations in Mexico and the U.S; iii) Europe; iv) Health; and v) Coca-Cola FEMSA. Only segments i) and ii) changed relative to our previous reporting structure. - FEMSA: Total consolidated revenues grew 9.8% and Income from operations increased 9.9% compared to 3Q25. - OXXO Mexico: Total revenues grew 10.3% and Income from operations increased 5.8% versus 3Q25. - SPIN: Spin by OXXO had 11.7 million active users1 representing 17.3% growth compared to 3Q25 while Spin Premia had 30.0 million active loyalty users1 representing 8.3% growth compared to 3Q25, and an average tender2 at OXXO Mexico of 52.1% which increased from 48.2% in 3Q25. - COCA-COLA FEMSA: Total revenues grew 10.9% and Income from Operations increased 15.4% against 3Q25. Financial Summary for the Third Quarter and First Nine Months of 2026 Change vs. comparable period | Total Revenues | Gross Profit | Income from Operations | Same-Store Sales As Reported | 3Q26 | YTD26 | 3Q26 | YTD26 | 3Q26 | YTD26 | 3Q26 | YTD26 FEMSA Consolidated | 9.8% | 8.7% | 9.7% | 8.3% | 9.9% | 7.9% | | OXXO Mexico | 10.3% | 10.2% | 7.4% | 9.6% | 5.8% | 12.0% | 9.2% | 8.3% Americas & Mobility | 18.1% | 16.2% | 18.6% | 20.1% | (75.9%) | (66.5%) | 13.8%3 | 10.1%3 Europe | (5.2%) | (3.1%) | (10.8%) | (6.5%) | (24.8%) | (11.6%) | (7.7%) | (5.5%) Health | 7.0% | 3.3% | (7.4%) | (8.7%) | (63.2%) | (46.1%) | 4.6% | 1.8% Coca-Cola FEMSA | 10.9% | 6.2% | 14.5% | 9.8% | 15.4% | 8.0% | | Comparable(A) | | | | FEMSA Consolidated | 9.4% | 9.4% | 9.8% | 9.3% | 13.4% | 12.4% | | OXXO Mexico | 10.3% | 10.2% | 7.4% | 9.6% | 5.8% | 12.0% | 9.2% | 8.3% Americas & Mobility | 10.9% | 11.1% | 4.5% | 9.8% | (29.9%) | (8.7%) | 15.8%4 | 16.3%4 Europe | 4.0% | 2.9% | (2.2%) | (0.6%) | (17.5%) | (5.4%) | 1.3% | 1.0% Health | 3.4% | 4.9% | (8.2%) | (5.9%) | (63.8%) | (44.2%) | 6.5% | 6.6% Coca-Cola FEMSA | 11.3% | 10.4% | 14.8% | 14.1% | 16.4% | 11.9% | | Jose Antonio Fernández Garza-Lagüera, FEMSA's Chief Executive Officer, commented: "During the third quarter we delivered a strong set of results, led by OXXO Mexico and Coca-Cola FEMSA, our two largest businesses. OXXO Mexico continued to build on the positive momentum seen in recent quarters, while Coca-Cola FEMSA delivered strong growth across the income statement, mainly supported by solid performances in most of its territories. We are particularly encouraged by the continued recovery at OXXO Mexico, where same-store sales accelerated and customer traffic delivered its strongest performance in more than two years. This result was driven largely by stronger execution in most regions, commercial initiatives focused on key traffic-driving categories, and the consumer-centric strategy we began implementing last year. These initiatives are gaining traction and allowing us to generate additional traffic while maintaining a disciplined approach to profitability. Beyond OXXO Mexico, Coca-Cola FEMSA delivered a very strong quarter, with solid volume trends and double-digit growth in revenues and operating income, reflecting broad-based contributions across its operations. We also continued to see encouraging progress in some of our growth platforms, with Bara gaining momentum as it accelerates expansion and strengthens the performance of its growing store base, while our OXXO operations in South America maintained a solid commercial trajectory, especially in Colombia. However, certain other business units faced operating headwinds, particularly our Europe and Health divisions, which delivered mixed results. We continue to work hard to bring those business units to their potential. As we enter the final quarter of the year, we remain mindful that the consumer environment in Mexico continues to be soft, Brazil has faced some volatility recently and that we will face a more demanding comparison base in the coming quarters. Nevertheless, we are encouraged by the momentum we are seeing across most of our businesses. While we recognize that the final stretch of the year will present its share of challenges, we believe the strength of our geographically diversified platform positions us well to continue executing against our long-term strategy in pursuit of sustainable, profitable growth." CONFERENCE CALL INFORMATION Our third quarter 2026 Conference Call will be held on: Wednesday, October 28, 2026, 11:00 AM Eastern Time (9:00 AM Mexico City Time). The conference call will be live through our Zoom link. For registration, please visit: Registration: | https://bit.ly/FEMSA_3Q26 If you are unable to participate live, the conference call audio will be available on https://femsa.gcs-web.com/financial-reports/quarterly-results ABOUT FEMSA FEMSA is a company that creates economic and social value through companies and institutions and strives to be the best employer and neighbor to the communities in which it operates. It participates in two core sectors, retail and beverages. In retail, FEMSA is present through four divisions: i) OXXO Mexico, operating the largest small-format store chain in Mexico; ii) Americas & Mobility, which includes its OXXO convenience store operations across Latin America and the United States, as well as its gas station business in Mexico and the United States; iii) Europe, operating convenience and foodvenience formats in five European countries; and iv) FEMSA Health, which includes drugstores and related activities in four Latin American countries. In Mexico, OXXO's operations are enhanced by, and comprise a customer-focused ecosystem with Spin, a digital platform that leverages the OXXO store network to provide Mexican consumers with access to digital financial services, including Spin by OXXO and Spin Premia, among other initiatives. In the beverage sector, FEMSA participates through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume. Across its business units, FEMSA has more than 369,000 employees in 18 countries. FEMSA is a member of the Dow Jones Best-in-Class World Index & Dow Jones Best-in-Class MILA Pacific Alliance Index, both from S&P Global; FTSE4Good Emerging Index; MSCI EM Latin America ESG Leaders Index; S&P/BMV Total México ESG, among other indexes. ________________________________ (A) Please refer to page 12 for our definition of "comparable" and a description of the factors affecting the comparability of our financial and operating performance. 1 Active User for Spin by OXXO: Any user with a balance or that has transacted within the last 56 days. Active User for Spin Premia: User that has transacted at least once with OXXO Premia within the last 90 days. 2 Tender: OXXO MXN sales with Spin Premia redemption or accrual / Total OXXO MXN Sales, during the period. 3 Only includes merchandise. 4 Currency-neutral. Only includes merchandise. Same-store sales includes a weighted average of OXXO Colombia, Chile, Peru and the U.S.A. CONTACT: Investor Contact(52) [email protected] Contact(52) [email protected]

Image source: The Motley Fool. Wednesday, Oct. 28, 2026 - Chief Executive Officer - Jos Antonio Fernndez Garza - Chief Financial Officer - Martn Arias - Investor Relations - Enrique Manero - Investor Relations - Juan Fonseca - Investor Relations - Pamela Ortiz Juan Fonseca: We are joined by José Antonio Fernández Garza, FEMSA CEO, Martín Arias, our CFO, Pamela Ortiz, who is now heading the investor relations team at Coca-Cola FEMSA, and Enrique Manero, who as many of you know, has rejoined us to replace Pamela on our Investor Relations team. The plan is for José Antonio to open the conversation with some high-level comments on the quarter's performance and trends, followed by Martín, who will provide more granular details on the results. Finally, we will open the call for your questions. José Antonio, please go ahead. José Antonio Fernández Garza: Thank you, Juan. Good morning, everyone. I would like to use my time this morning to give you a strategic update focusing on some of the main components of our portfolio and the strategic pillars that we believe are most relevant in our effort to create value and shape the future of the company. Let me begin with OXXO Mexico, which delivered a strong second quarter. Martín will elaborate on each line of the income statement in a few minutes, but I want to highlight the same-store sales performance that came very close to the double digits. It was particularly encouraging to see traffic growing at 2%, the first positive number in eight quarters. To be sure, part of this performance was explained by the uplift from the World Cup, and we faced an undemanding comparison base. This growth also reflected the strategic adjustments we started to make during the second half of last year. We estimate that at least 60% of this uplift was attributable to the World Cup, evenly split between the Panini collectibles and consumption tied mainly to the four Mexico games played in June. However, the improved performance, as we have discussed in previous calls, reflects that we have invested significant time and energy designing, testing, and deploying strategic adjustments across our store base. Beyond the temporary boost from the World Cup, we are seeing signs that the changes we began to roll out last year are taking hold. The core purpose of this effort is to become more consumer-centric at OXXO. Over time, we have successfully developed our commercial levers, but sometimes this has come at the expense of customer centricity, focusing on expanding our margins, but steering us away from our customers and making us less competitive in certain key categories. We are embracing the strategic imperative to put our customers back at the center, already we're starting to see that it translates into better performance and market share gains. Ultimately, we expect this renewed customer centricity to translate into stronger, sustained traffic. The key is to find the right algorithm, the optimal balance of price and gross margin that will drive incremental traffic while keeping our operating margin stable and consistently ensuring we have the right assortment in place. The strategy rests on four pillars. First, impulse, our core, where we are sharpening price pack architecture and promotions to achieve competitive price points and optimizing our assortment to include lower-cost alternatives in key categories where the focus on convenience had reduced our competitiveness. Second, prepared food and coffee, where we are working to introduce better products on the food side, simplifying pricing and improving execution, including the optimal utilization of our coffee equipment. So far, our efforts have mostly concentrated on improving in-store execution, which has already translated into healthy growth in the coffee category during the quarter. Building on this momentum, we are now piloting targeted initiatives in coffee across a few regions. The early results are very encouraging relative to control stores where we have not yet made any changes. In food service, we are focused on developing a set of winning products, sweet as well as salty, that can strengthen our effort to enhance the overall food value proposition at OXXO, starting with breakfast as a natural complement to what we are already doing in coffee. Over time, we will be extending this approach to other food occasions, particularly lunch. Third, daily and replenishment, a significant opportunity given our low market share in many of the categories that are relevant to this key grocery shopping mission. To capture this opportunity, we will need to work closely with our existing supplier base and potentially expand that base to restructure our assortment, including rethinking our price pack architecture in partnership with them and evaluating the role of private label in certain categories. Getting this right would allow us to become a more relevant destination for our customers' everyday grocery needs, expanding OXXO's role and unlocking a meaningful and durable avenue for growth. Fourth, what we refer to as beyond trade or services, where OXXO and Spin together are allowing us to digitize customers and extend our value proposition beyond the store. Speaking of Spin, the second quarter was a solid one with continued progress across our key indicators of user growth, engagement, and transaction activity. In fact, monthly active users of Spin by OXXO grew 22% year-over-year. Spin now ranks among the most relevant participants of the payment system in terms of processed transactions. Interestingly, we are seeing some service categories such as bill payments growing both at Spin and OXXO, underscoring the stickiness of cash in our ecosystem. Also the growing relevance of Spin as a digitalization tool for a broader consumer base. However, we recognize that payments could become commoditized over time. Spin is already preparing for that possibility by transitioning from a phase focused on gaining scale to one increasingly centered on monetization, which will become more relevant if cash utilization gradually declines. Our monetization strategy is anchored in customer engagement, credit, and broader ecosystem opportunities. Credit, in particular, is becoming a very strategic focus. We have been running a very small credit pilot that is already generating valuable learnings, giving us greater confidence that the data we have on our millions of customers can produce high-quality underwriting insights. Just as encouraging, customer reaction to the pilot has been very positive, reinforcing our conviction in the opportunity ahead. On the subject of credit, as you know, during the quarter, we announced a partnership with QED Investors to help us develop our lending platform, bringing on board a very experienced partner with talent, expertise, and execution capabilities that materially improve our odds of success in what can be a high-risk, high-reward business. We will be disciplined and cautious in how we roll this out, and the fact that we chose QED as our partner reflects precisely how seriously we take the risks inherent in credit. Our approach will be based on a low-and-grow model, allowing us to scale gradually, learn as we go, and manage our exposure responsibly. As the portfolio develops, we will continue to keep you informed of our progress. This strategy keeps us firmly on the path we laid out for Spin: leverage the OXXO ecosystem, build credit responsibly through the right partnership, and maintain operating discipline as we unlock the platform's long-term value. Let me now turn to Bara, which is quickly becoming one of the most exciting long-term growth opportunities in our portfolio. Positioned to take advantage of the consumer evolution toward discount proximity formats across the region, as the consumer increasingly seeks value in non-convenience groceries. Bara serves a distinct set of customer needs, and its recent performance is exceeding our expectations, particularly in the newly opened regions. During the second quarter, we set a record for store openings, adding 112 net new stores, representing more than one new store per day, a pace that we will try to improve upon in the coming quarters. Just as encouraging as the pace of expansion is the growth of same-store sales that continue to increase by double digits, driven by resilient demand and sustained customer appeal in a competitive environment. Private label remains central to this story and continues to be a key growth driver, reinforcing Bara's value-oriented proposition and standing out as what we believe will be one of the most important long-term differentiators for the format. This growth is coming alongside strong financial discipline and improving unit economics, and our new store cohorts in particular are showing faster maturation curves. Turning to OXXO in Latin America, our conviction in the region continues to grow, particularly in Colombia and Brazil. Our effort in Colombia has required patience over many years to develop and fine-tune the right value proposition, and the second quarter offered encouraging evidence that our work is paying off, with revenues up approximately 30%, driven largely by same-store sales growth. More importantly, after a year in which we chose to prioritize refinement of the model over new openings, our value proposition in Colombia is now delivering solid overall economics. This gives us greater confidence that OXXO is increasingly resonating with the Colombian consumer and puts us in a stronger position to accelerate unit growth going forward. Of note, Colombia is where our prepared food offering is most developed, representing a double-digit contribution to revenues. We are confident that this operation will become a meaningful value driver for years to come. Brazil represents another relevant opportunity and one where we are equally deliberate in how we build. We closed the quarter with close to 640 stores, each new cohort continues to perform better than the one before which gives us confidence that we're learning and improving as we go. At this stage, our focus remains on getting the fundamentals right, continuing to develop and refine our value proposition, adjusting operational processes to increase efficiency, and completing the organizational structure required to support accelerated expansion when the time comes. As in Colombia, we would rather earn the right to scale than rush the process, because we are convinced that the discipline we apply today is what will allow Brazil to become a durable, meaningful, long-term contributor to FEMSA. In both Brazil and Colombia, we expect to reach 700 stores by the end of the year. For its part, at Coca-Cola FEMSA, Mexico still showing signs of a soft consumer environment and the impact of higher excise taxes Offset by World Cup tailwinds and by a strong performance in South America, with Brazil and Colombia leading the way, achieving record volumes and fueling a double-digit increase in operating income for that region. Summing up, we have a good operational momentum across most of our businesses, we are working hard to continue improving our performance. As we look at the second half of the year, we know that some of the tailwinds we enjoyed in recent months will no longer be there. The World Cup was great, but it is over, our comparison base will get a bit tougher as we get into the final months of the year. The consumer environment remains sluggish, particularly in our core Mexico market, therefore, sustaining our momentum will hinge on our ability to continue executing our strategy. With that, let me turn it over to Martín to go over the numbers in more detail. Martín Arias: Thank you, José Antonio. Good morning, everyone, thank you for joining us today. Let me begin with FEMSA's consolidated financial results for the second quarter of 2026. Total revenues increased 9.3% year-over-year, while operating income grew 7.2%, reflecting OXXO Mexico's strong performance, contributions from our international operations, and the benefits of our restructuring initiatives, partially offset by currency headwinds, the softer performance of health in Europe, and the consolidation of losses at OXXO Brasil. Excluding the Brazil effect and on a comparable currency-neutral basis, total revenues and operating income grew 10.1% and 11.7% respectively, reflecting positive operating leverage. Net consolidated income amounted to MXN 9.2 billion, representing an increase of 64.9%. This increase was mainly explained by the operating income growth I just described and by lower net financing expenses, reflecting a significantly lower non-cash foreign exchange loss of MXN 655 million compared to a MXN 4.1 billion loss in the comparable quarter, driven by the appreciation of the Mexican peso against our US dollar-denominated cash position, reflecting a more moderate appreciation of the peso, approximately 2.2% in second quarter 2026 versus 8.4% in second quarter 2025, as well as a lower US dollar cash balance versus the comparable period. It was also impacted by a positive participation in associate results of MXN 38 million, compared to a loss of MXN 756 million in the second quarter of 2025, which reflected the results of our joint venture in Brazil, as well as the proportional results of our stake in BradyPLUS. These two improvements that I just described were partially offset by a decrease in interest income driven by lower interest rates, a lower gain from other financial income of MXN 163 million compared to MXN 633 million in the second quarter of 2025, mainly because last year included a mark-to-market gain on the Heineken shares tied to the exchangeable bond we issued when we exited that position, shares that are no longer on our balance sheet. Finally, these improvements were partially offset by a higher income tax provision of MXN 4.9 billion compared to MXN 4.3 billion in the second quarter of 2025. The effective income tax rate was 34.8% in the second quarter of 2026. As we have discussed in past calls, the difference between our effective tax rate and the statutory rate of 30% reflects non-deductible items at OXXO Mexico, specifically labor costs and other expenses, as well as non-credible tax loss effects, mainly reflecting losses at Spin. These losses decreased this quarter, and we expect them to decrease further as Spin continues its significant efforts to reduce costs, advancing towards profitability. Turning to our operating results. OXXO Mexico delivered total revenue growth of 11.8%, driven by same-store sales growth of 9.5%, with traffic growing 2% and average ticket increasing 7.4%. We also added 253 net new stores during the quarter. This strong performance was partially supported by the World Cup, particularly the four Mexico matches played in June, which drove a consumption uplift in some of OXXO's most relevant categories, and by World Cup-specific commercial initiatives, such as the Panini collectible stickers. Isolating these effects, we estimate traffic still grew by approximately 1%, and ticket increased 6.2%. While still early, these are encouraging signs that the strategic adjustments José Antonio described earlier are beginning to translate into better customer engagement and healthier underlying growth. Next quarter, you will see a more normalized number without most of the tailwind of the World Cup, and we are cautiously optimistic that while it may be lower than this quarter, we expect that it will continue to reflect progress from our initiatives. Gross margin was 44.8%, contracting 70 basis points year-over-year, mainly reflecting the impact of selected price rationalization initiatives and a higher mix of lower price point SKUs in key categories as we begin to adjust behind the customer centricity stance described by José Antonio. This was partially offset by solid growth in services and higher commercial and distribution income from key suppliers. Selling expenses grew 10.6%, below revenue growth, while administrative expenses decreased by 3.3%, reflecting our multiple initiatives to obtain expenses and drive efficiency. As a result, operating income grew 12.3%, with operating expanding 10 basis points to 10%. In sum, this quarter is a good example of the gross margin traffic and profitability algorithm that José Antonio described earlier. Selectively adjusting the value proposition to drive traffic and volume, enhancing our relevance with our customers, while enhancing profitability through operating discipline and efficiency gains. The Americas and Mobility segment delivered total revenues of MXN 28 billion, increasing 7.4% or 11.6% on a comparable and currency-neutral basis. Excluding the impact of consolidating OXXO Brazil revenues, the segment's top line benefited from a strong performance across OXXO Latam, excluding Brazil, especially in Colombia. On a currency neutral basis, same-store sales for the retail operations ex Brazil grew 17.6%. Gross margin for merchandise increased 40 basis points to 27.3% of revenues, while in the fuel operations it decreased 130 basis points to 10.9%, reflecting the inclusion of diesel and the maximum fuel price commitments at OXXO Gas, together with higher costs for gasoline and diesel in Mexico generally. Operating income was MXN 80 million with an operating margin of 0.3%, representing a decrease of 29% on a comparable basis, excluding currency translation effects and the operating losses from the consolidation of OXXO Brazil. The operating margin also reflects the impact from the diesel price commitments in Mexico, partially offset by narrowing losses across OXXO Latam, excluding Brazil. Our operations in Europe reported total revenues of MXN 14.5 billion, up 3.2% on a currency neutral basis, driven by a solid Swiss retail operation, partially offset by weak German retail and food service results across most formats, reflecting soft traffic impacted by bad weather and train route closures. Our B2B business remains sluggish in this quarter. We are reinforcing our commercial team's focus to reignite growth in this business. Regarding Valora's gross profit, let me remind you that last quarter we began reclassifying certain distribution expenses from SG&A to cost of sales, and that will be the case for the rest of the year. This change was made purely for accounting presentation purposes to better align the classification of distribution costs with the nature of the expense. There is no impact on operating income because of this reclassification. However, as a mechanical effect of this change, gross margin was impacted by MXN 230 million in the second quarter. Gross profit decreased by 6.6%, with a gross margin of 40.2%. On the same accounting presentation basis, the gross margin expanded by 40 basis points, driven by higher promotional income and a positive sales mix effect. Operating income was MXN 638 million, which on a comparable basis that excludes currency headwinds, was flat year-over-year as expense containment measures were offset by one-time expenses driven by a reorganization of Valora's management structure. Operating margin was 4.4%, representing a contraction of 20 basis points versus the previous year. For its part, the health division delivered total revenues of MXN 22.3 billion, growing 2.2% year-over-year or 4.8% on a currency neutral basis. Same store sales were positive across Colombia, Ecuador, and Chile in local currency, while Mexico continued to face headwinds. As was the case with Valora, in health, we also reclassified certain distribution expenses from SG&A to cost of goods sold, mechanically reducing gross margin by approximately MXN 543 million and reflecting the proportional shift of these expenses into cost of sales. Gross profit decreased by 8.7%, with a gross margin of 26.6%, a contraction of 310 basis points. On the same accounting presentation basis, gross margin in the second quarter contracted by 60 basis points. As we discussed last quarter, as part of our strategy to reduce exposure to the institutional business in Colombia, at the beginning of April, we notified EPS Sanitas, our largest counterparty in this channel, by a significant margin that we will not renew our agreement upon its expiration in September. Given the continued uncertainty in Colombia's healthcare system and our need to manage potential EPS insolvency risk, we recorded a non-cash credit risk provision of approximately MXN 408 million during the quarter. We will continue to actively manage this exposure, remain disciplined in our capital allocation, and keep the market informed of any relevant developments as we continue to prioritize our retail drugstore business, which has better profitability, cash generation, and more attractive long-term returns. Operating income reached MXN 346 million, a decline of 57.7% and 54.1% on a comparable basis, with an operating margin of 1.5%. Excluding the non-cash credit risk provision, operating income reached MXN 754 million, a 7.9% decrease versus last year, driven mainly by operations in Chile, where we saw profitability pressured by commercial initiatives to maintain our market position in a highly competitive environment, partially offset by strong growth in Colombia, retail, and Ecuador. Mexico continued stabilizing its operation, reducing its losses significantly versus last year. For its part, Coca-Cola FEMSA delivered a sequential recovery that highlights the strength of its diversified market presence. Across its territories, Coke continued to grow volume in most markets, gain market share, and advance its digital agenda. While Mexico continued to navigate a challenging consumer environment and the effects of the excise tax increase, Coca-Cola FEMSA's affordability strategy, segmentation, and disciplined commercial execution enabled it to further strengthen its competitive position. At the same time, South America delivered a solid quarter, Colombia and Brazil achieving record second quarter volumes that ultimately resulted in double-digit operating income growth in those business units. As always, we encourage you to listen to their earnings call hosted yesterday. On the FEMSA corporate front, as you might recall last year, we launched a corporate reorganization and savings plan, we continue to advance in this effort, making good progress and in line with our expectations. This progress reflects the benefits of a leaner structure and non-headcount saving initiatives that remain underway. At the same time, as I mentioned a few minutes ago, Spin has continued to gradually narrow its losses as its own reorganization takes hold. While it is still early, we are encouraged by the progress we are seeing and remain focused on executing the plan with discipline. Before closing, let me briefly update you on capital allocation. During the second quarter, we deployed approximately MXN 8.9 billion in CapEx, representing approximately 3.8% of total revenues and a 3.6% decline compared with last year. This was primarily driven by lower CapEx at Coca-Cola FEMSA, partially offset by continued investment in OXXO Mexico and other growth platforms. With respect to shareholder returns, during the quarter, we concluded a $300 million buyback through an accelerated share repurchase program that was launched at the end of last year. Once we consider the ordinary and extraordinary dividends being disbursed this year, the total expected capital distributions for the cycle from March 2026 to March 2027 will reach approximately 41 billion pesos. Regarding leverage, our net debt to EBITDA ratio decreased to 1.15x from 1.24x in the prior quarter. This reflected a 3.2% increase in last 12 months EBITDA, excluding Coca-Cola FEMSA, as well as a reduction in FEMSA ex-KOF net debt. The latter was driven primarily by a 2% sequential decrease in gross debt, reflecting the depreciation of the Mexican peso against our U.S. dollar-denominated debt. That said, our leverage target remains unchanged. As we look ahead, we remain focused on executing against our strategy. We are pleased with the momentum we saw in the second quarter across most of our business units. But as José Antonio mentioned, we are very aware that the external tailwinds we enjoyed will taper off soon, and we will continue to face a challenging consumer environment, particularly in Mexico. Having said that, there are many tactical and strategic levers at our disposal, and early results from our recent tests and adjustments are promising. Before we open the call for your questions, a reminder to please limit yourself to one question at a time like we did on our previous call. We received positive feedback and would like to make that practice permanent. And with that, we are ready to open the call. Operator, please go ahead. Operator: At this time, we are going to open it up for questions and answers. If you have a question, please click on raise hand for audio questions or write it down in the Q&A section for written questions. Please remember that your company's name should be visible for your question to be taken. Please limit yourself to one question at a time, and if you have a second question, please get back on the queue. We do ask that when you pose your question that you pick up your handset to provide optimum sound quality. Please hold while we poll for questions. Our first question comes from Tiago Bortoluci from Goldman Sachs. Please, Tiago, you may proceed. José Antonio Fernández Garza: Hola, Tiago. Tiago Bortoluci: Hola, José. Martín, Juan, thank you very much and congrats on the results. I would like to explore a little bit more on the Spin opportunity with you guys. Obviously, there are a lot of moving parts and a lot of growth avenues for FEMSA. More recently, I think you have delivered and announced good developments in expanding the ecosystem, right? I don't know, José, what you can give us in terms of additional information on how you are thinking about the partnership with QED, how you're thinking about using balance sheet to expand the value proposition, and what is the roadmap for evolving the ecosystem would be greatly appreciated. Thank you very much. José Antonio Fernández Garza: Thank you, Tiago. I will begin and let either Martín or Juan to help me. It's very early in the adventure with QED. We are very excited for the partnership. We had a long courtship to get to know each other, and we were quite impressed by the level of detail and all the scar tissue that these guys have developed over many, many years of developing subprime credit in all parts of the world in ecosystem very similar to ours. We really liked what they brought to the table. We had begin already using some data and sharing some of the data to them, and they were very impressed by the quality of the correlations that they were seeing between good credit and good credit responses. I think the partnership is up to a good start. The level of talent that they're able to bring, Nigel Morris and many of his partners and female partners in QED are legends in their field, they are able to attract very impressive talent, and that was very important for us. I would say as Spin continues to become more and more relevant in the ecosystem, we're at the point where we're enjoying the best of both worlds. Transactions in services are still growing in the physical world, in OXXO, even with a decline in top-ups or cell phone payments. We're still growing in cash in, cash out in the physical store. In Spin, this is growing dramatically. I think there is a moment we're in the sweet spot where Spin and OXXO can complement each other dramatically, and I think that will continue for the next several years. There's people more aggressive that things will change in the next couple or two or three years, and there's other people that think this will remain for many, many years. I think as Spin becomes more relevant, as Spin loyalty also continues to increase in number of users, and we change the game, the dynamics in which we give rewards, I think all of this is giving us a very good platform to begin monetization. We're already doing it with retail media, but now we're very excited with what could become a very interesting thing with credit. As you know, there's a lot of people trying to give credit in Mexico. There's very good players already in the space. I think we have several things that make us unique for a level of the population that still underserved. It's still, we are very conscious of the risks inherent in credit, especially in this segment, so we will proceed very slowly with our low-and-grow model, as I mentioned before. I think for now, that's all I could give, unless Martín or Juan want to complement me a little bit. Martín Arias: I would just complement with two things. José, I think you did a comprehensive job of describing all the external-looking things that are happening internally as a result of the reorganization that was undertaken. Today, both the physical and digital payments in FEMSA report to one organization. That is giving that team the ability to make judgments about changes in pricing and creating use cases that are very user-friendly, and which try to resolve some of the paradigms of having both a physical and a digital payment system. That's also happened at Spin Premia, where we've created an area of customer value management, where we're taking a broader, more holistic, integrated view of our consumer, where obviously Spin Premia is the main contact point and one of the main ways that we collect data and provide promotions to the consumer. On the credit issue, the credit over time has to become non-recourse to FEMSA. It's going to start out very small, very contained. Over time, to the extent that we can be successful, we'll start thinking about off-balance sheet financings against the portfolio of credits that we're extending. Eventually, we'll have to find sources of funding, which may include obtaining a banking license. We're still in early days. As we've promised, we'll continue to communicate this and be very transparent, the numbers really today don't really move the needle in any significant way from the perspective of the credit portfolio. Tiago Bortoluci: This is great, José, Martín. Thank you very much. José Antonio Fernández Garza: Thank you. Operator: Our next question comes from Mr. Rodrigo Alcantara from UBS. Please, Mister, you may proceed. Rodrigo Alcantara: Hello. Good morning, José, Martín. José Antonio Fernández Garza: Hola, Rodrigo. Rodrigo Alcantara: [ Non-English content] Congrats again, Pam. Welcome back, Quique. Nice to have you back. Guess I'll leave the question on gross margins to my colleagues here. I'm pretty sure they're going to ask about this. Let me ask this to you, José. It's been a while, right? You have taken the role of FEMSA Consolidated, and also you brought, or well, FEMSA brought a very high-quality guy, right, to lead the OXXO Mexico operation, right? Carlos Arroyo. My question would be on, or if you can comment on how you are shifting the responsibilities from retail to FEMSA Consolidated. What would be the main contributions in your view that Carlos has achieved so far? Anything that you may highlight that you can comment would be very helpful. Thank you very much. José Antonio Fernández Garza: Thank you, Rodrigo. That's a very interesting question. I think obviously the shift from heading Proximity and Health to shift to running FEMSA is a very dramatic shift, and I'm still on, I hope, in my early stages of that shift. I would say the biggest change in my order is I now get to spend a lot of time in big strategic discussions with all of my CEOs, but particularly a lot of time with Ian, a lot of time with the chairman and the board, a lot of time with the retail guys on drafting strategy, on shaping culture, and on building and mapping talent. That's where I spend most of my time. I would say, first of all, Carlos has much more experience in retail than I did. While I knew retail from living it and breathing it in my household, I don't come from the retail background. I got to meet Carlos. Carlos and I actually go a little bit way back when I was running Coca-Cola FEMSA Central America. Carlos ran Walmart in that region, and we used to argue a lot. I learned about his negotiating capacity, his real ability to fight every cent, to run a very lean, efficient machine, and I always liked what I see. I think what Carlos has brought beyond these things that I've already mentioned, I would say he surrounds himself with people that are smarter than him, which is a characteristic that I love about big leaders and executives. He really has surrounded himself with a stellar team. He knows the importance of a superb, I mean top one percentile supply chain capacity. I think that he comes from a good school. I will not mention which, but it's obvious. Rodrigo Alcantara: Yeah. José Antonio Fernández Garza: In understanding that supply chain, especially in the world we are entering with such competitive dynamics and where we see ourselves as underdogs, where we see ourselves that we are only beginning the race towards transforming retail in Mexico, we need a supply chain that's best in the world. While we have a very good supply chain, we didn't have a top 1%. I think Carlos is investing a lot behind that, and it's the backbone of a food strategy. It's a backbone of a grocery strategy. It's the backbone of obviously keep winning at impulse and beer and soft drinks. There's much more to say about Carlos, but I will leave it at that for now. I think those are the main contributions that he has brought. Obviously he's delivering, we're gaining share, and I like the progress we're making. Rodrigo Alcantara: No, that was great. That was what I wanted to hear. Thank you, José. José Antonio Fernández Garza: Thank you, Rodrigo. Operator: Our next question comes from Mr. Ben Theurer from Barclays. Please, Mister, the floor is now yours. Ben Theurer: Yeah. Good morning, José Antonio, Martín, Juan. Thank you very much for taking my question, as well as congrats on those very strong 2Q results. I wanted to dig in and stay a little bit within some of the strategic pillars that you've laid out at the beginning, and one that caught my attention a lot is, was all about that price pack architecture, as well as assortment optimization. Wanted to understand a little bit more of what you've kind of learned from the past, and I remember we've talked a lot about it in the past, about competitive pressure against the informal markets. I just wanted to understand what proactively you've been doing over the last couple of quarters, and where there is still room to further drive maybe traffic by just having more competitive pricing on certain categories, and if so, which categories those are. What have you done? Where are we going? Thank you very much. José Antonio Fernández Garza: Thank you, Ben. Hola, by the way. I think, look, we've always been very good in the big categories in making sure we have an assortment to tailor to everybody. Over time, we got a little bit complacent in saying, "Hey, we're so big in this." For example, we're so big in the beer category that we can allow ourselves either a little bit of extra margin in a very important SKU or we are willing to not live with this value price because it will hit our BPS or gross margin in a certain way. I think it's very smart to do from time to time, but if you overdo it, especially when you have a consumer that's more value centric, et cetera, you can begin to lose very important profitable traffic. I think that's one of the things that we've been saying in all the calls. We've been adjusting price pack to allow for certain value packs, especially in tobacco, in soft drinks, and everything. Then I think the other one, we were very good at selling prime real estate within the store, in categories that are not so relevant in the store right now, but that they were paying premium positioning to be center staged. While we recognize that we continue to do a little bit of that, especially in certain categories, it is very important, first of all, to serve our customers and meet the customers where they want to be met. That requires maybe simplifying the portfolio. Maybe we don't need 14 types of male deodorant or different brands because they all pay. Maybe we need to extract a little bit more value from certain suppliers, then have a price pack architecture that serves all of our customers. There's a type of customer that is willing to pay a two-pack of a male deodorant to go to their home, but there's someone that needs a value deodorant because they need to change. All these things are becoming more and more important in our price pack architecture. It's very hard for me to tell you a target of gross profit that we're going to hit. We are maximizing profit or income from operation, but now putting into the mix that we want to grow traffic profitably. We want to continue to expand our relevance in categories where we are not as big, like groceries and daily replenishment. That will take us on a path that over time will increase our profitability. It will increase our stickiness. We will continue to gain share, and we will monitor share against the supermarkets, against the traditional trade, against the discounters. Obviously gross profit could ebb and flow from the percentage where we are. We're really not managing for maximizing gross profit, but maximizing operating income over a multi-decade period. I don't know if that answers your thing. Ben Theurer: It does. Thank you very much. Juan Fonseca: I would just add Hi, Ben, this is Juan. Ben Theurer: Juan. Juan Fonseca: I think it's an important segue, talking about the price pack architecture and having the discussion on margins, because the message I want to be clear is this was not about lowering prices, I think with very few exceptions. I think coffee is one where we've said we've been testing things at a lower price point. Most of it has to do with bringing in those low price point in the tobacco, in beer, and snacks. Again, not lowering prices, but rather changing the mix to something that is a better match for what the consumer is asking for. That was just one clarification I wanted to make. Ben Theurer: Okay. Thank you very much, Juan. Operator: Our next question comes from Mr. Ricardo Alves from Morgan Stanley. Please, mister, the floor is now yours. Ricardo Alves: Hello, José Antonio, Martín, Juan. Hope you're all well. Thanks for the opportunity. I think that this question is, to some extent, a follow-up to the previous one. It was a quite impressive same-store sales indeed, so it's great to see the turnaround there. Now, with the 8% or near 8% ticket boost, significantly above inflation, naturally, I guess that we thought that the gross margin could have been higher. Appreciate all the commentary that was just made around the gross margin and the strategy of the company prioritizing operating income. That makes perfect sense. When we look at that number, when we look at the gross margin, our first reaction was maybe the affordability measures that we've been talking about. Juan was just mentioning the changing mix, for example. All of that could explain. When we look at your average ticket, that doesn't seem to be the answer. Beyond what we already discussed, is there something near term, I don't know, maybe on the commercial income, not on the side of the revenue on the commercial income, but discounts from suppliers? I think that José Antonio even referred to some of maybe these supplier contracts that you have, maybe commercial income is hurting a little bit more in this moment where you are adjusting the strategy. I just wanted to understand that dynamic a little bit better on the same-store sales not translating necessarily right now or the average ticket into higher gross margin as well. Thank you very much, everyone. José Antonio Fernández Garza: Thank you, Ricardo. It's a very good question, obviously. I think the quarter obviously has some things that are affecting it more than normal. First of all, you have to include that there's an excise in two of our big categories, like soft drinks and cigarettes. That could have an effect a little bit on the way the ticket is being affected. On the other end, if you look, I would say the assortment helped us a lot during the quarter, given the Panini catalog helped a little bit, and probably also had an effect on the margin, but increased the ticket. Which by the way, Panini was a record thing for OXXO, as I'm sure for many retailers across the globe throughout the World Cup. All of these things had an effect. While we are happy with the 2% traffic growth because it really changes eight quarters of missing traffic. We are happy that even during July, even the later part of July, we're still seeing good traffic numbers, even after the World Cup. We are confident that some of the levers that we pulled are working. We're not satisfied, for sure. We have a long way to go to have the traffic growth numbers that we ambition. I think the ticket should also come at the expense of, or should be balanced by doing more value-driven things, like what we're doing in expanding coffee at an attractive price and more value categories in beer and cigarettes. In general, I would say the quarter did have a few mixes that did not help the number as much as you would expect. We're still fighting with improving traffic, but obviously we had a very good quarter, given the World Cup and other tailwinds. Martín Arias: Just to complement you, José. Hi, Ricardo. The inflation that you see as the headline consumer inflation number for Mexico is not necessarily the inflation number that gets passed on in the categories that we sell through the store. You need to be a bit careful. There are categories where the cost that's being passed on by the supplier is somewhat higher than the consumer inflation that you see in the newspaper. We follow this on a quarterly basis in our quarterly meetings, where we check the cost that was passed on to us by the supplier, and the cost that we passed on to the consumer. With the exception of the categories that José mentioned, specifically cigarettes and soft drinks, where we were passing on a tax, which is not to anybody's benefit other than a tax collection for the government. In all of them, we were either passing on only what was passed on to us, or in some cases, passing slightly lower than what was passed on to us, and that could be also effect of mix on a category by category basis. Once you take that out, you take out the World Cup, the bigger ticket from people going for reunions for the parties they were having at their home, so on, and you strip that out and the benefits of that and some other mix effects of top-ups going down and financial services going up. You take that all in, we are very comfortable that we are improving significantly the affordability proposition for our consumers. Juan Fonseca: One final comment on that is that the excise tax effect will remain for the next couple of quarters as well, right, until we cycle in next January. Ricardo Alves: That makes perfect sense. That was actually helpful. Thanks, everybody. Thank you all. José Antonio Fernández Garza: Thank you, Ricardo. Operator: Our next question comes from Mr. Robert Ford from Bank of America. Please, Mr. Bob, you may proceed. José Antonio Fernández Garza: Bob? Robert Ford: Sorry about that. We want to address José Martín, Juan Quique, and congratulations on the quarter. How do you feel about price deltas and overlapping small box values in areas where investment's been made? I think Martín was moving in that direction, but I just want to get a better sense of where you are right now and how you're thinking about elasticity. As you expand that investment, how do you think about the TAM and grocery and the pantry segments? Then you haven't really touched on Brazil, but I was very curious about same-store sales in Brazil, and then the path and timeline to profitability there. Thank you. José Antonio Fernández Garza: I understood the Brazil part. Can you repeat the first one? Sorry. Robert Ford: Sure. No. I was probably speaking too quickly, but it was really about the price deltas that you have with overlapping competitors, whether it's the informal segment, convenience stores and other channels. How are you thinking about your price gaps right now in areas where you've made investment? Do you feel that you're at an equilibrium, or do you think there's a need to make some additional price investment? How should we think about the price elasticity in those areas? As you expand, and I think what I'm hearing is you're going to expand that activity in opening price points and price investments selectively in other categories, right? You mentioned grocery and pantry segments, and I was just curious how you're thinking about the addressable market in those areas as well. José Antonio Fernández Garza: Okay. No, very clear. Thank you, Bob. I would say, first of all, when we look at a price point in our business, we have to look at the overall cost of going to an OXXO store and being served versus going to a supermarket chain or driving or getting on a bus to go to longer distance. We also compete against the mom and pop and the discount store, we put all those categories into play. We sell the coldest beer probably out there, even more than the retailers owned by the beer guys. We put all that into the equation. What we want is to be able to have a price pack architecture that tailors the top income segment of Mexico, but also the bottom 10% and 20% incomes segment of Mexico. That's very evident across our core categories, our impulse, where we make the big growth of our categories, beer, soft drinks, snacks, tobacco. In those categories, we are so well-known, we are so well-liked that we are willing to have some price differentiation. I think we are already where we want to be in the core traffic drivers like the 16-ounce Coca-Cola bottle or the six-pack of beer of a leading beer brand. I'm not supposing we're going to have any price contraction there other than mix. We may introduce value brands at a very attractive price, but we are not seeing a big cannibalization effect in those. Where we do need to be much more aggressive is as we expand into the pantry development. We are not the winners there. We are not well-known. First of all, maybe we don't need a 12-pack of eggs, but we need to have a very competitive price six-pack of eggs. We will have the best price, much better than the traditional trade, and maybe in par with some of the discounters in certain categories as we become well-known that for daily replenishment, OXXO is a much better alternative than the corner store or even some of the discount stores. We will go all in winning our space in pantry. I know I'm not only talking to investors when I say we're going all in. In terms of OXXO Brasil, it's too early. We're getting better and better. We're improving. We have been growing double digits over the last couple of years, double-digit revenues. We had a slowish quarter where we grew mid-single digits same-store sales. We are still iterating the model. I think OXXO Brasil, what we like is that every cohort, every new generation of stores keep getting better and better. We think it's going to take us a few years, but eventually we're going to find a sweet spot when we can accelerate expansion as we feel Colombia is ready now. Colombia now can really accelerate, and hopefully we will begin to show an increasing faster pace of growth in Colombia. I hope that answers you, Bob. Robert Ford: No, it does, very exhaustively. Thank you so much. Operator: Our next question comes from Mr. Alejandro Fuchs from Itaú BBA. Please, Mr., you may proceed. José Antonio Fernández Garza: Hola, Alejandro. Alejandro Fuchs: Hola, José Antonio, Martín, Juan, Pamela, Enrique. Thank you for the space for question and congratulations on the results. My question is on OXXO Mexico. Wanted to maybe take you back, José Antonio, to the end of last year when you guys were preparing the budget for this year and seeing all of these changes that you wanted to make, right? I think that it was very clear, the four pillars. Can you elaborate maybe, José Antonio, which of the pillars or which of the changes are working better maybe than you expected? And maybe which ones do you think there's opportunity to maybe even improve more when we look at this very strong same-store sales and traffic performance? Thank you. José Antonio Fernández Garza: Again, I think I'm still confident that the pillars will all work out, and I'm seeing positive signs in all of them. Obviously, I will tell you on impulse, becoming excellent or best in class in something that you were already great but now you're becoming best has become the one that most quickly turned the needle. We're gaining share like never before in beer. We're gaining share in tobacco. We're gaining share in soft drink. In what we are already well-known for We are doing very well, even in the first quarter, and obviously continuing with the second quarter, probably helped by the World Cup. The World Cup was there for many of the ANTAD and other supermarkets, and we clearly won a lot of market share in our core categories. I think we have a few trials in foodvenience and daily replenishment. The both trials include execution things, assortment things, and pricing things. Foodvenience, especially on coffee, just getting coffee right, which is probably the easier part because we are already well-known in coffee, is showing the biggest dramatic increase. We still have a long way to go in developing what we call hero products that OXXO can get very well known for, can use its scale to get very good quality, good pricing, and really feed millions of hungry Mexicans. I think that's still going to take a lot of time, and it requires a lot of infrastructure that we need to build in the supply chain and the supplier infrastructure side. I think daily replenishment, in one end, it's the one that you can start more quickly even than foodvenience with pricing, even if you don't have the market ready for it. We are doing some trials in certain parts of Mexico with promising results, but I think it's further down the line in terms of really moving the needle. It's going to take us longer. What we call beyond trade, I'm really excited by what we are seeing in terms of encouragement of the new things coming in the pipeline for Spin Premia, for Spin by OXXO. Just by itself, it's getting a lot of momentum, and we are reducing our expenses there dramatically and still providing new and exciting products. I think we're off to a good start. Alejandro Fuchs: That was super clear. Muchas gracias, José Antonio. Juan Fonseca: You know what? I'd just like to add, Alejandro, obviously, we've just been talking about the drivers for top-line growth, but I also think, looking at the overall results, everything that happened below the gross margin. To have a small contraction at the gross, but actually a small expansion at the operating level and at the EBITDA level, there's a lot of work that's being done on the expenses side, on the cost side, on the efficiency side, that we've spoken about before in terms of these programs that are in place regarding corporate overhead and regarding all kinds of efficiencies on the labor front. Just to highlight that. It hasn't just been the top-line efforts, which obviously, that comes first, but also the work that's being done behind the scenes that's helping us to put out what I think is a very well-balanced quarter for OXXO Mexico. Alejandro Fuchs: Absolutely. Muchas gracias, Juan. Operator: Our next question comes from Mr. [Héctor Ugatchu] from Scotiabank. Please, you may now proceed. Speaker 10: Hola, José, Martín, Juan, Quique. Sorry, I'm Héctor Maya. I don't know what happened there. Thank you for taking me. José Antonio Fernández Garza: Hola, Maya. Speaker 10: Yes. Thank you. On OXXO, I understand your strategy is different with core categories and value packs and pantry. Just wanted to know if you could give us a bit more clarity on how much further could you be willing to invest gross margin to keep gaining share by category. With this, how do you expect your mix to maybe change, if any, in the long term, considering your focus on operating income optimization? Thank you. José Antonio Fernández Garza: It's a very good question, Maya, it's a very one that, at least for me, is very hard to answer. We like our P per Q for this quarter. We are willing to give gross margin if we see profit go up and if we see our operating income continue to go up. This is a very long-term race. We're getting into very competitive world. We like that we enter this cycle of continue to grow market share in our core categories, beginning to grow market share in pantry, in what we call daily replenishment consumer occasions, which obviously has a lot of house and basics of pantry. We see our gross profit as a little piece of a very big profit pie that starts with the FMCG and goes all the way to the consumer pockets. We think our gross profit is a very small part of that because we see the enormous amount of profits that come from the FMCGs. All FMCG companies that you know and that you guys cover, all the big ones name Mexico as one of their top five markets, especially the ones that are big relevant in our categories. Beer, soft drink, snacks. We see a long way to go in terms of gross profit still. What part of that gross profit we want to invest it in giving more value to some consumers that we see that could really benefit from OXXO serving them a half a dozen eggs at a very attractive price, or other traffic drivers that could be profitable, but that we're willing to give margin. Impossible for me to give you a number. What I can tell you is that I still see the FMCGs in Mexico one of the most profitable stories in the world, and I think we can get a little bit of a bigger share as we continue to grow three stores a year in OXXO plus maybe one and a half stores a day in Bara. We have a lot of potential. A number, I am optimistic on that front on the net income side. Speaker 10: Super. Thank you very much, José. Thank you. Operator: Our next question comes from Mr. Antonio Hernández from Actinver. Please, Mr., the floor is now yours. Antonio Hernández: Hi. Good morning. Thanks for taking my question. Congrats on your results. Very solid ones. Just a quick one regarding prepared food and coffee. Would you please share how much of a share do they account for at OXXO Mexico in terms of revenues, and if you have a specific target, and how do you see it profit-wise? Thanks. José Antonio Fernández Garza: We're not ready to give a big, precise number on coffee, but we're growing double digits in revenue in coffee. It's a growth category for us, even though we reduce prices. More and more Mexicans are recognizing OXXO has very good quality coffee and a very good price point. We like what we see. We have a long way to go in terms of the percentage of food service in OXXO Mexico. It's in the mid-single digits. While in other parts of our operations, like Colombia or Europe, it's in the mid to high mid-teens. We have a long way to go, and our ambition is to get at least towards what Colombia has. I hope that answers enough, Antonio. Antonio Hernández: Yes. Thanks. That's very helpful. From a profitability perspective, is there a big difference between how you see foodvenience or prepared food here in Mexico versus Colombia and Europe? How do margins differ? José Antonio Fernández Garza: In all those places and in Mexico, they're highly accretive. Once you are able to control shrinkage, food becomes a very good profit driver for all of our operations. From what I see, other operations I study across the world in convenience, if you do food right, it becomes highly accretive. Even for a very profitable chain like OXXO Mexico, food can become a good source of traffic, of revenue. Antonio Hernández: Perfect José Antonio Fernández Garza: Retain profits. Antonio Hernández: Perfect. Thanks a lot. Appreciate it. Have a nice day. José Antonio Fernández Garza: Thank you, Antonio. Operator: Our next question comes from Mr. Emiliano Hernández from GBM. Please, Mr., you may now proceed. José Antonio Fernández Garza: Hola, Emiliano. Emiliano Hernández: Hola, José Antonio, Martín, Juan. Congrats on the results, thanks for the space for questions. Just a quick one on Proximity Europe. Results have been broadly resilient, but maybe looking ahead, where do you see the biggest opportunities to accelerate growth over the medium term? Is it starting maybe in store expansion, maybe continue to redefine the value proposition or something else? More broadly, how should investors think about this medium-term strategy, and how do you think about this business as a growth driver in five years? Thank you very much. José Antonio Fernández Garza: We are very excited from what we have been able to do in Europe so far in terms of increasing promotional income and net profits dramatically, especially in our retail operation in Switzerland. In Germany, in the retail side, we continue to gain significance and dominance. We've been growing, especially through fuel operator agreements. We just signed another agreement with a fuel operator in Austria to operate 200 stores. We like that asset-light model for expansion in Europe. We're seeing opportunities to expand with other fuel operators that recognize themselves as not very good at the store and need a partner like us that are not big in fuel but can become very good operators. We are obviously monitoring carefully all opportunities across Europe, but our main focus right now is our obsession to continue to expand our Mexico and South America operations, where, again, we see ourselves as small and underdogs compared to much larger retail players in the region. That's our main expansion, but pursue opportunistically throughout Europe and even North America, but we're not close to anything right now. Emiliano Hernández: Gracias, Antonio. Appreciate the time. José Antonio Fernández Garza: Thank you, Emiliano. Operator: Our next question comes from Mr. Froylan Mendez Solther by JPMorgan. Please, mister, you may now proceed. Froylan Mendez Solther: Hola, José and Martín. José Antonio Fernández Garza: Hola, Froylan. Froylan Mendez Solther: [Non-English content] I want to ask if you could help us frame the degree of normalization that we should expect in second half in OXXO Mexico, both in terms of same-store sales and gross margin, given all the discussion that we have had. Can you help us understand second half, what should be something expected in terms of same-store sales normalization, gross margin normalization, just to understand the seasonality versus the actual run rate, especially under the weak consumer environment. Thank you. José Antonio Fernández Garza: Froylan, I will let Juan and Martín help me with guidance towards the second half. I am cautiously optimistic, but we still see a softer consumer and obviously the World Cup is over. I think the most I can say is what I already said in my comments. We're working hard to make sure the hangover is not so hard and we continue to gain share. I will let Martín and Juan complement me. Juan Fonseca: Hey, Froylan, this is Juan. I think forecasting the next six months is in many ways like forecasting the next five years, right? Lots of things could happen. Historically, as you know, we've defaulted to, I hate to call it algorithm because it's too basic to be an algorithm, generally our same-store sales tend to grow at inflation plus one, right? If you look at a kind of long enough time series. We can make the case that the consumer in Mexico is perhaps a little bit softer than normal, that would be an argument against the inflation plus one. On the other side, José mentioned this a few minutes ago, we're actually looking at pretty good numbers in the last few weeks, right? Even post-World Cup, the second half of July is looking a little bit better than we thought. I guess we have a few arguments for, a few arguments against. At the end of the day, the mid-single-digit is where we tend to land on a normalized series. If inflation is going to be close to four, same-store sales should be close to five. I know that's kind of a soft answer, there's enough uncertainty that I don't think we can be more granular than that. Froylan Mendez Solther: Gross margin, Juan, any thoughts? I also believe that part of the, let's say, the incremental gross margin that you had came from retail media. You were able to give some back to the consumer, et cetera. Second half in that specific metric, what are the- Juan Fonseca: I think it's important to remember that the commercial income is still there, right? The big CPGs, the relevance of OXXO for them, every day keeps getting bigger because we have more stores. In many ways it's within our control, right? José and Martín spoke in their remarks about this balance that we're going to go for trying to obviously reduce the gross margin as little as possible, ensuring that the EBIT margin continues to grow gradually, it's going to be a little bit of hit and miss. I think if you look at the second quarter, if you can take out the one-offs, the World Cup stuff, I think that's what it should look like, right? That gross margin contraction could be smaller than what we saw this quarter. I suppose there will be quarters where it could be a little bit higher. At the end of the day, the levers are there, and they're for us to manage, which is it's really good to have so many of the variables within our control. Froylan Mendez Solther: Perfect. Thank you very much. Juan Fonseca: Thank you, Froylan. Operator: Our next question comes from Mr. Alvaro Garcia from BTG Pactual. Please. José Antonio Fernández Garza: Hola, Alvaro. Operator: You may proceed. Alvaro Garcia: Hey, gentlemen. Thanks for the space for questions. Hey, José, how are you? I was wondering, I have a strategic question on labor in OXXO Mexico in the context of sort of solving for operating income growth, which you mentioned earlier. Given all the emphasis on recovering traffic and foodvenience and coffee, it would seem that you need better staffing or higher average staffing over the medium term. I was wondering if you could maybe comment on how you're thinking about that third shift and how you're thinking about people, in the context of having more people at OXXO. José Antonio Fernández Garza: It's a very relevant question, Alvaro, because it's obvious that, as we continue to look at our value proposition, it's clear that our value proposition is very uneven at certain times of the day. Obviously, the third shift, as it lost a little bit of relevance, it became like a self-fulfilling cycle that since it was becoming less relevant after COVID. We closed a lot of third shift options, or we closed the door. To be honest, the OXXO system and the consumer expects an OXXO that's open 24 hours in most places, not always, but most places, the store should be open 24 hours with two people serving the store, one for cleaning and taking inventory and receiving suppliers, and one for servicing the customers, at least. We let that slip in many regions. We were squeezing as much or trying to reduce our operating head in many places, I think we overdid it. We are going back to many regions and looking store by store, many of them really deserve a very well-staffed third shift. That will increase at the beginning our SG&A, it will also increase our traffic. What we're seeing, interestingly, in the places we did a big third shift reopening in the northeast of Mexico, what we saw is that the first shift starts gaining traffic and sales. Because obviously, the store is very savvy at using the third shift for getting the store very ready for the first shift. We are going to continue to do that. The store deserves at least two people for most of the third shift. That will increase SG&A, overall, over time, the value proposition should stand. Obviously, as cost of labor continues to increase and labor reduction, these things could change here and there. Our commitment should be to invest ahead of time in processes that allow us to retain that level of service, and that level of commitment without significant increase, or at least trying to mitigate the labor increase costs as much as possible. The rest of it, obviously, try to negotiate with our suppliers to compensate with gross margin. I think it's a whole balance of things that we will continue to do so. The labor thing pressure will continue to rise with the regulations, we feel confident that we have the right price mix and the right level of service to tackle that. As we continue to gain share, we feel confident that we will be able to cover most of it. I don't know if I answered you, Alvaro. Alvaro Garcia: Yeah, that was great. I hate to do this, I do want to follow up with just a clarification, which is, you mentioned in your prepared remarks, the 60% uplift at OXXO Mexico that was tied to the World Cup. I was just wondering if you can clarify if that's on a traffic basis or on a full-fledged same-store sales basis. That would be helpful. José Antonio Fernández Garza: I mentioned it on a traffic basis. To be honest, it is hard to measure it very carefully. If we had not done anything, if Carlos and all the management would have gone and not move any levers and we continue on the back slide, we probably would have lost another point of traffic, and without the World Cup happening, just because of seasonality, of the little bit of bad weather in certain parts of Mexico, in some insecurity. If you put all of that continuous slide or decreasing traffic in top ups, by not doing anything, I think we probably would have lost 1%. We made that and another two points, mostly because the World Cup helped, mostly because of Panini, which comes from the World Cup, also helped a lot. Also because we increased market share in many categories. As you can see, we gained share across most retailers, across Nielsen, across every way you measure it, we gained a lot of share. I think we liked what we were able to deliver, although I hope to start to see more traffic gains after the World Cup, which I hope that we can sustain it. Alvaro Garcia: Awesome. Thank you very much. Really appreciate it. Martín Arias: Yeah, a data point, also encouraging is we seek to track market share relative to different channels. We continue to see that doing well for us, particularly relative to the bigger formats. Curiously, traditional trade is also doing well and recovering relative to previous measurements that we've had. That does give us confidence that the World Cup helped everybody, and it seemed to have helped us equal to or slightly better than other channels. That gives us some confidence that this is not just World Cup related. Alvaro Garcia: Very clear. Thank you. Operator: Our last question comes from Mr. Carlos Laboy from HSBC. Please, mister, you may now proceed. José Antonio Fernández Garza: Hola, Carlos. Carlos Laboy: Hola, José. Thank you for this time. José, I don't think there's a bottler in the last 34 years that's positively impacted the next frontier capabilities and the economic model of the Coke system more than Coke FEMSA. As you've settled into your job here, I'd like to understand a little better, what's your vision and ambition for the bottler as you think out over the long term? José Antonio Fernández Garza: Thank you, Carlos. I am obviously biased, but I agree with you on the huge impact of Coca-Cola FEMSA in the Coke system, and other Latin American bottlers. Obviously, I've been following Coca-Cola FEMSA since 1993 very closely. I've never seen a more interesting future for Coca-Cola FEMSA in both the organic and the inorganic front. If you see organically, as you well know, Carlos, we have a huge opportunity for Venezuela again. That keeps me incredibly excited. The level of commitment for Coca-Cola FEMSA to invest behind Venezuela is incredible. What we're doing in Colombia is, I've never seen numbers like that in decades. Maybe Guatemala for a while. We're entering a cycle of market share gains, but also profitability plus scale, plus investing. The level of alignment with the Coca-Cola system has never been there before. The digital tools that we have in Coca-Cola FEMSA, I wish I could take some of that to OXXO. I'm learning just by seeing how the supervisor in Coca-Cola FEMSA has become almost a microeconomic expert with the digital tools that it has at its disposal. Coca-Cola FEMSA is set for a very brilliant future in organic growth. It's now becoming very clear that the Coca-Cola system, from what I sense, feels comfortable with big bottlers much more than ever before. The management in the Coca-Cola system is a Coca-Cola system that rewards and wants to see. This is my supposition, but I think there's been public comments from Coke executives around that. I think there is an upcoming future where I would love to see Coca-Cola FEMSA be a big part of the consolidation that I think could take place in Latin America. We will do anything that requires us to be part of that success. Carlos, I know you would love to hear me say something much more sensible, but that's all I can say for now, Carlos. We're very excited for Coca-Cola FEMSA. I'm very excited for its future. Carlos Laboy: That's very helpful. Thank you, José. José Antonio Fernández Garza: Let me just clarify, because I was corrected by Juan Fonseca, OXXO Brazil grew same-store sales in the double digits the last quarter. It was growing in the high teens, and now it's growing in the low teens. OXXO Brazil is still growing. Sorry for that mistake earlier. Juan Fonseca: No worries, José. Really, we have spoken in the past about how the whole period of unwinding the JV and prior to that, conversations with a partner. Clearly the last year or so was not a typical year, but it is remarkable. We did slow down the opening of new stores because of that. It is remarkable that they've managed to keep the same-store sales in the double digits recently. Thank you. José Antonio Fernández Garza: Thank you, everyone. Operator: This concludes the questions and answers section. At this time, I would like to turn the floor back to Mr. Fonseca for any closing remarks. Juan Fonseca: Thanks, everyone, for joining us today. Obviously, the team is always available for follow-ups and any question that might have gone unanswered today. Other than that, have a great rest of your week. Operator: Thank you. This does conclude today's presentation. You may disconnect now, and have a nice day. Before you buy stock in Fomento Económico MexicanoB. De C.v., consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Fomento Económico MexicanoB. De C.v. wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool recommends Fomento Económico MexicanoB. De C.v. The Motley Fool has a disclosure policy. FEMSA (FMX) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

- Interested in Fomento Economico Mexicano S.A.B. de C.V.? Here are five stocks we like better. - FEMSA delivered solid third-quarter growth: Revenue rose 9.8% and operating income increased 9.9%, while net income surged 81% to MXN 10.6 billion, helped by operating performance, favorable comparisons and a foreign-exchange gain. - OXXO México showed improving momentum: Same-store sales grew 9.2%, driven by a 3.5% traffic increase and a 5.5% higher average ticket. FEMSA is pruning underperforming stores while prioritizing expansion of its Bara discount format. - Management remains cautiously optimistic: FEMSA announced a new share-repurchase program alongside planned MXN 41 billion in dividends, but cited soft Mexican consumer conditions, Brazil volatility and tougher comparisons ahead. - Coca-Cola EuroPacific Partners is a tasty play on Coke Fomento Economico Mexicano (NYSE:FMX) reported third-quarter 2026 revenue growth of 9.8% and operating income growth of 9.9%, supported by results at OXXO México and Coca-Cola FEMSA, while management highlighted an improving traffic trend at its Mexican convenience-store chain. Net consolidated income totaled MXN 10.6 billion, up 81% from a year earlier. CFO Martín Arias said the increase reflected operational performance, a favorable comparison with a prior-year loss from discontinued logistics operations, and a MXN 1.1 billion non-cash foreign-exchange gain. Those factors were partly offset by lower interest income, losses on financial instruments at Coca-Cola FEMSA Brazil, and a higher income-tax provision. → Comfort Systems Earnings: AI Slowdown or More Growth Ahead? On a comparable, currency-neutral basis, FEMSA said revenue increased 9.4% and operating income rose 13.4%. CEO José Antonio Fernández Garza said OXXO México's same-store sales increased 9.2% during the quarter, driven by a 5.5% increase in average ticket and a 3.5% gain in average traffic. Traffic growth was 150 basis points above the second-quarter level, despite limited benefit from the World Cup, he said. → A 70% Rally Isn't Chord Energy's Only Selling Point Fernández Garza characterized traffic as the quarter's main highlight, noting that average-ticket growth was nominal and included the effects of higher excise taxes on soft drinks and cigarettes. He said OXXO gained market share across relevant trade channels through August, particularly in its core impulse categories. The company attributed the improvement to its strategy focused on four areas: impulse purchases, food service, daily replenishment, and services. Food-service traffic grew at a low double-digit rate, led by coffee, while early tests of the company's Canasta OXXO offering of everyday essentials at accessible prices were modestly additive to traffic, management said. → Not All Tech Is Getting Crushed: 5 Names Holding Up Through the AI Sell-Off OXXO México revenue grew 10.3%, while operating income rose 5.8%. Operating margin contracted 40 basis points. Gross margin declined 120 basis points, although management said the comparison was affected by an unusually high concentration of commercial income in the prior-year period. On a normalized basis, gross-margin contraction would have been in line with the 70-basis-point decline in the second quarter, according to the company. OXXO México closed 140 older underperforming stores during the quarter as part of a broader pruning plan involving about 250 locations. The closures reduced operating margin by roughly 20 basis points; excluding the effect, operating income would have increased 8%, Arias said. FEMSA expects a similar impact in the fourth quarter as it completes the effort. Year to date, OXXO México added 734 stores and closed 272, for a net increase of 462 stores. Arias said the company will likely fall short of its annual run rate of 1,000 net new stores this year, but maintained that target for next year and beyond. Bara, FEMSA's discount-store format, delivered same-store sales growth of 10.3% and added 112 net new locations in the quarter. Fernández Garza said newer stores are maturing faster than legacy locations in the Bajío region, while the company expects to open more stores next year than it does this year. Management described Bara as a major expansion priority, with Investor Relations Director Juan Fonseca saying its store base could grow more than 30% next year. The company said its focus is on improving private-label offerings, simplifying assortments, and building a cost-efficient operating model. Arias said newer Bara stores have reached break-even quickly even before reaching full maturity. In Latin America, the Americas & Mobility segment generated MXN 29.5 billion in revenue, up 18.1%, or 10.9% on a comparable, currency-neutral basis. The company cited healthy volume growth at OXXO Gas and strong performance in Colombia, where mature-store traffic rose at a high single-digit pace. OXXO Brazil posted a 5.1% increase in currency-neutral same-store sales, though the operation continued to weigh on consolidated profitability. Management said Brazil remains a significant opportunity but that expansion will be more cautious as the company navigates a 40-hour workweek and two-day-off requirements. FEMSA plans to add about 70 net new Brazilian stores next year, or roughly more than one per week. Colombia, meanwhile, is ready for faster expansion, Fernández Garza said, provided the company can maintain store quality and operational capabilities. FEMSA's Europe division reported revenue of MXN 14.1 billion, down 5.2% year over year but up 4% on a currency-neutral basis. Swiss retail performed solidly, while German retail and food service were affected by train-route closures and extreme weather that hurt train-station traffic. Operating income fell 24.8% to MXN 531 million. The health division posted revenue of MXN 22.9 billion, up 7%, though operating income declined 63.2% to MXN 319 million. The results included an additional MXN 430 million non-cash credit-risk provision tied to uncertainty in Colombia's healthcare system and the company's institutional-business exposure. Excluding that provision, operating income was MXN 749 million, down 14%, with pressure from competitive initiatives in Chile partly offset by retail growth in Colombia and Ecuador. Coca-Cola FEMSA reported 10.9% revenue growth and a 15.4% increase in operating income. Arias said operating income would have increased 7.4% excluding a one-time insurance-claim benefit. Mexico volumes remained resilient after the impact of excise-tax increases, while Colombia and Brazil delivered robust volume growth and double-digit operating-income growth. FEMSA deployed MXN 9.4 billion in capital expenditures during the quarter, equal to about 4% of revenue and down 28.3% from a year earlier, primarily because Coca-Cola FEMSA reduced spending after prior investments to expand capacity. The company also announced a new share-repurchase program, in addition to approximately MXN 41 billion in ordinary and extraordinary dividends planned for the current distribution cycle. FEMSA said it has distributed MXN 30 billion of that amount, with the remaining MXN 11 billion expected early next year. Net debt to EBITDA excluding Coca-Cola FEMSA was 1.19 times at quarter-end, or about 1.3 times on a pro forma basis after accounting for dividend payments. The company maintained its leverage objective of approximately two times net debt to adjusted EBITDA excluding Coca-Cola FEMSA. Management said it remains encouraged by momentum across most businesses but continues to see a soft consumer environment in Mexico, volatility in Brazil, and increasingly difficult comparisons ahead. FEMSA plans to provide more details about its 2027 plans during its next earnings call. Fomento Económico Mexicano, SAB. de C.V. (FEMSA) is a Monterrey, Mexico-based multinational company with operations focused on beverage bottling, retail and related consumer services. The company traces its origins to 1890, when it was established as a brewery in Monterrey, and has since developed into one of Latin America's largest consumer-facing businesses. FEMSA's principal beverage business is Coca-Cola FEMSA, which produces, markets, sells and distributes Coca-Cola trademark beverages and other nonalcoholic drinks. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Fomento Economico Mexicano Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Fomento Economico Mexicano, S.A.B. de C.V. FMX, or FEMSA, is slated to report third-quarter 2026 earnings on Oct. 28. The company is likely to have witnessed top- and bottom-line growth in the quarter under review. The Zacks Consensus Estimate for FMX's third-quarter revenues is pegged at $13.5 billion, indicating growth of 15.1% from the year-ago quarter's reported figure. The consensus estimate for FMX's quarterly earnings of $1.18 per share suggests a rise of 34.1% from the year-earlier quarter. The consensus estimate for earnings has moved down 3.3% in the past 30 days. In the last reported quarter, the company delivered an earnings surprise of 13.4%. It has delivered a negative earnings surprise of 0.2% in the trailing four quarters, on average. Fomento Economico Mexicano S.A.B. de C.V. price-eps-surprise | Fomento Economico Mexicano S.A.B. de C.V. Quote FEMSA's quarterly results are likely to reflect gains from growth across its business units, backed by effective growth strategies. Its growth strategy is focused on strengthening its convenience-store business, expanding internationally and enhancing its digital capabilities. FMX has been investing in operational improvements and store openings, aiming to build scale and improve profitability. The company continues to strengthen OXXO Mexico through improved customer engagement, store expansion, affordability initiatives and better operating discipline. Management is particularly focused on increasing sales of coffee, breakfast items and daily replenishment products while continuing promotional and pricing initiatives to attract consumers. Digital platforms, including Spin by OXXO and Spin Premia, are expanding the company's customer ecosystem and supporting longer-term opportunities. Through Spin by OXXO, the company is developing an omnichannel ecosystem that combines payments, financial services, loyalty programs and personalized promotions. Its digital wallet, Spin by OXXO and loyalty platform, Spin Premia, are seeing rapid user growth and rising engagement. These tools are turning OXXO stores into important hubs for financial and digital services, helping FEMSA deepen customer relationships and create revenue streams. Coca-Cola FEMSA and international retail operations provide additional diversification. FEMSA continues to develop its international proximity platform through a broader geographic footprint and greater focus on store economics. However, FEMSA continues operating in a cautious consumer environment in Mexico, which remains an important factor for OXXO performance. Although OXXO Mexico returned to positive traffic growth in second-quarter 2026, management noted that the broader consumer environment remains soft and expects the second half of the year to be more subdued without the benefit of the World Cup contribution. Sustaining traffic growth will depend on continued execution of commercial initiatives and affordability actions. FEMSA also faces ongoing margin management challenges across several businesses as it balances growth investments, commercial initiatives and operating discipline. Our proven model does not conclusively predict an earnings beat for FEMSA this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chance of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter. FEMSA has an Earnings ESP of 0.00% and a Zacks Rank of 3. The recent market movements show that FEMSA's shares have risen 34.2% in the past year compared with the industry's growth of 19.9%. Image Source: Zacks Investment Research From the valuation standpoint, FEMSA is trading at a forward 12-month P/E multiple of 22.34X, exceeding the industry's average of 20.09X. Image Source: Zacks Investment Research Here are a few companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle. Altria Group MO has an Earnings ESP of +0.26% and a Zacks Rank of 2 at present. MO is likely to register top- and bottom-line growth when it releases third-quarter 2026 results. The consensus estimate for Altria Group's quarterly earnings stands at $1.51 per share, suggesting 4.1% growth from the year-ago quarter's actual. The Zacks Consensus Estimate for its quarterly revenues is pegged at $5.3 billion, implying a rise of 1% from the year-ago quarter's reported figure. MO has a trailing four-quarter average earnings surprise of 1.3%. You can see the complete list of today's Zacks #1 Rank stocks here. The Estee Lauder Companies EL currently has an Earnings ESP of +3.75% and a Zacks Rank of 2. EL is anticipated to register top- and bottom-line growth when it reports third-quarter 2026 results. The Zacks Consensus Estimate for Estee Lauder's quarterly revenues is pegged at $3.7 billion, indicating growth of 4.8% from the figure reported in the year-ago quarter. The consensus estimate for Estee Lauder's earnings is pegged at 52 cents per share, suggesting a 62.5% surge from the year-ago quarter's actual. EL delivered an earnings surprise of 41.4% in the trailing four quarters, on average. Newell Brands Inc. NWL has an Earnings ESP of +2.26% and a Zacks Rank of 3 at present. NWL is likely to register top- and bottom-line growth when it releases third-quarter 2026 results. The consensus estimate for Newell Brands' quarterly earnings stands at 20 cents per share, implying a 17.7% rise from the year-ago quarter's reported number. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.85 billion, implying a rise of 2.5% from the year-ago quarter's actual. NWL has a trailing four-quarter average earnings surprise of 40%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report Newell Brands Inc. (NWL) : Free Stock Analysis Report Altria Group, Inc. (MO) : Free Stock Analysis Report The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

MONTERREY, Mexico, Oct. 01, 2026 (GLOBE NEWSWIRE) -- Fomento Económico Mexicano, S.A.B. de C.V. ("FEMSA" or the "Company") (NYSE: FMX; BMV: FEMSAUBD, FEMSAUB) is pleased to invite you to participate in its Third Quarter Conference Call that will be held on: Wednesday, October 28, 2026 11:00 AM Eastern Time (9:00 AM Mexico City Time) To participate in the conference call please register at the following link: Registration: FEMSA Conference Call | 3Q26 The quarterly results will be released on October 28 before markets open. The conference call will be live through our Zoom link. For registration, please visit https://bit.ly/FEMSA_3Q26 If you are unable to participate live, the conference call replay will be available on http://ir.femsa.com/results.cfm About FEMSA FEMSA is a company that creates economic and social value through companies and institutions and strives to be the best employer and neighbor to the communities in which it operates. It participates in two core sectors, retail and beverages. In retail, FEMSA is present through four divisions: i) OXXO Mexico, operating the largest small-format store chain in Mexico; ii) Americas & Mobility, which includes its OXXO convenience store operations across Latin America and the United States, as well as its gas station business in Mexico and the United States; iii) FEMSA Europe, operating convenience and foodvenience formats in five European countries; and iv) FEMSA Health, which includes drugstores and related activities in four Latin American countries. In Mexico, OXXO's operations are enhanced by, and comprise a customer-focused ecosystem with Spin, a digital platform that leverages the OXXO store network to provide Mexican consumers with access to digital financial services, including Spin by OXXO and Spin Premia, among other initiatives. In the beverage sector, FEMSA participates through Coca-Cola FEMSA, the largest franchise bottler of Coca-Cola products in the world by volume. Across its business units, FEMSA has more than 369,000 employees in 18 countries. FEMSA is a member of the Dow Jones Best-in-Class World Index & Dow Jones Best-in-Class MILA Pacific Alliance Index, both from S&P Global; FTSE4Good Emerging Index; MSCI EM Latin America ESG Leaders Index; S&P/BMV Total México ESG, among other indexes. CONTACT: Investor Contact(52) [email protected] Contact(52) [email protected]

Anheuser-Busch InBev SA/NV BUD, aka AB InBev, reported second-quarter 2026 results, wherein earnings per share and revenues missed the Zacks Consensus Estimate. Both top and bottom lines were flat year over year.BUD reported second-quarter 2026 underlying earnings of 98 cents per share, flat year over year. The figure missed the Zacks Consensus Estimate of $1.09 by 10.1%. Revenues of $15 billion were flat year over year and missed the consensus mark of $16.29 billion by 7.9%.Shares of this Zacks Rank #3 (Hold) company have gained 12.3% in the past three months compared with the industry’s 7.4% growth. Image Source: Zacks Investment Research On an organic basis, revenues increased 5.6% in the quarter. Revenue per hectoliter rose 4.2%, reflecting disciplined revenue management and a favorable mix from premiumization and Beyond Beer products.Total volumes increased 0.9% organically. Beer volumes rose 1.1%, while non-beer volumes declined 1.1%. The company recorded its highest-ever second-quarter volumes in Mexico, Colombia and Ecuador, while beer volumes in Brazil returned to growth.Combined revenues from AB InBev’s megabrands increased 6.2%. Corona revenues grew 17% outside its home market, while Stella Artois and Michelob Ultra advanced 19% and 21%, respectively, outside their domestic markets.The above-core beer portfolio generated 6.9% revenue growth. Corona delivered double-digit volume growth in 37 markets, while Michelob Ultra expanded across Latin America. About 40% of Michelob Ultra’s volume growth came from markets outside the United States. Anheuser-Busch InBev SA/NV price-consensus-eps-surprise-chart | Anheuser-Busch InBev SA/NV Quote No-alcohol beer revenues increased 27%, supporting growth in the company’s broader Balanced Choices portfolio. Revenues from low-carb, low-calorie, sugar-free, gluten-free and no-alcohol brands collectively rose 13%.Beyond Beer revenues jumped 44%, led by Flying Fish and Cutwater. Cutwater posted triple-digit revenue growth and was the second-largest brand contributor to AB InBev’s overall revenue growth in the quarter. Digitization remained a notable growth vector in the quarter. BEES was operating in 30 markets at the end of June, with 72% of revenues captured through B2B digital platforms. The platform processed $15 billion in gross merchandise value during the quarter, up 16% year over year.BEES Marketplace gross merchandise value climbed 50% to $1.2 billion from third-party products. The company’s direct-to-consumer platforms served 13 million active consumers and generated $165 million in revenues, representing 12% growth. Gross profit increased 7.5% organically, while the gross margin expanded 99 basis points (bps) to 57.5%. Normalized EBIT advanced 8% to $4.60 billion, with the normalized EBIT margin improving 58 bps to 27.6%.Normalized EBITDA rose 5.8% to $5.94 billion. The normalized EBITDA margin expanded 4 bps to 35.6%, as overhead discipline offset foreign-exchange pressures, and supported higher sales and marketing investments.Our model had anticipated a rise of 9.5% in normalized EBIT and 7.6% in normalized EBITDA for the second quarter. The free cash flow for the first half of 2026 increased by $2.53 billion to $3.88 billion. The cash flow from operating activities rose to $5.24 billion from $2.7 billion a year earlier, reflecting higher profit and improved working-capital movements.Net debt totaled $64.2 billion at the end of June. The net debt-to-normalized EBITDA ratio improved to 2.86 from 3.27 a year earlier. AB InBev also completed $1.9 billion of its $6-billion share repurchase program as of July 24. Management expects EBITDA growth of 4-8% in 2026, in line with its medium-term outlook. The projection reflects its current view of inflation and broader macroeconomic conditions.The company anticipates a normalized effective tax rate of 26-28% and net capital expenditure of $3.5-$4 billion. Net pension interest and accretion expenses are projected at $190-$220 million per quarter, while the average gross debt coupon is expected to be 4%. We have highlighted three better-ranked stocks from the Consumer Staples sector, namely The Vita Coco Company Inc. COCO, Primo Brands Corporation PRMB and Fomento Economico Mexicano FMX.Vita Coco develops, markets and distributes coconut water and other beverage products, led by the Vita Coco brand. The company currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Vita Coco’s current financial-year sales and earnings is expected to rise 31.6% and 64.7%, respectively, from the year-ago reported figures. COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average.Fomento Economico Mexicano, alias FEMSA, is a leading Latin American beverage and retail company that operates Coca-Cola bottling businesses, OXXO convenience stores, health and beauty outlets, fuel stations, and digital financial services across multiple countries. The company currently has a Zacks Rank #2 (Buy).The Zacks Consensus Estimate for FMX’s current financial-year sales and earnings indicates growth of 17.3% and 131% from the prior-year reported level. FMX delivered a trailing four-quarter negative earnings surprise of 0.2%, on average.Primo Brands is a leading North American branded beverage company focused on healthy hydration. The company currently carries a Zacks Rank #2.The Zacks Consensus Estimate for Primo Brands’ current financial-year sales indicates growth of 1.6% from the year-ago reported number. PRMB delivered an average earnings surprise of 1.4% in the trailing four quarters. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Anheuser-Busch InBev SA/NV (BUD) : Free Stock Analysis Report Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report Primo Brands Corporation (PRMB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Fomento Economico Mexicano S.A.B. de C.V. FMX, alias FEMSA, reported second-quarter 2026 adjusted net majority earnings per ADS of 93 cents, topping the Zacks Consensus Estimate of 82 cents by 13.4% and up from 42 cents in the year-ago quarter. The company reported net majority earnings per ADS of 93 cents (Ps. 1.62 per FEMSA unit).Net consolidated income was Ps. 9,221 million (US$528.5 million), reflecting growth of 64.9% from the year-ago quarter.Total revenues of US$13.28 billion (Ps. 231,002 million) surpassed the consensus estimate of $12.94 billion by 2.7%. Consolidated revenues grew 9.3% in Mexican pesos, led by OXXO Mexico, Americas & Mobility, and Coca-Cola FEMSA. OXXO Mexico same-store sales increased 9.5%. Comparable revenues, excluding acquisitions and currency-translation effects, advanced 10.1%.Shares of this Zacks Rank #2 (Buy) company have rallied 8% in the past three months compared with the industry’s 3.8% growth. Image Source: Zacks Investment Research FEMSA’s gross profit rose 7.8% year over year to Ps. 92,611 million (US$5.3 billion). The consolidated gross margin contracted 60 basis points (bps) to 40.1%, reflecting pressure at OXXO Mexico, Europe, Health, and Americas & Mobility, offset by margin expansion in Coca-Cola FEMSA. The company’s gross margin contracted 70 bps in OXXO Mexico, 10 bps in Americas & Mobility, 120 bps in Europe, and 310 bps in Health, offset by an expansion of 180 bps in Coca-Cola FEMSA. Comparable gross profit rose 8.8% year over year. Excluding expense reclassifications in Europe and Health, the contraction would have been 20 basis points.FEMSA’s operating income (income from operations) rose 7.2% to Ps. 19,110 billion (US$1.1 billion), driven by growth in Coca-Cola FEMSA and OXXO Mexico, offset by declines in Americas & Mobility, Europe, and Health. On a comparable basis, operating income increased 11.7%, reflecting stronger underlying growth after excluding currency and acquisition effects. The operating margin contracted 10 bps to 8.3%.Adjusted EBITDA climbed 12.7% to Ps. 33,340 million (US$1.91 billion), while the adjusted EBITDA margin expanded 40 bps to 14.4%. Fomento Economico Mexicano S.A.B. de C.V. price-consensus-eps-surprise-chart | Fomento Economico Mexicano S.A.B. de C.V. Quote OXXO Mexico: Total revenues for the segment rose 11.8% year over year to Ps. 86,708 million (US$4.97 billion). Same-store sales rose 9.5%, driven by a 7.4% increase in the average ticket and a 2% improvement in store traffic. Results benefited from pricing and assortment initiatives, stronger demand in traffic-driving categories and the FIFA World Cup. The segment’s gross margin declined 70 bps to 44.8% due to pricing actions intended to improve traffic and market share. Nevertheless, operating income rose 12.3%, and the operating margin expanded 10 bps to 10%, supported by operating leverage and expense control. OXXO Mexico added 253 stores in the second quarter, bringing its total store base to 24,708.Americas & Mobility: Total revenues for the segment rose 17.4% year over year to Ps. 28,567 million (US$1.6 billion). Merchandise sales climbed 55.6%, aided by the consolidation of OXXO Brazil, while fuel and other sales increased 9.3%. Comparable revenues rose 11.6%. The segment’s same-store sales increased 11.4% in Mexican pesos and 17.6% on a currency-neutral basis.Despite strong sales growth, operating income plunged 88% year over year. The operating margin contracted 240 bps to 0.3% due to losses from OXXO Brazil and fuel-margin compression in Mexico. Adjusted EBITDA decreased 4.3%. The Americas & Mobility division had 1,953 stores as of June 30, 2026.Europe: Total revenues for the segment fell 3.8% year over year to Ps. 14,491 million (US$830.5 million). The decline was mainly due to currency headwinds, although revenues for the segment increased 3.2% on a currency-neutral basis. Same-store sales declined 5.7%. Operating income decreased 7.3%, reflecting foreign-exchange pressure and reorganization expenses.Health Division: The segment reported total revenues of Ps. 22,328 million (US$1.28 billion), up 2.2% year over year and 4.8% on a comparable basis. Same-store sales advanced 0.7% in Mexican pesos and 6.2% on a currency-neutral basis, reflecting stronger underlying operating performance. However, operating income declined 57.7%. Results were hurt by weakness in Mexico, competitive promotional activity in Chile and a Ps. 408 million credit-risk provision tied to Colombia’s institutional business. The segment’s store base reached 4,584 locations as of June 30, 2026. Coca-Cola FEMSA: Total revenues for the segment increased 4.7% to Ps. 76,318 million (US$4.4 billion) and advanced 6.6% on a comparable basis. Total sales volume grew 3.5% to 1.07 billion unit cases. Gross profit rose 8.8%, and the gross margin expanded 180 bps to 47.1%. Operating income increased 9.1%, with the operating margin improving 60 bps to 14%. Adjusted EBITDA advanced 12.1% year over year. The adjusted EBITDA margin expanded 130 bps to 19.7%, making Coca-Cola FEMSA a major contributor to consolidated profitability. As of June 30, 2026, FEMSA had cash and cash equivalents of Ps. 104,960 million (US$6.02 billion). The company’s long-term debt was Ps. 124,830 million (US$7.15 billion).In the second quarter of 2026, capital expenditure totaled Ps. 8,872 million (US$508.5 million), a 3.6% decline from the prior year, reflecting lower CAPEX at Coca-Cola FEMSA, along with reduced spending in Health and Europe. These declines were partially offset by higher CAPEX at OXXO Mexico, supporting the continued pace of store openings, and in Americas & Mobility, reflecting store expansion investments across the region. We have highlighted three other top-ranked stocks from the Consumer Staples sector, namely The Vita Coco Company Inc. COCO, Primo Brands Corporation PRMB and Kraft Heinz Company KHC.Vita Coco develops, markets and distributes coconut water and other beverage products, led by the Vita Coco brand. The company currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Vita Coco’s current financial-year sales and earnings is expected to rise 31.7% and 30%, respectively, from the year-ago reported figures. COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average.Primo Brands is a leading North American branded beverage company focused on healthy hydration. The company currently carries a Zacks Rank #2.The Zacks Consensus Estimate for Primo Brands’ current financial-year sales indicates growth of 1.6% from the year-ago number. PRMB delivered an average earnings surprise of 1.4% in the trailing four quarters.Kraft Heinz is one of the largest consumer packaged food and beverage companies in North America. KHC currently has a Zacks Rank #2.The Zacks Consensus Estimate for Kraft Heinz’s 2026 sales and EPS implies declines of 2% and 20.4%, respectively, from the previous year’s reported numbers. KHC delivered a trailing four-quarter average earnings surprise of 10.2%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report Kraft Heinz Company (KHC) : Free Stock Analysis Report Primo Brands Corporation (PRMB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Fomento Económico Mexicano, S.A.B. de C.V. FMX emphasized a consumer-focused transformation across its retail ecosystem during its second-quarter 2026 earnings call, with management highlighting improving traffic trends, digital expansion and disciplined growth initiatives. The company reported results above the Zacks Consensus Estimate, with earnings of 93 cents per ADS beating the consensus estimate of 82 cents. Revenues were $13.29 billion, ahead of the consensus estimate of $12.94 billion. Fomento Economico Mexicano S.A.B. de C.V. price-consensus-eps-surprise-chart | Fomento Economico Mexicano S.A.B. de C.V. Quote CEO Jose Antonio Garza-Laguera said OXXO Mexico’s second-quarter performance reflected early progress from strategic changes launched in the second half of the prior year. Management is prioritizing customer relevance through pricing, assortment and execution improvements. OXXO Mexico delivered 9.5% same-store sales growth, supported by 2% traffic growth and a 7.4% increase in average ticket. Management noted that World Cup-related activity contributed to the quarter, but underlying initiatives also improved engagement. Garza-Laguera said the company is balancing pricing competitiveness with profitability rather than focusing solely on gross margin expansion. The goal is to increase traffic, strengthen market share and build longer-term operating income growth. FEMSA highlighted continued momentum at Spin by OXXO as a key part of its broader consumer ecosystem strategy. Active users increased 22.1% year over year to 11.5 million, while monthly transactions reached 119.1 million. Management discussed its partnership with QED Investors to develop a lending platform, with CFO Martin Arias Yaniz noting that the initiative will begin with a controlled approach focused on risk management. Arias said the long-term goal is to build credit capabilities that can leverage FEMSA’s customer data and ecosystem, while keeping the business disciplined as it develops. Management pointed to Bara, Colombia and Brazil as important growth platforms. Bara delivered record store openings during the quarter, adding 112 net new stores and reaching 786 locations. Garza-Laguera said Bara continues to benefit from consumer demand for value-oriented formats, with private label remaining a key element of the model. Same-store sales increased 11.3% for the business during the quarter. FEMSA also highlighted progress in Latin American OXXO operations. Colombia revenues increased approximately 30%, while Brazil continued improving store economics as the company refined its expansion model. FEMSA reported consolidated revenue growth of 9.3% year over year and operating income growth of 7.2% in the quarter. Adjusted EBITDA increased 12.7%, while net consolidated income rose 64.9%. Coca-Cola FEMSA delivered revenue growth of 4.7% and operating income growth of 9.1%, helped by stronger South American performance despite challenges in Mexico from weaker consumer demand and tax increases. Health and Europe faced pressure during the quarter, while management highlighted cost control, operational improvements and portfolio discipline as ongoing priorities. Management cautioned that second-half comparisons will become more challenging as World Cup benefits fade and consumer conditions remain soft, particularly in Mexico. Garza-Laguera said sustaining momentum will depend on continued execution of pricing, assortment and operational initiatives across the company’s businesses. Capital allocation remained disciplined, with FEMSA completing a $300 million accelerated share repurchase program and reporting a net debt-to-EBITDA ratio of 1.15x. A Goldman Sachs analyst asked about Spin’s lending opportunity and how FEMSA plans to use its ecosystem advantage. Management emphasized the importance of QED’s expertise and a gradual rollout focused on responsible credit expansion. A Barclays analyst questioned OXXO’s pricing and assortment strategy. Management explained that the company is adjusting price-pack architecture to improve competitiveness while maintaining operating discipline. The Q&A reinforced management’s focus on customer engagement, supply chain capabilities and selective growth rather than short-term margin maximization. FMX currently carries a Zacks Rank #2 (Buy), with Style Scores of A for Value, B for Growth, B for Momentum and A for VGM. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Zacks Style Scores evaluate value, growth and momentum characteristics, with A and B scores representing stronger attributes than lower-rated scores. The VGM Score combines these factors to assess broader style characteristics. The Zacks Rank can change as analysts update earnings estimates following new company information, including developments after reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research