KOF

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

This article first appeared on GuruFocus. Consolidated Volume Growth: 3.5% increase to 1.1 billion unit cases. Total Revenue: Increased 4.7% to MXN76.3 billion; 6.6% increase on a currency-neutral basis. Gross Profit: Increased 8.8% to MXN35.9 billion; margin expansion of 180 basis points to 47.1%. Operating Income: Increased 9.1% to MXN10.7 billion; margin expanded 60 basis points to 14%. Adjusted EBITDA: Grew 12.1% to MXN15 billion; margin expanded 130 basis points to 19.7%. Majority Net Income: Grew 16.9% to MXN6.2 billion. Mexico Volume Growth: 1% year-over-year increase. Guatemala Volume Growth: 3.4% year-over-year increase. Brazil Volume Growth: 5.2% year-over-year increase. Colombia Volume Growth: 17.7% year-over-year increase. Argentina Volume Decline: 2.8% year-over-year decrease. South America Revenue Growth: 11.8% increase to MXN30.9 billion; 14.1% increase on a currency-neutral basis. South America Gross Profit: Increased 17.7% to MXN13.7 billion; margin expanded 220 basis points to 44.4%. South America Operating Income: Increased 46.5% to MXN4.3 billion; margin expanded 330 basis points to 13.9%. Warning! GuruFocus has detected 7 Warning Sign with KOF. Is KOF fairly valued? Test your thesis with our free DCF calculator. Release Date: July 27, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Coca-Cola Femsa SAB de CV (NYSE:KOF) achieved record second quarter volumes in Brazil, Colombia, and Guatemala, driving consolidated volume growth of 3.5%. Total revenues for the quarter grew 4.7% to MXN76.3 billion, with a currency-neutral revenue increase of 6.6%. Gross profit increased by 8.8% to MXN35.9 billion, with a margin expansion of 180 basis points to 47.1%, driven by favorable sweeteners and PET costs. Adjusted EBITDA grew 12.1% to MXN15 billion, with an EBITDA margin expansion of 130 basis points to 19.7%. The company successfully leveraged the FIFA World Cup as a brand-building platform, resulting in increased consumer engagement and incremental demand. Mexico faced headwinds from an excise tax increase and a softer consumer environment, impacting volume growth. Argentina experienced a volume contraction of 2.8% year over year, affected by a truck driver strike and continued softness in consumer demand. Operating income in Mexico and Central America declined 7% due to higher marketing and freight expenses, coupled with a lower operating foreign exchange gain. The competitive environment in Mexico remains intense, with significant pressure on pricing and consumer affordability. Higher aluminum costs partially offset the benefits of favorable sweeteners and PET costs, impacting overall cost management. Q: Can you elaborate on the growth of Monster in Brazil and its impact on your portfolio? A: Pamela Ortiz, Investor Relations Director, explained that the energy drinks category in Brazil has been growing strongly, with a CAGR of around 25% over the last four quarters. This growth is driven by portfolio innovation and complements the strategy alongside sports drinks and CSDs. Ian Garcia, CEO, added that the growth is due to improved household penetration and coverage, with Monster performing well across all geographies. Q: How did the performance throughout the quarter unfold, and what are your expectations for the second half of the year in Mexico? A: Ian Garcia, CEO, noted that volumes improved sequentially, with the first two months slightly negative and June showing over 12% growth due to easier comps. Trends are improving, but the competitive and consumer environment remains challenging. The company has built a share cushion, allowing room to catch up on pricing with inflation. Q: Can you discuss the pricing strategy in Mexico and its impact on volumes and margins? A: Ian Garcia, CEO, explained that the company passed about 85% of the total impact from tax and inflation, learning from past experiences to avoid significant share loss. The strategy has built a share cushion, allowing for further price adjustments to catch up with inflation. Gerardo Celaya, CFO, added that mix shifts towards more affordable packaging have impacted margins but maintained consumer positioning. Q: What are the main drivers behind the margin expansion in South America, and how sustainable is it? A: Gerardo Celaya, CFO, highlighted that the margin expansion is driven by operating leverage and expense efficiencies, particularly in Brazil and Colombia. The company expects this trend to continue, with structural improvements in profitability. Ian Garcia, CEO, emphasized the focus on sustainable growth and improving competitive positions. Q: How is the Juntos+ Advisor platform contributing to growth in Brazil? A: Gerardo Celaya, CFO, stated that the Juntos+ Advisor platform has improved geo-efficiency, visitation, and combined coverages, contributing to share performance. The platform personalizes commercial tactics for each customer, enhancing execution at the point of sale. The rollout is expected to continue across other operations. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

MONTERREY, Mexico, July 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 second 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 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 9.3% and Income from operations increased 7.2% compared to 2Q25. OXXO Mexico: Total revenues grew 11.8% and Income from operations increased 12.3% versus 2Q25. SPIN: Spin by OXXO had 11.5 million active users1 representing 22.1% growth compared to 2Q25 while Spin Premia had 29.1 million active loyalty users2 representing 9.4% growth compared to 2Q25, and an average tender at OXXO Mexico of 50.4% which increased from 45.8% in 2Q25. COCA-COLA FEMSA: Total revenues grew 4.7% and Income from Operations increased 9.1% against 2Q25. Jose Antonio Fernández Garza-Lagüera, FEMSA’s Chief Executive Officer, commented:         “During the second quarter, we delivered a strong set of results, led by an encouraging performance at OXXO Mexico and continued momentum across many of our retail platforms, while Coca-Cola FEMSA navigated a still-challenging environment due to weak consumer demand and tax increases in Mexico that was more than offset by robust performances in South America. We should highlight the quarter at OXXO Mexico, which delivered double-digit revenue and profit growth and, importantly, a return to positive customer traffic after several quarters of decline. While the World Cup provided a positive contribution during the quarter, we believe there was additional improvement supported by stronger execution across regions, commercial initiatives focused on key traffic-driving categories, and the consumer-centric strategy we began implementing during the second half of last year as we refocus on the customer at the center of everything we do. Beyond OXXO Mexico, we continue to be encouraged by the momentum of our growth platforms, with Bara setting a record for store openings and our OXXO operations in Colombia and Brazil advancing steadily toward the unit economics that will allow us to accelerate expansion with confidence. As we look ahead, and despite still facing a soft consumer environment in Mexico, and not enjoying the tailwind of the World Cup, we like our current momentum across most of our business units, and we are cautiously optimistic about the second half of the year even if it will be more subdued. While we recognize it will present its share of challenges, we are confident that the strength of our geographically diversified platform, together with the strategic and operating initiatives we have put in place and which are already bearing fruit, position us well to continue executing against our long-term strategy in pursuit of sustainable, profitable growth.” ABOUT FEMSAFEMSA 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 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) 818-328-6000 [email protected] femsa.gcs-web.com Media Contact (52) 555-249-6843 [email protected] femsa.com

Image source: The Motley Fool. Monday, July 27, 2026 at 11:00 a.m. ET Investor Relations Director - Pamela Ortiz Chief Executive Officer - Ian Marcel Craig García Chief Financial Officer - Gerardo Celaya Operator: Hello, and welcome to the Coca-Cola FEMSA Second Quarter 2026 Conference Call. My name is Vinicius, and I will be your moderator for today's event. Please note that this conference is being recorded. I would like to hand the call over to Pamela Ortiz, Investor Relations Director at Coca-Cola FEMSA. Pamela, please go ahead. Pamela Ortiz: Good morning, everyone, and welcome to Coca-Cola FEMSA's Second Quarter 2026 Results Conference Call. Today, we are joined by Ian Craig, our CEO; Gerardo Cruz, our CFO; and the rest of the Investor Relations team. Before we begin, let me remind all participants that today's conference call may include forward-looking statements that should be considered as good faith estimates made by the company. These forward-looking statements reflect management expectations and are based upon currently available data. The actual results are subject to future events and uncertainties that can materially impact the company's performance. For additional details, please refer to the full disclaimer in the earnings release that was published earlier today. After the prepared remarks, we will open the call for questions. To ask a question, please use the right hand feature in your Zoom toolbox. With that, let me turn the call over to Ian, our CEO, to begin our presentation about the second quarter results. Ian, please go ahead. Ian Marcel Craig García: Thank you, Pamela. Good morning, everyone. Before reviewing our second quarter results, I would like to take a moment to address the earthquakes that struck Venezuela on June 24. This unfortunate strategy resulted in loss of life thousands of injuries and significant displacement across affected communities. It has impacted many people throughout the region, including employees of Coca-Cola FEMSA Venezuela and their families. We extend our deepest condolences to those who have lost love ones and express our solidarity with everyone affected by this strategy. Our immediate priority has been to support our employees and their families as well as the impacted communities with broader support from FEMSA and the Coca-Cola Company were contributing to the humanitarian response, including the donation of more than 100,000 liters of water and other essential emergency supplies to communities in need. We remain closely engaged with the team on the ground and will continue supporting our people and the broader community as recovery and rebuilding efforts progress. Now let me walk you through our consolidated results. Our second quarter showed sequential improvement at the consolidated level, driven mainly by record second quarter volumes in Brazil, Colombia and Guatemala, where we continue to drive growth in the industry. At the same time, Mexico continued to face headwinds from the excise tax increase and the softer consumer environment. Against this background, we remain focused on implementing our sustainable long-term growth, continuing to gain share across markets and categories and capitalizing on the FIFA World Cup opportunity. The FIFA World Cup represented a brand-building platform across our territories this quarter. We executed a comprehensive 360-degree plan combining exclusive customers promotions such as Panini stickers, special edition cans, people merchandise and our red tide execution around stadiums, particularly in Mexico City. [indiscernible]. This integrated approach strengthened consumer engagement translated into incremental demand and reinforce the positive momentum of our brands throughout the work. The final tally of the FIFA World Cup resulted in new highs in key Coca-Cola trademark brand engagement metrics such as reputation, positive BOSS purchase consideration, among others. Across our operations, reinforcing the platform's role as a long-term brand-building investment. Moving on to our quarterly results. Consolidated volume for the second quarter grew 3.5% to reach 1.1 billion unit cases. This growth was driven mainly by volume increases across most of our operations, partially offset by a volume contraction in Argentina. Total revenues for the quarter grew 4.7% to MXN 76.3 billion. This increase is explained mainly by our volume growth and revenue growth management initiatives which were partially offset by unfavorable mix and currency translation effects. On a currency neutral basis, total revenues increased 6.6%. Gross profit increased 8.8% to MXN 35.9 billion, leading to a margin expansion of 180 basis points to reach 47.1%. This positive performance was driven mainly by favorable sweeteners and PET costs as compared with the previous year, reflecting the benefits of our disciplined hedging strategy, together with the appreciation of most of our operating currencies as applied to a dollar-denominated raw material costs. These effects were partially offset by fare aluminum costs. On a currency-neutral basis, gross profit rose 10.7%. Operating income rose 9.1% to MXN 10.7 billion, while operating margin expanded 60 basis points to 14%. This positive performance benefited from the recognition of MXN 265 million in recovered insurance claims in Brazil. Excluding this insurance recovery, operating income would have increased 6.4% with operating margin expanding 20 basis points to 13.6%. Our operating leverage and expense efficiencies, particularly in labor and rent drove this normalized margin expansion. These benefits were partially offset by higher freight and marketing expenses. As well as a lower operating foreign exchange gain compared with the prior year. Adjusted EBITDA for the quarter grew 12.1% to MXN 15 billion. and EBITDA margin expanded 130 basis points to reach 19.7%. Excluding the effects of insurance claim, adjusted EBITDA grew 10.1% and EBITDA margin expanded 90 basis points to 13 to 19.3%. Finally, our majority net income grew 16.9% to MXN 6.2 billion mainly reflecting higher operating income and a lower effective tax rate. This growth was partially offset by an increase in our comprehensive financial result, which Jerry will discuss in more detail later. Turning now to our key markets. Let me highlight the main operational and strategic developments during the quarter. In Mexico, volumes increased 1% year-over-year. As I mentioned earlier, our quarterly results continue to reflect headwinds from the excise tax increase and softer consumer dynamics. However, our sustainable growth strategy supported by strong commercial execution and the FIFA World Cup continued to deliver share gains, which will enable us to emerge stronger and return to growing the industry. Being a host country for the FIFA World Cup represented an important brand engagement opportunity for Mexico specifically. Incremental demand was primarily generated in cold cities through Fan Fest activations and other consumer touch points, while non-wholly experienced a more limited impact. For its part, Powered delivered an uplift of 150 basis points of market share while generating strong positive brand bus, supported by its prominent role within the P4 World Cup activations and a dedicated 360-degree commercial plan that included the launch of PowerEdge and limited edition flavors. Perhaps more importantly, the quarter demonstrated the effectiveness of the strategy we implemented following the excise tax increase designed to deliver sustainable growth. strengthen our competitive position and ultimately to return to growing the industry, this strategy was built on 4 complementary pillars. First, we adopted a differentiated our revenue management approach, improving our relative price positioning in regions with high competitive intensity. As part of this pillar, we continued reinforcing affordability through returnable and multi-serve presentations, returnable offerings, including our 2-liter PET return out presentation have successfully expanded household penetration without cannibalizing our One-Way portfolio. Second, building on the momentum of the Coca-Cola Zero playbook we continued expanding this segment, which grew 24% year-on-year, while leveraging the FIFA World Cup, as I previously mentioned. Third, we strengthened our core flavors portfolio and heritage brands. ensuring consumers can access their favorite beverages across multiple price points and consumption locations. Fourth, we innovated and launched offerings in underrepresented segments such as our recent launch of [ Ciel as Frescas ], which has been positively received by consumers. Supported by our state-of-the-art digital initiatives, these 4 pillars have translated into a stronger competitive position across channels. For instance, our Juntos+ platform maintained strong momentum with digital sales now representing 38% of the traditional trade and 19% of total revenues. We strengthened execution at the point of sale by increasing purchase frequency, improving average ticket and expanding cooler coverage. Looking ahead, we expect the consumer environment in Mexico to remain subdued, we will continue strengthening our competitive position to affordability, accessible price points, innovation and digital execution, positioning us well to deliver profitable long-term growth. In Guatemala, volumes grew 3.4% year-over-year, supported by a stronger consumer environment and disciplined execution across our portfolio. Economic activity continued to improve during the quarter, supported by stronger household consumption and resilient remittances, which grew 7.5% year-over-year. Looking ahead, GDP growth should remain supported by consumption, remittances and favorable demographics with the population increasing approximately 1.3% annually which is above the broader Latin America average. In this context, our strategy remains focused on unlocking volume opportunities through market development and consistent execution. We continue to drive per capita consumption by expanding affordable price points and strengthening our one-way and multi-serve portfolio. This approach supported strong momentum in sparkling beverages, where our share increased by 90 basis points year-over-year. We also expanded our [indiscernible] portfolio with a more competitive and differentiated portfolio, enabling us to reach more consumers and consumption occasions beyond the strength of brand cool. We continued accelerating our expansion -- customer expansion by capturing white space opportunities and investing in coolers. Our customer base grew 5.2% and to approximately 156,000 customers, while cooler coverage increased 40 basis points to 78.8%. Overall, Guatemala offers a compelling combination of healthy consumer fundamentals, favorable demographics, expanding customer coverage and significant room to increase per capita consumption. We remain confident in our ability to convert these opportunities into sustainable volume growth and profitability over time. Turning to Brazil, where our volumes increased a solid 5.2%. Despite high interest rates, low unemployment and real income growth continued providing support for consumption. In this environment, our Brazil operation continued to outperform the industry through disciplined commercial execution and digital capabilities as well as by capitalizing on the FIFA World Cup opportunity. As a result, we continued gaining share across key categories within the nonalcoholic ready-to-drink industry. Our core portfolio delivered growth across our 3 main beds: First, within our Zero Sugar portfolio, Coca-Cola Zero grew 15% and spread triple digits; Second, flavors reached double-digit growth supported by Sprite and Fanta; and third, still delivered 23% growth driven mainly by Monster, tees and sport drinks with Power. In sparkling beverages, our single-serve mix was another highlight of the quarter. improving 2.6 percentage points compared to March 2026, reaching 28%. We drove this result by capitalizing on the FIFA World Cup and Panini exclusive stickers in our 600 ml brand, Coca-Cola presentations. This not only increased transactions but also provided a positive tailwind to our profitability. We also continued to strengthen our commercial capabilities through digital transformation. We're leveraging Junos adviser, our next-generation platform to provide supervisors on frontline teams with better insights suggested ordering capabilities and enhanced commercial execution. These investments are helping to improve assortment quality, increase average ticket and further strengthen customer relationships. Looking ahead, we expect election-related spending and strong execution to support the second half of the year, while we continue to closely monitor regulatory developments that could result in a more challenging backdrop in 2027. However, we remain confident in the long-term growth opportunity of the Brazilian market and in our ability to continue delivering long-term growth. Turning to Colombia. Volumes increased 17.7% year-over-year, supported by minimum wage increase and improving consumer environment and strong execution across our portfolio. Macroeconomic indicators continued to improve during the quarter. Unemployment declined to 8% in May, its lowest level for that month in 2001, while consumer confidence reached the strongest sustained recovery since 2015. Although job creation remains supported in part by the public sector and labor in formality remains structurally high. The overall macroeconomic backdrop points to a gradual improvement in the consumer environment. Our affordability strategy in Colas continued to deliver results supporting further market share gains in the one-way portfolio. At the same time, we continued strengthening our position in Flavors delivering 27.2% quarterly volume growth supported mostly by Cuatro, our grade fruit flavor and Sprite. We also continued advancing our strategy in still beverages by prioritizing profitable growth in margin-accretive categories. Power and Monster were among the strongest performing venture in the quarter, allowing us to capture attractive growth opportunities while improving the quality of our portfolio. Our digital capabilities remained another important driver of execution. So our Juntos+ platform, we continued increasing customer engagement, helping us to improve ordering frequency, strengthened assortment and deepen our relationships with our customers. Overall, Colombia delivered a strong combination of volume growth, share gains and operating leverage underscoring Colombia as one of our key growth markets. In Argentina, Volume decreased 2.8% year-over, mainly reflecting a truck driver strike that affected the beverage industry within our region, together with continued softness in consumer demand. Although macroeconomic conditions have continued to stabilize, the recovery in consumption has been slower than anticipated, with consumers increasingly prioritizing value and affordability in their purchasing it. Against this backdrop, our strategy remains focused on strengthening affordability while continuing to refine our revenue growth management capabilities to ensure consumers have access to the right price pack architecture options across channels and occasions. This approach has enabled us to preserve the affordability of our core sparkling portfolio while strengthening our competitive position contributing to a 100 basis point increase in our CSD market share. We also continued reinforcing our leadership in flavors, mostly capitalizing on the strong momentum as right. Beyond sparkling beverages, we remain focused on growing profitable NCB categories, which posted year-over-year volume growth. While the competitive environment remains intense, particularly with increased pressure from value-oriented and B brand offerings, we remain confident that our affordability strategy, disciplined commercial execution and balanced portfolio position us well to continue strengthening our competitive position as consumer demand gradually records. This quarter once again demonstrated the value of our long-term sustainable growth model while Mexico navigated a more challenging consumer environment, we are laying the foundations to emerge stronger and grow our industry. In our South American operations, particularly Brazil and Colombia, we continue to deliver industry growth, strong volumes and profitability. This geographic diversification, together with our ability to capitalize on markets with stronger momentum while maintaining disciplined execution across the region continue to support our consolidated results. With that, I will hand over the call to Gerry to expand on our division's results. Gerardo Celaya: Thank you, Ian, and good morning, everyone. Expanding our division's results for the quarter. In Mexico and Central America, our volumes increased 1.4% supported by volume growth across all territories in the division. Revenues were flat at MXN 45.4 billion as our volume growth was offset by unfavorable mix and currency translation effects into Mexican pesos. On a currency-neutral basis, revenues increased 2% for its part, gross profit increased 3.9% to reach MXN 22.2 billion, resulting in a gross margin expansion of 170 basis points to 48.9%. This margin expansion was driven mainly by lower raw material costs, particularly for sweeteners and PET, reflecting the benefits of our hedging strategy together with the appreciation of the operating currencies in the division as applied to our U.S. dollar-denominated raw material costs. Operating income in the division declined 7% to MXN 6.4 billion and their operating margin contracted 110 basis. This decline is mainly explained by higher expenses such as marketing and freight, coupled with a lower operating foreign exchange gain as compared with the prior year. These factors were partially offset by operating expense efficiencies such as labor. Finally, our adjusted EBITDA margin and EBITDA margin in the division remained flat at MXN 9 billion and 19.7%, respectively. Moving on to South America. Volumes increased by a solid 6.9% to 426 million unit cases. This increase was driven mainly by volume growth in Brazil and Colombia that was partially offset by volume contraction in Argentina. Revenues in South America increased 11.8% to MXN 30.9 billion, driven mainly by volume growth and revenue management initiatives which more than offset unfavorable currency translation effects into Mexican pesos from most operating currencies in the division. On a currency neutral basis, total revenues in South America increased 14.1%. Gross profit in the division increased 17.7% to reach MXN 13.7 billion, and gross margin expanded by 220 basis points to 44.4% and driven mainly by favorable mix, coupled with lower raw material costs and the appreciation of most of our operating currencies as applied to our U.S. dollar-denominated raw material costs. These effects were partially offset by higher aluminum and secondary packaging costs. On a currency-neutral basis, gross profit increased 20.1% year-on-year. Operating income in South America rose 46.5% to MXN 4.3 billion, while operating margin expanded 330 basis points to 13.9%. As Ian previously mentioned, this quarter, we recognized insurance claims in Brazil for MXN 265 million. The improvement in operating income was driven mainly by operating leverage, coupled with expense efficiencies and such as rentals and labor. These efficiencies were partially offset by higher marketing and freight expenses. Finally, adjusted EBITDA in the division increased 35.6% to MXN 6.1 billion, for a margin expansion of 340 basis points to 19.6%. Now let me expand on our comprehensive financing results. which recorded an expense of MXN 1.3 billion as compared to an expense of MXN 1.2 billion during the same period of the previous year. For the quarter, the increase was driven mainly by the following factors: First, we recognized higher net interest expense, mostly as a result of the issuance of new debt during the first quarter of 2026. Second, we recognized the lower gain in financial instruments of MXN 88 million compared to a gain of MXN 154 million in the prior year, primarily reflecting the valuation of matured financial instruments and lower rates in Brazil. Finally, these effects were partially offset by a higher foreign exchange gain of MXN 96 million during the quarter as compared to a gain of MXN 55 million in the same period of the previous year. This was driven mainly by the appreciation of the Mexican peso as applied to our U.S. dollar-denominated net debt. As I mentioned during our previous earnings call, the global commodity environment remains volatile. As such, we continue to lean on well-established protocols and governance structures that enabled us to plan, respond and adapt effectively our hedging strategy. Providing an update for this year, we have hedged 65% of our PET requirements, 96% of sugar, 98% of HFCS and 73% of aluminum. In addition, following our policy, we are already taking hedges 7, resulting in 80% for sugar, 80% for HFCS and 54% for alumina, which allows us to reduce short-term volatility and provide visibility for the upcoming year. This disciplined hedging strategy, together with our continued focus on cost and expense optimization provides greater visibility over our input costs, allowing us to plan ahead with greater confidence while protecting margin over time. Let me briefly address our capital allocation priorities. First, we will continue investing behind the business to support long-term profitable growth. While our capital intensity is naturally moderating after several years of expanding our capacity, for 2026, we continue to expect CapEx to be between 7% to 7.5% of revenues. At the same time, we continue to invest selectively where additional capacity is needed. Recent examples include the inauguration of our new PET production line in Costa Rica and our new aluminum can line in Uruguay, both of which enhance our manufacturing capabilities and position us to support future growth across those markets. Second, we remain attentive to M&A opportunities that meet our strategic and financial criteria. We have a strong track record of disciplined capital deployment, and that approach remains unchanged. We Third, returning capital to shareholders continues to be an important component of our capital allocation framework. We have been conducting a comprehensive review to evaluate the alternatives available, and we will share updates as this process evolves. Turning to sustainability. The Mexican Stock Exchange recognized Coca-Cola FEMSA with the best total score in Mexico CSA 2025 award positioning us as the leading sustainability performer among the listed companies evaluated. We also received the highest distinctions in the environmental, governance and economic categories. These recognitions reflect the consistent execution of our sustainability strategy and its integration across our operations. Before turning over the call for questions, I would like to share an update regarding our Investor Relations team. As you may have seen in this morning's earnings release, Pamela Ortiz will become Director of Investor Relations. Pamela brings an extensive experience in capital markets and Investor Relations, including her previous role as Investor Relations Manager of FEMSA. Jorge Collazo, who has been part of the Coca-Cola FEMSA Investor Relations team since 2016 will take on a new responsibility of Strategic Planning Director for Coca-Cola FEMSA Brazil. In addition, Lorena Martin, currently Investor Relations Manager, will assume a new role as an FP&A Manager at our LatAm division, while Natalia Sariniana will become Investor Relations Manager. They've been working closely together to ensure a smooth transition and continued support for our investors and analysts. With that, operator, we're ready to open the floor for questions. Operator: Our first questions come from Alvaro Garcia from BTG. Sir, your microphone is open. Alvaro Garcia: Ian, Gerry, Pam. Thanks for the space for questions. I will let other analysts ask about Mexico. I wanted to ask about Monster in Brazil. I was wondering if you could maybe unpack how much of that growth is coming from household penetration versus geographic expansion within your territory? And maybe if you could just comment from a broader perspective, how much it complements your portfolio in Brazil. Thank you. Pamela Ortiz: Alvaro, this is Pamela. So basically, the energy drains category in Brazil has been performing quite strongly. We have the CAGR of the last 4 quarters, it's been growing around 25% growth. So overall, we believe that we are capturing share versus other competitors. It's been boosted mainly by portfolio innovation, which we have launched a couple of new flavors and also complementing a lot our strategy together with sports rings and CSDs overall. Ian Marcel Craig García: Alvaro, in terms of household penetration versus geographic expansion, coverage does continue to increase. we track it to continue to increase. So there is not really geographic expansion but improvement in coverages per se, and improvement in household penetration. You have to -- it's worthwhile to consider that these categories has a bunch of tailwinds including GLP one, it's amazing what's happening in energy. Half of it volumes are now in so sure or no-cal offerings. So we only expect positive things from Monster. And it's really performing well across all geographies, not only in Brazil but everywhere. Operator: Our next question comes from Ben Theurer for Barclays. Benjamin Theurer: Yes. Good morning. Thanks for that, Ian, Jerry, Pam and Alvaro for letting me ask that Mexico question. So on that, it would be great if you could help us unpack a little bit the performance throughout the quarter, especially considering we had a couple of easier comps last year from very bad weather, if I remember right. So I want to understand a little bit the dynamics throughout the quarter. And in line with that, what your expectations are for the back half, just considering that relatively soft consumer and probably continued headwinds from those tax increases that we got with the beginning of the year. Thank you very much. Ian Marcel Craig García: So Ben, you're right. The volumes improved sequentially. So if we look within the quarter, the first 2 months were negative, slightly negative, around the 3.5% range. And then June, it picked up to a growth of over 12%. But that, like you rightly pointed out, it was mostly due because of -- we have seen trends continue to improve. So that's good for Mexico. And I think we have quite a bit of share cushion in Mexico. So going forward, I think this leaves us room to consider starting to catch up the -- what we had of the gas lift in pricing with inflation. So things are looking slightly improved in Mexico, but I would say the environment competitive-wise and consumption-wise is still challenging. So you'right, the comps get easier. We have built a share cushion, but I wouldn't say we're off to the races in Mexico because there's still a sluggish consumer environment overall. Operator: Our next question comes from Henrique Brustolin from Bradesco. Henrique Brustolin: I would like to follow up precisely on the point of pricing in Mexico. We saw another quarter of realized prices slightly down year-on-year. So if you could help qualify the impact that mix had here from the impact that actual price increases or not have taken. And if you could just expand on the comment of catching up pricing with inflation going forward on how you are thinking about that? That would also be really helpful in thinking the second half of the year. Ian Marcel Craig García: So Henrique, so I'll give a broader context on the strategy, which we touched upon in prior calls. And then I'll let Gerry go through the impacts which were mostly mix. So what we did this year going through the tax increase and knowing that we had a really challenging consumption environment as well is we ended up passing about 85% of the total impact that we had between tax and inflation. We didn't pass through everything. And the rationale with that was using our models and what we have learned from prior exercises, we believe this modeled a better outcome. So just to give context in the last time we had, had such a large yes price increase was 2013, 2014. In that year, we transferred a lot of price cost plus the tax, and that resulted in 190 basis points of share loss, which then rolled over into 500 basis points of share loss for continued share loss for over 8 years, which we finally arrested in 2023 when we started to grow again share. So this time, we were more -- a little bit more conservative. I think it played out perfectly because it was a big increase, nonetheless, for our consumers. So it was very tough, but we did not want to lose household penetration and consumer preference. And I think we've managed to do that, share responded. So now we have enough of a share cushion build that we can continue to pass-through in price and catch up with inflation, which we haven't done. So we should be able to finalize that in August and with the caution that we have, we should end up the year positively. It's always an uncertainty because you don't know how things are going to react. But I think our -- what our model tells us is we should be able to do it and end up the year improving our relative competitive position. That's overall as a strategy. And maybe, Gerry, if you can help expand on the price mix effects, which were the main culprit, I believe. Gerardo Celaya: Thank you, Ian. Thank you all for the question, Henrique. As Ian mentioned, I think -- and though we usually expect when we see a tough disposable income situation like the one we're facing this year in Mexico. Given the increase in the excise tax, we usually see mix shifting significantly towards more affordable packaging alternatives. But this year has been especially strong. mix has been shifting significantly towards one-way multi-serve presentations, especially the leader. And I would say that it's kind of a positive and negative situation, the impact that we see in mix flows through our P&. -- but I think it's positive that we continue seeing consumers deciding for purchases within our portfolio of alternatives. We maintain our positioning with consumers within households, which should position us well for the recovery year after the excise tax gets cycled. So as Ian mentioned, given the share that we've built, the share cushion that we built during these past few months, we expect to close the inflation gap that we still have for the remainder of the year, which should give us a little bit of a tailwind for our P&L as the year progresses. Operator: Our next question comes from Fernando Olvera with Bank of America. Fernando Olvera Espinosa de los Monteros: Thanks for the space for questions. I have two follow-ups regarding Mexico and just one more question. The first one is related to volumes. Do you still see the minus 2, minus 4% for the year, based on year-to-date volume and consumers' behavior. And the other one is, I remember that in the first quarter, competition was aggressive. So if you can comment on that of how competition behaved during this quarter would be great. And the last question is regarding your margins in Mexico. We saw gross margin expanding 170 basis points and then operating margin contracting 110. So can you give us more color about that contraction of how much came from freight expenses and how much we're marketing. And in the case of marketing, I also want to check with you if the increase was mostly related to the Soccer World Cup. Ian Marcel Craig García: Fernando. So in terms of -- you asked about volumes competitive intensity. And then with that, I'll hand it over to you, Gerry take first two. So in terms of volume, I think like I mentioned in Ben's question. So trends have proved partially because of the base effect. But with this improvement, I would say, we should be able to move our guidance from the slightly negative to flattish. So for us, it now should be flattish volumes, right, plus months. So that's what we should expect for a full year. I would like to see the -- how volumes respond once we finished the August adjustment to recover inflation. So that's why I'm still keeping flattish, okay? For -- in terms of competitive intensity, it remains very high in Mexico. But like I mentioned, we were quite conservative we leverage our models to the fullest all of our intent agents, and it worked very well. So I mean, we're gaining like 0.5 point of share of NARTD in Mexico. So it's a lot of share gains almost 0.7 in CSDs. So everything in Mexico is green in share, everything. Every single segment, steel fruit drinks, teas, water, energy, sport drinks, ARTDs So we built a cushion. And like I said, now we can move -- it'd be too early to say if we can adjust the guidance to above flattish because precisely, we need to adjust in August and see how consumers digest this completion of the inflation pass-through. Gerry? Gerardo Celaya: So for your second part of the question, Fred, regarding operating margin, we did see impacts mainly coming from 3 factors: First one, freight, we saw a 20% increase in freight expense versus the previous year. Then we had, and I mentioned that during the prepared remarks, we had smaller operating FX gain as compared to the same period of last year. which accounted for a significant portion of that margin deterioration in this quarter. And third, and connecting it to your last part of the question, marketing expense was 9% higher. This was the biggest factor impacting operating margin -- and as you well point out, our budget for marketing this year was front-loaded to the first part of the year to support the World Cup initiatives that we I think, executed quite well during the first half of the year. Fernando Olvera Espinosa de los Monteros: Okay. So in that case, it's fair to assume that it will normalize in the second half? Gerardo Celaya: We expect for the second half of the year, a better comps in terms of marketing expense. But that should be the case. The factor that we can't foresee quite in the same way as the FX impact that we had during the second quarter. Operator: Our next question comes from Froylan Mendes with JPMorgan. Fernando Froylan Mendez Solther: So I just wanted to understand your thoughts and maybe the lessons learned from the growth in Brazil regarding the 0 portfolio translated into Mexico. We are seeing obviously very growth. But how are you able to distinguish between how much of the growth of 0 is, let's say, incremental to the category versus customers switching from the full sugar to the Zero and at what point do you think Zero becomes like the true growth driver for Mexico to grow beyond, let's say, the run rate that we have seen in the past couple of years. Ian Marcel Craig García: So look, I think your question is very, very important. So what we've seen across markets when we start to implement the Brazil playbook for Coca-Cola Zero is this consistent either high single-digit or double-digit growth year-over-year. And it's very important that we follow all of those elements in the playbook. The first years of that playbook usually Coke Zero sources growth from competitors, juices and even waters. It doesn't cannibalize in a major way, at least at first. So for example, in Mexico, we are around 4% mix. So it's very, very small mix in Brazil, we're at 30% mix. When we do start to see cannibalization and like you said, switch from [indiscernible] Coke Zero is around the 20% mix. Of course, every market is different, but this is more or less the experience that we have had -- so we do have markets above that 20% mix, such as Argentina, Uruguay, I think Costa Rica is there as well. But those markets, there is incremental growth, but there's also a large cannibalization. All of the rest, Mexico, at 4%, Guatemala is -- I don't even think gets to 2%. The rest are around Colombia, 9%, there's plenty, plenty of incremental volume to come. And that's what we're seeing in Coke. We're also starting to experiment and learn with Sprite. Sprite is a jewel that the system has that we didn't exploit connects very well with Gen Sears, and it's something that should also follow that type of trend. So we're betting a lot on side leveraging Sprite 0, and I hope to start bringing good news on Sprite going forward, but it's the same sort of playbook there. I don't know if that's helpful. Fernando Froylan Mendez Solther: It is very, very helpful. And if I could have a second question just on Brazil and Colombia, very strong results in the first half, second quarter, what could be different in second half? Or should we assume this run rate into the second half given what you're seeing on the ground? Gerardo Celaya: I can start with that question, Froy. We expect Brazil to continue performing well in line to what we've seen Colombia, you'll see an effect in the base, even though we do expect average daily sales to continue growing at the same pace that they've been growing during the first half of the year. Last year during the second half of last year, we already saw Colombia recovering performance trends. So the comps are a little bit tougher in the third quarter and fourth quarter for that operation. But we will continue to see a healthy pace of growth coming from Colombia. Operator: Our next question comes from Renata Cabral with Citi. Renata Fonseca Cabral Sturani: Thanks so much for this space for questions. My first one, a follow-up on Mexico. On the first quarter, you mentioned that consumers traded more aggressively than expected into large or service back. So my question is if that behavior stabilized during the second quarter? And if you're seeing consumers gradually returning to singles or package or it's still mix is still under pressure? And my second question is a follow-up regarding Brazil. You just said that it continue expecting with the performance in the second half of the year. But my question is more related to what happened on the second quarter related to if this 5.2% of volume growth is more related to market share gains, how the industry is going in terms of growth? And if it's possible to have some idea of how much the World Cup contributors to that would be related. Ian Marcel Craig García: Thank you, Renata. I'll kick it off. As you well point out, the first quarter, we did see a significant impact coming from mix that carried on into the second quarter, even a little bit more than what we had budgeted for at the start of the year, and we do expect that trend continues for the remainder of the year. with significant higher mix of multi-serve presentations, especially one way. Having said that, we are being very prudent in terms of measures that we're taking to support single-serve performance. We have seen a bit of an improvement, weather coming on in Mexico that usually helps single-serve presentations. And we're also investing in single-serve dedicated coolers in Mexico, which should also help performance in single-serve as we move ahead. You asked also, Renata, about the industry. So NARTD -- and this is Brazil, NARTD industry in Brazil has been growing, I would say, the last 3 months. It started out the year. I think it was growing in January, then it declined in February, March and then renew April-May-June growth. This is the industry overall. CSDs moved from, I think, negative the first bimester to flattish. We're talking volumes. And what's really driving the growth mostly was NCVs, energy, teas, juices, sports drinks, water, that was what's really growing. So that's the industry overall. So when you see our volumes growing 5.2% we're and we're gaining way above the industry. So a lot is coming from share. But like I mentioned, the industry is positive and -- but not at the level that we're doing and that's why it's translating into share. Operator: Our next question comes from Henrique Morello with Morgan Stanley. Henrique Morello: Hi, everyone. So my question is on the margin dynamics in South America. So really strong performance there, even excluding the insurance gain. So if you could just explore a bit more details on the main underlying drivers behind the margin expansion and how you are seeing those drivers progressing throughout the year in the second half and in 2027 as well. So for instance, if you could comment if Colombia with the big volume increase was an important driver or if it was more related to the hedges of raw material effects that you are cycling or maybe some SG&A efficiencies or other COGS components that maybe we don't have much visibility? And also looking at your current hedge positions for the second half for next year, thinking about Brazil and Colombia and doing very strongly and Argentina struggling a little bit when balancing those things out, how sustainable or how should we think about those margin expansion rates for the remainder of the year and for 2027 as well. Ian Marcel Craig García: Thank you, Henrique. So for us, I think we're very happy with what we're seeing in terms of margin performance from South America. And we've talked about this for a while. Our strategic playbook for improving profitability is aimed specifically at Brazil and Colombia, which are the 2 main sources of improvement in margins in South America. And what we're most happy about is that we're seeing structural improvement in margin performance in both operations in line with that playbook, so the main source of that improvement is operating leverage as we continue to grow and create efficiencies in both of our operations. It's very well translating into improvement in margins. So we do expect that, that trend continues as we move forward. I think in Brazil, we're getting to a moment where it becomes competitive to the rest of our operations. In Colombia, we think we still have a lot of headspace of improvement in profitability that will continue to flow as time progresses. We worked very hard and we had to do is, like I said, under our sustainable growth model. So it's always leveraging our RGM expertise to the fullest to make sure we continue to lead industry growth and improve our relative competitive position. And it's a year-over-year process. You get into this virtuous circle when you improve your relative scale, your size, your efficiencies and you get a more orderly market. And that's what's happening there. Operator: Our next question comes from Thiago Bortoluci with Goldman Sachs. Thiago Bortoluci: I have a follow-up on one of the latest comments from Jerry on his opening remarks. Regarding capital allocation, and the potential usages for the balance sheet, right? We understand this is still work in progress. No decision was defined. And certainly, this is not a guidance. But when you sit with the Board to discuss what are the best usages for excess cash. Any color on how to think about dividends ordinary, extraordinary buybacks the potential comfortable leverage you would be willing to get into in any time to start deploying this potential balance sheet releveraging and would be greatly appreciated. Ian Marcel Craig García: Thank you, Thiago. Yes, that's where we are. I think regarding -- and I mentioned it in the prepared remarks regarding returning capital to shareholders, we're very aware of the situation that we're facing. We think we have a clear picture of the alternatives we have. We just have to take care of the timing issue of making that decision and taking it to the Board. But we are in that process. And as mentioned in the remarks, we will let you know as this process evolves during the year. Operator: Our next question comes from Rodrigo Alcantara with UBS. Rodrigo Alcantara: Hello. Good morning, afternoon, guys. Ian, Gerry, congrats Pam and Jorge, for your appointments. I guess my question would be for in Brazil, right? As you correctly said, the growth mainly driven by share momentum, it's been a while since we have seen this strong performance when we compare to your largest competitor, right? It's been a while, not just a thing of 1 quarter or 2. So my question would be here, Ian, how far is KOF from, let's say, its first share of the Brazilian market just to understand like the room for momentum to continue. And more importantly, right, I mean, your view -- what's been driving these share gains? Are we talking price competitiveness go-to-market execution, just like consumers like in more products, the liquids that you sell, right? I mean just starting to understand these massive gains -- share gains that we have seen within the nonalcoholic system there in Brazil? And my second question would be perhaps not very far to ask you this perhaps more a question to the Coke company is in relation to innovation, you saw recently one of your competitors launching a now protein beer, right, in Brazil. And so far, aside from the Coke Zero concept, which has been a success, right, we have not seen such a big in innovation. I mean you can correct me if I'm wrong here, but from you guys from the Coke system as well. So my question would be here, I mean, what's next for Coke in LatAm for this year? I mean, any big launches you may be planning any new categories that you may be interesting to explore. That would be very helpful, Ian. Thank you very much. Ian Marcel Craig García: Rodrigo. So I will talk first about -- you mentioned the headroom or the possible headroom in Brazil and then about innovation in general. So I think in terms of headroom in Brazil, there's plenty still first from per capita per se for the industry. So there's still a lot of space to continue to grow the industry and expand the industry, and that's what we're doing. When you look by segment, then there's also headroom in terms of share in the case of Brazil, I would say, in CSDs, the main headroom is in flavors. What we've done there is amazing with the 0 portfolio. So in Brazil, we're gaining 400 basis points of share in flavors. It's wild what's happening in Brazil, and this is due to Sprite. So we made sure we were very well positioned with excellent flavor profiles in the seas category for flavors, and that's translated into very large share gains flavors. We've never seen that, and that's doing well. And we're moving the segment towards where we have better positions. When you look at NCVs, I think we've made the smart choice of focusing on the profitable NCVs, and I would say energy, there's plenty of headroom. We are around 50% share. So we still have plenty to go there. This it depends on innovation, and there, I agree with you that we've been a little bit behind the ball, and I'll talk about innovation a little bit in a general context. So I'll say, we have that work to be done in this sports drinks were innovating well. We need to lead the industry there on oral enhanced hydration. So that's something that we're lagging and in [indiscernible], it's really been capacity that we've been missing and we're investing behind that. We have a lot of our stocks in water. So I would say for Brazil, there's still plenty of headroom, like I mentioned, within those categories. When we talk about innovation in general, the first message that I would like to give is, I think I'm very confident that we've mapped out in every country, let's say, the top 3 value buckets in terms of innovations that we need to address. And Coke company is working very closely with us and addressing those top 3 boxes. They vary by countries, but they're working very hard on that. Are we as fast as we could be? No. But what we've done or what the company is doing is they've reorganized themselves into 3 different marketing and development units in LatAm. So one is Mexico, one is Brazil and the rest. And those are decentralized. So we do expect to see an increase in the pace of delivery of these products. So it's still to be seen because -- but the team is now in place, and we should start to see more speed in the pipeline. The way these buckets of value have been identified, it's clear and perfectly in line with both companies and I'm pretty confident. So in Mexico, we had volume opportunities in as Frescas, [indiscernible]. We just started delivering [indiscernible]. It went so well that we ran out of concentrate. So now we're going and fixing that. And the other 2 buckets should be coming in the fourth quarter and first quarter. So it's not as fast as we would like, but they will be addressed and they will be addressed with fantastic formulas and brands. So I'm confident that when that starts to flow through in the fourth and first quarter for Mexico, we should start to see some really good results. For the other countries, the big issues are mostly, I would say, still in profitable NCVs, whether it be [indiscernible] and, of course, energy. Moving to local production. So everything I believe that is large and relevant has been mapped and should be addressed between the fourth quarter -- and I would say the first half of next year. So I think the pipeline is pretty robust, Rod. It could be faster, yes. but it's pretty robust and it should start to gather speed as a team is in place and starting to deliver without having to go through internal LatAm or corporate Atlanta protocol. So they've been empowered and should be going faster. So I'm pretty confident that this should continue with what we're getting ready to launch. Gerry you wanted to say something? Gerardo Celaya: I wanted to add on your first part of the question regarding share performance. You asked about the drivers of share performance in Brazil. And you mentioned a few I would say all of those factors are contributing to that share performance. Obviously, the quality of our portfolio maintaining our focus on affordability and being present in the consumers' consumption occasions. But I would like to stress our execution capabilities, especially when it relates to our digital capabilities. As you remember, we completed our omnichannel digital ecosystem in Brazil as our first market that from there, rolled out to Mexico and this year is finishing in the rest of our operations. And this is a very important factor because it allows us to much better understand the dynamics at the point of sale and much more effectively execute on those opportunities using our digital capabilities with guided missions and our loyalty program as an incentive mechanism to our customers to help us with execution at the point of sale. This has resulted in improving combined coverages in our stores. And we already see the benefits of that platform translating into the performance that we're also seeing in share in Mexico. Ian mentioned all our Board looks green in share performance in Mexico. And we expect to see those tailwinds coming also in the rest of our operations as this year progresses. The next question comes from Alejandro Fuchs with Itau. Alejandro Fuchs: Thank you, operator. First of all, congratulations to Pamela Jorge and Lorena on the new responsibilities. I have two quick ones, if I may, in Brazil. The first one is after this strong quarter of volumes in the last couple of quarters that we have seen. Maybe, Ian, I wanted to see if you could elaborate a little bit more how Juntos adviser is helping the team on his execution and driving also part of this strong growth. That will be the first one. And then the second one, I wanted to touch on your comment on regulatory changes potentially coming to Brazil next year. I wanted to see if that ends up happening if the strategy would be similar to the implementation in Mexico this year, right, in terms of price that I thought it was very interesting what you explained. So those would be the two ones. Ian Marcel Craig García: Thank you. I'll start at the end and then let Pam and Laura and Gerry to complement me on the advisor figure. So it's still early to say how we would address a potential selective tax increase in Brazil. It's too early. We don't know whether that tax will be at a level that keeps us whole versus the taxes that we have this year. So remember, the amount of federal taxes in Brazil are being reduced and consolidated. So if that tax is set at a certain threshold, then it would be a wash, and there wouldn't be a tax increase. If they set it up at a higher threshold then there would be a tax increase, and we would have to really analyze, Alejandro, what is the magnitude of that potential increase. So in Mexico, the magnitude was very, very large. So it didn't really make sense for us like I said, based on prior learnings to pass all of that together with the inflation in one shot, it was -- it would have been just too much. So it depends on that magnitude. So I can tell you this. If it would be a very large magnitude then probably, we might do something like the Mexico one. If it was a wash or there wasn't -- it wasn't a large increase, then I think you could be a lot more comfortable in passing all of it through together with the tax. So it's still a little bit early to determine that because we have no visibility whatsoever yet on what it's going to be, okay? And at the same time, there's the potential in Brazil to change the labor journey from 61 days to -- that also has an impact on costs and employment. And that's also something that I believe a lot of people are starting to realize how inflationary it's going to be and how disruptive it could be given that Brazil is at absolute full employment and very tight labor markets. So you all [indiscernible] to deal with whether it does or does not go through more and more, I'm keen that it might not go through because it's disruptive. So my main comment is there are two many variables either on the cost side with this label potential labor journey adjustment or on the magnitude or not of the tax increase, to really give you a description of what we plan to do yet, Ale. Gerry you can go through the figures on advisers. Gerardo Celaya: Regarding adviser, Alejandro, a few data points that I think are helpful we have adviser rolled out in our Brazil and Mexico operation. We started out at Brazil. And we see consistent performance numbers in both operations in both positive numbers coming from the use and the implementation of advisor. We see improvement in geoefficiency and the visitation of our customers. We see, and this is a very important part of the results that we're seeing in share in both operations. We see improvements in combined coverages, both for CSDs and stills. Larger in Brazil that were coming from more headroom and improvement in both CSDs as in stills. In Mexico, even though we do have high combined coverages already, we still see improvements of about 3 percentage points in combined coverages for our whole portfolio. We see improvements and the quality of admissions that we're executing at the point of sale, both from our resellers when they visit the store as well as from our customers that we recruit as part of our execution team using our loyalty program. 100% of our pre-sellers are using adviser as their sales tool when they visit the store, which achieved the omnichannel experience, commercial experience and tactics for each of our customers. which is very, very personalized by customer looking to maximize value generated for the customer as well as for the company. So those are a few of the data points that we're following we're expecting to launch adviser in the rest of our operations through this year. We're working on this. So by next year, we will be able to share performance improvements in the rest of Coca-Cola FEMSA with adviser rolled out. Operator: Our next question comes from Carlos Laboy with HSBC. The microphone is open. Carlos Alberto Laboy: There we are. In addition to Zero, have you reformulated brand Coca-Cola this year? For lower chloride content in Mexico? And if so, can you share with us maybe some of the benefit that this is having in terms of lower sugar costs for your gross margins? And then second, to what do you attribute the growth in one-way mix while the consumer remains really banged up here in Mexico? Is the refillable proposition price gap working well enough? Or is there something else at play here that is not giving you the refillable lift at a time like this. Ian Marcel Craig García: Carlos, so the first point of your question, we haven't reformulated to reduce caloric content in the original flavor formulas of cohort or flavors in Mexico. So we haven't done that. So there's nothing there of uplift in -- by reducing full calorie sweeteners or to increase artificial sweeteners mix. That is not something that we're doing there. In terms of why I would say, why multiserve one way is performing better than refillables there's -- it's not that refillables are performing poorly. It has to be looked at through more through the lens of the price points. So we're analyzing -- so we are doing well with refillable just single serve -- sorry, not single serve. One way multiservice is performing better. And what we're analyzing is we moved the way in the refillables from a price point that we need to get to the formula where it gets, it's exactly parity price for our main competitors. And for that, we would need a 2-liter refit, but it's a relevant investment and what we're looking at there is first a pilot to see if it makes sense before we go down that route. So we're off of the price point where we need to be, and we would need to have a 2-liter rep. So if that works, Mexico would be the only market where we would have Three different multi-serve returnable presentations. So all markets have one glass and one PET multi-serve turnable. That no longer gets us to the price point where we need to be in Mexico, Carlos. So we would need to have a third one, a third -- so before we go down that route, the pilots need to show us what the metrics are accretive. Operator: The next question comes from Emiliano Hernandez with GBM. Emiliano Hernández Marvan: Congrats on the results, and thanks for the question. Maybe just a quick follow-up in Mexico. Could you comment on the regional performance? How did the Southeast perform relative to the Central region? Are you seeing meaningful difference in consumer these geographies putting aside the World Car boost, which to assume have more benefits in the Central region. Thank you very much. Ian Marcel Craig García: So we saw -- thank you, Emiliano for the question. We saw uniform performance across all our regions. We had seen Southeast underperforming in the first quarter, so we're happy to see Southeast Mexico now performing significantly better. But I would say performance during the quarter was uniformly positive across all of our operations. The World Cup, as Ian mentioned in prepared remarks, I think it was a very successful event in terms of the way that the consumer market, in general, interacts with the brand, especially the Coke brand as well as power rate, which were the brands that were flagship for the World Cup. So that was a very positive development. But we're happy to see the regional performance across our territories being uniformly strong. Operator: The next question comes from Antonio Hernandez with Actinver. Antonio Hernandez: Congrats on your results. Just a quick one regarding raw materials you already mentioned your hedging strategy and how far you are in terms of hedges for this year and next year. But wanted to get a sense if these raw materials are maybe if you're facing higher prices? Or how do you see overall raw materials for the next year, even with hedges. Ian Marcel Craig García: So for this year, as compared to last year, we up to now have seen this benefiting our performance. As you well mentioned, and I mentioned in the prepared remarks, we have significant portion of our exposure hedged for this year. So that certainly has helped. I would say the spot prices for raw materials are very volatile and very dependent on developments in Middle East. We do see that volatility, specialty on energy-related raw materials. But given that we have this hedging process in place that allows us to have or reduce volatility significantly on our results. We continue benefiting from that reduction in volatility and it's especially helpful in years like this one where you see pressure to the upside in prices. But it works well in any scenario because it allows us to provide more certainty to our operators for them to focus on market decisions and pricing decisions related to market dynamics rather than volatility coming from outside factors. So that's a little bit of where we are in terms of our hedging strategy and raw material environment expecting to see or to continue seeing that volatility as the year progresses, but we're okay with our hedging positions that allow us to reduce that volatility. Antonio Hernandez: Okay. And this hedges for next year, are they -- how do they compare versus this year's hedges? Ian Marcel Craig García: Yes. For next year, we already started positioning our hedges also with a very attractive positioning, especially on sweeteners, both HFCS as well as sugar. On packaging, we're also -- we also already have a pretty high position in hedging for '27 in aluminum. What we still have are lagging a little bit behind this on PT hedges for next year. We're looking for alternatives to start hedging for next year and you may imagine that with volatility and uncertainty coming from the Middle East are waiting a little bit to see how this evolves so that we can start positioning our hedges for next year. So that's I think the packaging exposure that we have for 2027. Operator: Next question comes from Felipe Ucros with Scotiabank. Felipe Ucros Nunez: Great. Thanks, operator. Good morning, Ian, Gerry and team, thanks for the space, and congrats open. I think most of my strategic questions were asked, but I have a quick one on the possibility of a stronger than usual El Nino. It looks like you're pretty much covered on the hedging of raw materials that could move because of La Nina. So I think the risks are probably down to the top line at this point, whether you have a lot of precipitation or cold conditions versus whether dry or hot. Just wondering how you see that mix across your regions? Is this a phenomenon that makes things better. I know, for example, in Colombia, where I grew up, it does get drier and hotter. But just wondering how that mix comes out across the entire region that you cover. Ian Marcel Craig García: Felipe. So obviously, it's very dangerous to go in to forecast this type of events. So like you said, what we can mention is what's happened in the past. So what's happened in the past for of, it's been positive, except for Southern Brazil and Argentina Euro. So overall, it's very positive, let's say, from Parana up north. It's in Brazil is positive, and it tends to be more precipitation for -- from Southern Brazil Uruguay and Argentina. So that's like the overall mix effect for cost. It's still -- it's always a challenge to forecast the weather. But like you said, that's what we've seen in Colombia, Venezuela, Central America in most of our territories in Mexico, but -- and it's more rainy for South Brazil, Argentina and Urba. Up to now -- up to now, Felipe, we haven't seen significant disruptions in weather patterns. So even though we do expect that the phenomenon materializes as the year progresses. Up to now, I think it's been fairly in line with typical weather patterns across the board. Operator: the next question comes from Ricardo Alves with Morgan Stanley. Ricardo Alves: Ian, Gerry, nice chatting with you. We thought that this quarter was remarkable. And you made us think about the last few years, when I guess that this question is more to Ian, but when you assess the strategy you've implemented over the past 3 years or so, I think that there are multiple clear successes, right? The penetration of Juntos+ was quite impressive. The expansion of no sugar that we discussed today, no sugar beverages, share gains in Mexico. I would be curious, however, on the areas that are still concerning you, what are you thinking about when you're looking at the next couple of years if we're assessing, again, the strategy? Because I think that -- this was a long conference call when we talked about many, many different things, right? Shorter-term issues like the soft Mexican consumer and how you're tackling the affordability in Mexico discussions of how challenging or not Brazil could be next year with the changes you talked about innovation. So there is still a lot. It seems that there is a lot to be working with and be excited about. But what would be I guess, the top priorities, what is on the top of your mind for the next couple of years. Congrats, guys. Ian Marcel Craig García: Thank you, Ricardo. I believe that you asked in terms of risks. And I think we covered those. So in terms of risk, really, we would be continuing below potential growth in Mexico something that would be a concern for us. There's plenty of potential in Mexico and finding a way to unlock that and translating into consumption. And specifically, the main concern, although I think there could be a silver lining and a positive outcome here would be the potential for the Brazil tax and the labor reform. So I would see -- those would be the major risks out there. Everything else, we happen to be in a vibrant industry in a part of the world where we have positive demographics and disposable income trends over the next 10 to 15 years. So there's a lot of tailwinds to us. And I think we've gone into a very positive flywheel in every country. where we're expanding relative scale, which gives us a more rational industry, and we can focus on growing the pie. I think -- I don't remember who made the question on the innovation piece. We could do a little better there, but I'm also pretty confident on how that thing goes. So I wouldn't say that anything is taking over my sleep. Except like I said, whether we continue with a slower than potential growth in Mexico, although we would be outperforming there. And if in Brazil, things get to an adjustment year '27 because of a tax and potential labor journey. But that's basically it. We're very fortunate to be in the industry we are in. We have a great partner, great formulas, great brands. I wouldn't substitute my portfolio for anyone else's. And with the introductions that we should be doing and the digital enablers [indiscernible], I think it's just giving us an edge and making it -- I wouldn't say easy, but making it every day, a little bit more targeted approach with our sales team. So we're really confident on how things are moving with those two risks that I highlighted. Pamela Ortiz: Thank you all for your interest in Coca-Cola FEMSA and for joining us on today's call. As always, the IR team are available to answer any of your remaining questions. Thank you. Have a great week. Operator: Thank you. This concludes today's presentation. You may disconnect now and have a nice day. Before you buy stock in Coca-Cola Femsab. 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 Coca-Cola Femsab. De C.v. wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $377,990!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,518!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of July 27, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Coca-Cola FEMSA (KOF) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Coca Cola Femsa S.A.B. de C.V.? Here are five stocks we like better. Coca-Cola FEMSA delivered solid Q2 growth: Volume rose 3.5% to 1.1 billion unit cases, revenue increased 4.7% to MXN 76.3 billion, and adjusted EBITDA grew 12.1% to MXN 15 billion. Lower sweetener and PET costs helped expand gross margin by 180 basis points. Mexico remained a pressure point but gained market share. Volume increased 1% despite excise-tax effects and weak consumer demand; management now expects full-year Mexican volume to be approximately flat and is evaluating the impact of an August price adjustment. South America was the main growth engine: Regional volume rose 6.9%, with especially strong performances in Colombia and Brazil, driving a 46.5% increase in division operating income. The company maintained its 2026 capital-expenditure target of 7%–7.5% of revenue and is reviewing options for shareholder returns. Coca-Cola EuroPacific Partners is a tasty play on Coke Coca Cola Femsa (NYSE:KOF) reported second-quarter 2026 volume, revenue and profit growth, supported by record quarterly volumes in Brazil, Colombia and Guatemala, while Mexico continued to contend with an excise-tax increase and softer consumer demand. Chief Executive Officer Ian Craig said consolidated volume rose 3.5% to 1.1 billion unit cases. Revenue increased 4.7% to MXN 76.3 billion, or 6.6% on a currency-neutral basis, as volume growth and revenue-management actions more than offset unfavorable product mix and currency translation effects. → MarketBeat Week in Review – 07/20- 07/24 5 NYSE-Listed Emerging Market Stocks For Income Investors Gross profit increased 8.8% to MXN 35.9 billion, with gross margin expanding 180 basis points to 47.1%. Craig attributed the improvement primarily to lower sweetener and PET costs, aided by the company’s hedging strategy and the appreciation of most operating currencies against U.S. dollar-denominated input costs. Higher aluminum costs partially offset those benefits. Operating income increased 9.1% to MXN 10.7 billion, while adjusted EBITDA grew 12.1% to MXN 15 billion. The company’s operating results included MXN 265 million in recovered insurance claims in Brazil. Excluding that item, operating income would have increased 6.4% and adjusted EBITDA would have risen 10.1%, according to management. Majority net income increased 16.9% to MXN 6.2 billion, reflecting higher operating income and a lower effective tax rate. → Volatility Is Back and These 3 Market Tollbooths Are Best Positioned to Profit Price Growth & Yield: For That Magical Combo, Leave the U.S. Mexico’s volume grew 1% from a year earlier, though Craig said the business remained affected by the excise-tax increase and subdued consumer conditions. Management said it gained share across markets and categories during the quarter and expects to use that improved competitive position to gradually close the remaining gap between pricing and inflation. Craig told analysts that volumes in Mexico were slightly negative during the first two months of the quarter, at roughly a 3.5% decline, before rising more than 12% in June, largely due to easier comparisons. The company now expects full-year Mexican volumes to be approximately flat, rather than slightly negative, though it wants to evaluate consumer response after an expected August pricing adjustment. → 2 Stocks Built to Thrive If Inflation Refuses to Fade The company said it passed through about 85% of the combined impact of taxes and inflation rather than the full amount at once. Craig said the approach was intended to avoid losses in household penetration and consumer preference, citing the larger share losses that followed a prior tax-related price increase in 2013 and 2014. Mexico’s product mix continued shifting toward more affordable one-way multi-serve formats, particularly three-liter packages. Chief Financial Officer Gerardo Cruz said the mix shift weighed on reported pricing, but also showed consumers were remaining within the company’s portfolio. Coca-Cola Zero grew 24% in Mexico, while Powerade gained 150 basis points of share during the FIFA World Cup period, aided by the introduction of Powerade Zero and limited-edition flavors. Digital sales through the Juntos+ platform represented 38% of traditional trade sales and 19% of total Mexican revenue. The company also said it is investing in dedicated single-serve coolers to support those packages. South American volume increased 6.9% to 426 million unit cases. Revenue in the division rose 11.8% to MXN 30.9 billion, or 14.1% on a currency-neutral basis. Division operating income climbed 46.5% to MXN 4.3 billion, including the Brazilian insurance recovery, and operating margin expanded 330 basis points to 13.9%. Brazil volume rose 5.2%, supported by commercial execution, digital capabilities and World Cup-related campaigns. The company said it outpaced the broader non-alcoholic ready-to-drink industry and gained share across categories. Coca-Cola Zero volume grew 15%, Sprite Zero posted triple-digit growth, and still beverages grew 23%, led by Monster, teas and Powerade. Craig said Brazil still has room for growth in flavors, energy drinks, sports drinks and water. He also noted that the company is monitoring potential regulatory developments for 2027, including the possibility of tax changes and labor-related reforms, though management said it is too early to determine the magnitude or business implications of any potential changes. Colombia delivered the strongest volume increase among the company’s major markets, with volume up 17.7%. Management cited a minimum-wage increase, improving consumer conditions and commercial execution. Flavors volume rose 27.2%, led by the Cuatro grapefruit beverage and Sprite. The company also cited strong performance by Powerade and Monster, along with gains in customer engagement through Juntos+. Guatemala volume rose 3.4%, supported by stronger household consumption and remittances. The company said its customer base expanded 5.2% to about 156,000 customers, while cooler coverage increased to 78.8%. Argentina volume declined 2.8%, primarily due to a truck-driver strike and continued softness in consumer demand, although the company said it gained 100 basis points of carbonated soft-drink share through affordability and revenue-management actions. Cruz said the company’s comprehensive financing result was an MXN 1.3 billion expense, compared with an MXN 1.2 billion expense a year earlier. Higher net interest expense following new debt issuance in the first quarter and lower gains on financial instruments were partly offset by a higher foreign-exchange gain tied to the Mexican peso’s appreciation against U.S. dollar-denominated net debt. For 2026, Coca-Cola FEMSA had hedged 65% of PET needs, 96% of sugar, 98% of high-fructose corn syrup and 73% of aluminum requirements. For 2027, it had hedged 80% of sugar and high-fructose corn syrup requirements and 54% of aluminum requirements. Management said it was still seeking opportunities to build PET hedges for next year amid commodity-market volatility. The company continues to expect capital expenditures of 7% to 7.5% of revenue in 2026. It cited new PET production capacity in Costa Rica and a new aluminum-can line in Uruguay as recent investments. Cruz also said the company is reviewing alternatives for returning capital to shareholders and will provide updates as that process develops. Craig opened the call by addressing the June 24 earthquakes in Venezuela. He said the company, FEMSA and The Coca-Cola Company were supporting affected employees and communities, including through donations of more than 100,000 liters of water and other emergency supplies. Coca‑Cola FEMSA (NYSE: KOF) is a large multinational beverage bottler and distributor operating primarily in Mexico and across multiple markets in Latin America. As a principal franchise bottler for The Coca‑Cola Company, the firm is responsible for producing, packaging, marketing and distributing Coca‑Cola branded beverages and a wide range of nonalcoholic drinks to retail and foodservice customers throughout its territories. The company's product portfolio includes carbonated soft drinks, bottled water, juices, ready‑to‑drink teas and coffees, sports and energy drinks, and other noncarbonated beverages. 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 "Coca Cola Femsa Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Coca-Cola FEMSA. de (KOF) has just opened its 2026 story with first quarter earnings, reporting MX$70,925 million in revenue, MX$4,342 million in net income, and an updated segment structure that highlights OXXO Mexico and South America volumes. See our latest analysis for Coca-Cola FEMSA. de. At a share price of US$101.71, Coca-Cola FEMSA. de has seen a 7.24% year to date share price return. Its 1 year total shareholder return of 13.18% points to momentum that has been building over several years, with a 5 year total shareholder return of 160.08%. If Coca-Cola FEMSA. de’s latest earnings have you thinking about other consumer names with long runways, it could be a good time to broaden your search and check out 18 top founder-led companies With revenue holding near last year’s level but net income lower, and the share price sitting at US$101.71 after strong multi year returns, the key question is whether KOF is still undervalued or if the market is already pricing in future growth. At a last close of $101.71 versus a narrative fair value of $115.81, the most followed view sees KOF trading at a discount built on measured growth and profitability assumptions. Read the complete narrative. Read the complete narrative. Want to see what sits behind that margin story and the implied upside? The narrative leans on specific revenue growth, earnings expansion and a higher future earnings multiple. The exact mix matters. The detailed model shows how those moving parts combine into the current fair value call. Result: Fair Value of $115.81 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, those assumptions can unravel quickly if weaker consumer demand in Mexico and Colombia persists, or if FX swings and rising freight and labor costs keep pressuring margins. Find out about the key risks to this Coca-Cola FEMSA. de narrative. With both risks and rewards in focus, it makes sense to move quickly from headlines to hard numbers so you can stress test your own thesis using the 3 key rewards and 1 important warning sign If you stop here, you risk missing out on other high quality opportunities that match your style, so put the Simply Wall Street Screener to work for you. Target resilient companies built for staying power by scanning 67 resilient stocks with low risk scores that may better fit your comfort with volatility. Spot potential value opportunities early by reviewing 51 high quality undervalued stocks that combine quality fundamentals with pricing that some investors might overlook. Strengthen your watchlist with businesses backed by robust finances using the solid balance sheet and fundamentals stocks screener (45 results) so you focus on balance sheet quality first. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include KOF. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

MONTERREY, Mexico, April 30, 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 first 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 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 6.1% and Income from Operations increased 5.5% compared to 1Q25. OXXO Mexico: OXXO Mexico total Revenues grew 8.3% and Income from operations increased 20.9% versus 1Q25. SPIN: Spin by OXXO had 11.0 million active usersA representing 22.3% growth compared to 1Q25 while Spin Premia had 28.4 million active loyalty users2 representing 12.8% growth compared to 1Q25, and an average tenderB at OXXO Mexico of 50.6% which increased from 42.5% in 1Q25. COCA-COLA FEMSA: Total Revenues grew 1.1% and Income from Operations decreased 2.3% against 1Q25. Financial Summary for the First Quarter 2026 Change vs. comparable period Jose Antonio Fernández Garza-Lagüera, FEMSA’s Chief Executive Officer, commented: “FEMSA delivered a strong set of results for the first quarter. OXXO improved its operating income by double-digits in its key markets, handily outpacing revenues and expanding margins, while Coca-Cola FEMSA demonstrated its resilience and flexibility in the face of a challenging consumer environment in the core Mexican market, partially offset by a strong performance in South America. We should highlight the sustained recovery at OXXO Mexico, building on the positive trends we first saw during the fourth quarter of last year, and delivering high-single-digit revenue growth on the back of continued expansion and strong same-store sales despite a volatile environment. During the quarter, we also began to see the benefits from a leaner overhead structure and increased efficiency. Beyond Mexico, our Americas and Mobility operations delivered a compelling set of numbers, particularly Chile, Peru and Colombia showing double-digit growth in same-store sales and a significant narrowing of losses as we steadily improve our footprint. For its part, Coca-Cola FEMSA gained market share in most of its markets and categories and achieved record volumes for a first quarter in several markets, including Brazil, Colombia and Guatemala. As we look ahead towards what we expect should be a strong summer season due in part to the World Cup, we continue to like our current momentum across most of our business units, and we are optimistic as we execute against our long-term strategy in pursuit of sustainable profitable growth and despite the complex international macro environment.” 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. ___________________________ (1) Please refer to page 11 for our definition of “comparable” and a description of the factors affecting the comparability of our financial and operating performance. A 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. B Tender: OXXO MXN sales with Spin Premia redemption or accrual / Total OXXO MXN Sales, during the period. C Only includes retail. Same-store Sales includes a weighted average of OXXO Americas (USA, Brazil and Latam). CONTACT: Investor Contact (52) 818-328-6000 [email protected] femsa.gcs-web.com Media Contact (52) 555-249-6843 [email protected] femsa.com

Consolidated results: Q1 volumes rose 1.2% to 998 million unit cases and gross margin expanded 150 bps to 46.9% (revenues MXN 70.9bn), but operating income fell 2.3% and majority net income declined 15.5% as severance, higher IT/SAP costs and a worse financial result weighed on the bottom line; on a currency-neutral basis revenues and adjusted EBITDA grew about 6%. Mexico weakness but share gains: Mexico volumes declined 2.6% after an excise tax hike and softer consumer demand, yet the company gained CSD and NARTD value share and pursued affordability actions (expanded 3L one‑way coverage, smaller single‑serve packs) plus cooler and digital execution to protect penetration. South America outperformance: South America volumes rose 4.8% (453.9m cases) with revenues up and operating income increasing 18.8%, driven by record quarters in Guatemala, Colombia and Brazil, favorable input costs and strong execution on low/no‑sugar and multi‑serve initiatives. Interested in Coca Cola Femsa S.A.B. de C.V.? Here are five stocks we like better. Coca-Cola EuroPacific Partners is a tasty play on Coke Coca Cola Femsa (NYSE:KOF) reported first-quarter 2026 volume growth of 1.2% to 998 million unit cases, as strength across most territories offset a decline in Mexico amid an excise tax increase and softer consumer conditions. Total revenues rose 1.1% to MXN 70.9 billion, while gross profit increased 4.5% to MXN 33.3 billion, expanding gross margin 150 basis points to 46.9%. CEO Ian Craig said Mexico faced “near-term headwinds” from the tax increase and weaker consumer dynamics, but added the company’s commercial plan—developed with The Coca-Cola Company—helped protect its market position. Craig highlighted a 0.6 percentage point gain in value share for carbonated soft drinks (CSDs) and a 0.4 percentage point gain in non-alcoholic ready-to-drink beverages (NARTDs) in Mexico as evidence the strategy is working. → Palantir Is Down 30%: Noise? Or a Signal to Accumulate? 5 NYSE-Listed Emerging Market Stocks For Income Investors Craig said revenue management initiatives supported revenue growth, but results were “partially offset by unfavorable mix effects and headwinds related to the currency translation” of operating currencies into Mexican pesos. Excluding currency headwinds, total revenues increased 6.0% and gross profit rose 9.5%. Operating income declined 2.3% to MXN 9.0 billion and operating margin contracted 50 basis points to 12.7%. On a comparable basis, Craig said operating income increased 2.6%, with margin pressure attributed mainly to right-sizing severance expenses and increased IT spending tied to the company’s SAP S/4HANA ERP implementation. The company also recorded higher marketing and depreciation, partially offset by expense controls in areas such as maintenance and freight. → Corning Beats Q1 Estimates but Drops 9% on Guidance Miss Price Growth & Yield: For That Magical Combo, Leave the U.S. Adjusted EBITDA increased 0.9% to MXN 13.4 billion, with adjusted EBITDA margin flat at 18.9%. Excluding currency translation, comparable adjusted EBITDA increased 6.1%. Majority net income fell 15.5% to MXN 4.3 billion, which CFO Gerardo Cruz attributed primarily to a higher comprehensive financial result. In Mexico, volume declined 2.6% year over year. Craig cited an excise tax increase and “a soft consumer backdrop,” noting Nielsen’s fast-moving consumer goods (FMCG) basket in the company’s territories declined close to 3% in volume and inflation expectations moved higher in recent forecasts. → Did Qualcomm Just Put Apple in Check? Craig said the company emphasized affordability and portfolio breadth, including expanding coverage of Coca-Cola’s one-way 3-liter presentation by more than 7 percentage points, which he said drove 32% volume growth in March versus the prior year. He also highlighted continued growth in low- and no-sugar offerings, including Coke Zero, which he said grew 10% in the quarter, supported by accessible single-serve packs such as 200 ml and 355 ml one-way PET bottles. In flavors, Craig said the company increased coverage by more than 10 percentage points across brands including Fanta, Sprite, and regional brands such as Mundet and Ameyal. He also pointed to share gains in non-carbonated categories, including “more than 3% points of share” in both energy drinks (Monster) and teas (Fuze Tea). On execution, Craig said Coca-Cola FEMSA installed more than 47,000 cooler doors in the quarter—“equivalent to 50% of the total coolers we installed during 2025”—as it worked to improve performance in traditional trade. He also cited progress with the Juntos+ Advisor tool in Mexico since its September 2025 launch, including visitation improving 3 percentage points to 93.6% and combined coverage improving 2.8 percentage points to 81.3%. During Q&A, Craig described uneven regional trends within Mexico, calling the Southeast the “most sluggish region,” attributing it to lingering effects from the wind-down of large government infrastructure projects. He also contrasted the company’s response to the current excise tax environment with the 2013 tax episode, saying the company is now using more segmented revenue growth management supported by digital tools to avoid household penetration losses. Craig said the company intends to emerge from the current period with a strengthened competitive position. Asked about category performance in Mexico, Craig said still beverages underperformed sparkling largely due to a “specific issue with a very large chain in Mexico” that adjusted parameters for Powerade. He said the issue was being addressed and should begin to adjust in May and June. He also said bulk water volumes were pressured after the company adjusted pricing, calling it a large volume driver but not a major profitability driver. On channels, Cruz said the company prioritized the traditional channel after the excise tax impact, taking differentiated pricing actions by channel. He said traditional trade performed “slightly better than what we had planned,” while modern trade underperformed partly due to the Powerade issue. Craig also said mix effects were a notable surprise versus plans, with consumers shifting “more towards multi-serve” than expected after the tax-driven price increases. Investor Relations Director Jorge Collazo added that, for one-way versus refillables, “there is more one way than refillables at this point.” Craig said Central and South America delivered solid performance, including record first-quarter volumes for Guatemala, Colombia, and Brazil. In Guatemala, volumes grew 2.7% despite disruptions early in the quarter from unfavorable weather and a government-declared curfew; Craig said March became a record month as conditions improved. He also cited growth in hydration and energy brands including Dasani, Shangri-La, and Monster. In Brazil, volumes increased 3.6%. Craig attributed performance to disciplined execution and digital capabilities amid constructive consumer dynamics, citing low unemployment (5.8%) and real income growth above 5.7%. He highlighted double-digit growth for Coke Zero (11.4%), and said Sprite grew more than 30% year over year as the company applied a Coca-Cola Zero playbook to Sprite Zero, which he said now accounts for more than 27% of total Sprite volume. Craig also said Powerade Zero exceeded expectations and represented 9% of the Powerade mix, while Monster’s zero-sugar variants accounted for 45% of total Monster mix and more than 60% of its growth. In Colombia, volumes rose 8.9%. Craig cited an improving consumer environment and initiatives to adjust price architecture in Coca-Cola, including affordability actions that supported 30% volume growth in multi-serve one-way Coca-Cola presentations. He said the flavor sparkling portfolio increased 15% driven by Quatro and Sprite initiatives, Powerade grew 10% on FIFA World Cup-related efforts, and Monster grew more than 30%. In Argentina, volumes increased 5.4%. Craig described a “heterogeneous recovery” and soft employment weighing on consumer confidence, while Nielsen’s FMCG basket remained flat. He said the company maintained an affordability proposal and grew coverage of its “Zona de Ahorro” initiatives by 8 percentage points year over year, while Sprite and Sprite Zero delivered double-digit growth and Coke Zero grew 10% to reach 20.9% of Coca-Cola mix. Craig also said the company gained more than 4 percentage points of share in Powerade and added more than 7,000 digital customers through Juntos+. Cruz reported that Mexico and Central America volumes declined 1.6%, with Mexico’s 2.6% decline partially offset by growth in Guatemala, Nicaragua, Panama, and Costa Rica. Division revenues fell 1.4% to MXN 39.1 billion, though on a currency-neutral basis revenues increased 1.4%. Gross profit increased 0.7% to MXN 19.0 billion, lifting gross margin 100 basis points to 48.6% due to lower sugar and PET costs and the Mexican peso’s appreciation against the U.S. dollar, partially offset by unfavorable mix after the excise tax increase. Mexico and Central America operating income declined 17.4% to MXN 4.5 billion, with operating margin down 220 basis points to 11.4%. Cruz cited currency effects, severance tied to right-sizing, increased IT spending related to SAP S/4HANA, and higher marketing and depreciation. Adjusted EBITDA in the division decreased 9.9% and margin declined 170 basis points to 18.2%. In South America, volumes increased 4.8% to 453.9 million unit cases and revenues rose 4.3% to MXN 31.8 billion. On a currency-neutral basis, revenues increased 12.3%. Gross profit grew 10%, expanding gross margin 230 basis points to 48.8%, driven by lower raw material costs, favorable mix, and currency effects against U.S. dollar-denominated inputs. Operating income increased 18.8% to MXN 4.6 billion with operating margin up 180 basis points to 14.4%, while adjusted EBITDA climbed 16.8% to MXN 6.2 billion and margin expanded 210 basis points to 19.6%. During Q&A, Collazo quantified headwinds in Mexico and Central America at roughly MXN 600 million at the operating income level, comprising about MXN 200 million in severance, MXN 200 million in IT expense, and MXN 200 million related to unfavorable currency translation. Cruz said marketing spending was intentionally brought forward to support the FIFA World Cup, and he expects full-year marketing spend to “taper down and remain in line with our usual marketing spend.” On IT, Cruz said the company maintains a strict investment threshold of 2.5% of sales and expects full-year IT spending to remain under that level, describing the first-quarter increase as a timing issue. Cruz said the company expects commodity and input costs to remain volatile but outlined hedging coverage levels, stating Coca-Cola FEMSA has hedged 60% of PET requirements, 93% of sugar, 98% of HFCS, and 72% of aluminum. Responding to questions on 2027 hedging, Cruz said the company follows a disciplined process and is watching market volatility tied to conflict in the Middle East before increasing hedge positions for 2027, while maintaining a base level of hedging in its rolling framework. On packaging and energy-related exposure, Cruz said around 60% of 2026 PET requirements are hedged at better levels than last year, which he characterized as a tailwind. He added that secondary packaging—such as shrink wrap—was an area of greater exposure but a smaller portion of cost of goods sold. Cruz said the company does not see significant impacts in its most likely scenario given current hedge positions and mitigation initiatives. On sustainability, Cruz said the company maintained “prime status” in its ISS ESG rating and improved its Morningstar Sustainalytics risk score. He also noted the publication of the 2025 Integrated Report, which for the first time aligned with IFRS S1 and S2 sustainability-related disclosures and included the company’s first TNFD-aligned disclosure. Cruz said Coca-Cola FEMSA became the first non-alcoholic beverage company in the Americas and the fourth globally to register as a TNFD adopter. Additional Q&A topics included Venezuela and capital allocation. Craig said Venezuela is “doing very well” operationally and accelerating, but said conditions for reconsolidating the operation are “still not there yet,” adding he does not expect reconsolidation “for this year or next year at least.” Cruz said the excise tax development in Mexico introduced uncertainty around cash flow generation, prompting the company to “take a step back” before deciding on capital allocation and capital structure actions. Coca‑Cola FEMSA (NYSE: KOF) is a large multinational beverage bottler and distributor operating primarily in Mexico and across multiple markets in Latin America. As a principal franchise bottler for The Coca‑Cola Company, the firm is responsible for producing, packaging, marketing and distributing Coca‑Cola branded beverages and a wide range of nonalcoholic drinks to retail and foodservice customers throughout its territories. The company's product portfolio includes carbonated soft drinks, bottled water, juices, ready‑to‑drink teas and coffees, sports and energy drinks, and other noncarbonated beverages. The article "Coca Cola Femsa Q1 Earnings Call Highlights" was originally published by MarketBeat.

This article first appeared on GuruFocus. Volume Growth: Increased 1.2% to 998 million unit cases. Total Revenue: Grew 1.1% to MXN70.9 billion; excluding currency headwinds, increased 6.0%. Gross Profit: Increased 4.5% to MXN33.3 billion; margin expanded by 150 basis points to 46.9%. Operating Income: Declined 2.3% to MXN9 billion; operating margin contracted by 50 basis points to 12.7%. Adjusted EBITDA: Increased 0.9% to MXN13.4 billion; margin remained at 18.9%. Majority Net Income: Declined 15.5% to MXN4.3 billion. Mexico Volume: Declined 2.6% year-on-year. Guatemala Volume: Grew 2.7% year-over-year. Brazil Volume: Increased 3.6% year-on-year. Colombia Volume: Increased 8.9% versus the previous year. Argentina Volume: Increased 5.4% year-on-year. South America Revenue: Increased 4.3% to MXN31.8 billion; on a currency-neutral basis, increased 12.3%. Comprehensive Financing Results: Recorded an expense of MXN1.8 billion, up from MXN1.1 billion in the previous year. Warning! GuruFocus has detected 3 Warning Sign with KOF. Is KOF fairly valued? Test your thesis with our free DCF calculator. Release Date: April 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Coca-Cola Femsa SAB de CV (NYSE:KOF) achieved a 1.2% increase in volume, reaching 998 million unit cases, driven by positive performance across most territories. The company reported a 1.1% growth in total revenue to MXN70.9 billion, with a 6.0% increase when excluding currency headwinds. Operations in Central and South America delivered solid performance, including record volumes in Guatemala, Colombia, and Brazil, highlighting the value of geographic diversification. Coca-Cola Femsa SAB de CV (NYSE:KOF) gained 0.6 percentage points in value share in carbonated soft drinks (CSDs) and 0.4 percentage points in non-alcoholic ready-to-drink (NARTD) beverages in Mexico. The company continues to leverage digital enablers and a comprehensive portfolio to strengthen its competitive position and support long-term growth. In Mexico, volumes declined by 2.6% year-on-year due to the excise tax increase and softer consumer dynamics. Operating income declined by 2.3% to MXN9 billion, with an operating margin contraction of 50 basis points to 12.7%, mainly due to severance expenses and increased IT costs. Majority net income fell by 15.5% to MXN4.3 billion, reflecting a higher comprehensive financial result. The company faced unfavorable mix effects and currency translation headwinds, impacting revenue growth. Adjusted EBITDA margin remained flat at 18.9%, with only a 0.9% increase in adjusted EBITDA to MXN13.4 billion. Q: Can you elaborate on the costs and expenses in Mexico that led to margin contraction, particularly regarding marketing, restructuring, and IT expenses? How should we think about these for the rest of the year? A: Javier Gerardo Astaburuaga Sanjines, Director, explained that marketing expenses were front-loaded due to the FIFA World Cup, and IT expenses were a timing issue, expected to remain under 2.5% of sales for the year. Severance expenses were necessary to rightsize the business due to the excise tax impact, totaling MXN100 million. Jorge Collazo, Investor Relations Officer, added that there was a MXN600 million headwind on operating income, with severance, IT expenses, and unfavorable currency translation each contributing around MXN200 million. Q: Could you provide more details on the volume performance in Mexico by subsegments, particularly why stills underperformed sparkling beverages? A: Ian Marcel Craig Garcia, CEO, noted that the underperformance in stills was due to a specific issue with a large chain adjusting parameters for Powerade, which should be resolved by May. Additionally, bulk water pricing was misaligned with the market. The first bimester faced a difficult comparison base due to the excise tax and economic conditions, but there was a relative improvement in March and April. Q: How is Coca-Cola Femsa performing in Brazil, and what are your expectations for the remainder of the year? A: Ian Marcel Craig Garcia, CEO, stated that Brazil continues to perform well, with all territories growing healthily. Share gains across categories are a significant contributor to volume growth. Javier Gerardo Astaburuaga Sanjines, Director, highlighted the positive impact of the Juntos Plus Advisor platform on execution and share gains, which is expected to benefit other markets as well. Q: Can you discuss the regional performance in Mexico, particularly the center versus the south, and how competition is evolving with the excise tax? A: Ian Marcel Craig Garcia, CEO, mentioned that the Southeast region is the most sluggish due to the wind-down of large infrastructure projects. In terms of competition, Coca-Cola Femsa is leveraging digital enablers and a segmented RGM strategy to maintain share gains, unlike the previous excise tax period when they lost share. Q: How should we think about the potential for Coke Zero to drive growth in Mexico, similar to its impact in Brazil? A: Ian Marcel Craig Garcia, CEO, noted that Coke Zero is performing well in Mexico, similar to its earlier stages in Brazil. While per capita consumption in Mexico is higher, there is still potential for growth, especially with the push on light flavors. The company is confident in its position and expects the Zero platform to outperform the market. For the complete transcript of the earnings call, please refer to the full earnings call transcript.