FEMSA Announces First Quarter 2025 Results

Rhea-AI Summary

FEMSA (NYSE: FMX) reported its Q1 2025 financial results, showing mixed performance across divisions. Total Consolidated Revenues grew 11.1% with Income from Operations up 4.9% compared to Q1 2024.

Key divisional performance:

• Proximity Americas: Revenue growth of 6.8% but Income from Operations declined 11.8%, with same-store sales down 1.8%
• Coca-Cola FEMSA: Strong performance with 10.0% revenue growth and 7.4% increase in Operating Income
• Digital Services: Spin by OXXO reached 8.9M active users (+20.9% YoY), while Spin Premia grew to 25.2M active loyalty users (+15.9% YoY)
• Health Division: Showed robust growth with 21.0% revenue increase and 27.4% growth in Operating Income

Management anticipates recovery approaching mid-year, with stronger momentum expected in Q3 2025 and beyond, despite current macroeconomic uncertainties.

Positive

• Total Consolidated Revenues grew 11.1% YoY
• Coca-Cola FEMSA showed strong performance with 10.0% revenue growth
• Health Division achieved robust 21.0% revenue growth and 27.4% operating income increase
• Digital services showed significant user growth: Spin by OXXO +20.9%, Spin Premia +15.9%
• Gross profit margins improved across most divisions

Negative

• Proximity Americas experienced 11.8% decrease in Income from Operations
• Same-store sales declined 1.8% in Proximity Americas
• Proximity Europe saw 14.6% decrease in Income from Operations
• Fuel division reported 13.9% decline in Income from Operations
• Higher labor costs impacting operational expenses

Insights

Financial Analyst

FEMSA reports mixed Q1 results: revenue up 11.1%, but operating income declined in key OXXO Mexico segment amid challenging consumer environment.

FEMSA's Q1 2025 results reveal a tale of two narratives. While consolidated revenue grew 11.1% and operating income increased 4.9%, the underlying performance shows significant pressure in key segments. The comparable figures, which adjust for currency effects, show more modest growth of 5.6% in revenues and just 1.7% in operating income.

The concerning trend appears in the Proximity Americas division (including OXXO stores), where operating income dropped 11.8% despite 6.8% revenue growth. Same-store sales declined 1.8% in this segment, with management citing an adverse calendar, soft consumer environment in Mexico, and challenging comparison base. Similarly, Proximity Europe saw operating income fall 14.6% despite 18.0% revenue growth.

Bright spots include the Health division, delivering impressive operating income growth of 27.4% with 21.0% revenue growth and robust same-store sales of 15.4%. Coca-Cola FEMSA also performed well with 10.0% revenue growth and 7.4% operating income growth.

The digital financial services segment shows promise with Spin by OXXO growing active users 20.9% to 8.9 million, while Spin Premia increased active loyalty users 15.9% to 25.2 million.

Management has implemented revenue-driving and cost-cutting initiatives to address margin pressures, with expectations of performance improvement beginning mid-year and accelerating in Q3. However, the current margin compression in key retail operations signals potential structural challenges beyond temporary factors.

MONTERREY, Mexico, April 28, 2025 (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 2025.

• FEMSA: Total Consolidated Revenues grew 11.1% and Income from Operations increased 4.9% compared to 1Q24.
• FEMSA Retail¹: Proximity Americas total Revenues grew 6.8% and Income from operations decreased 11.8% versus 1Q24.
• SPIN: Spin by OXXO had 8.9 million active users² representing 20.9% growth compared to 1Q24 while Spin Premia had 25.2 million active loyalty users² representing 15.9% growth compared to 1Q24, and an average tender³ of 42.5% which increased from 35.1% tender in 1Q24.
• COCA-COLA FEMSA: Total Revenues and Income from Operations grew 10.0% and 7.4%, respectively against 1Q24.

Financial Summary for the First Quarter 2025 Change vs. comparable period
	Total Revenues	Gross Profit	Income from Operations	Same-Store Sales
As Reported	1Q25	1Q25	1Q25	1Q25
FEMSA Consolidated	11.1%	15.8%	4.9%
Proximity Americas	6.8%	10.0%	(11.8%)	(1.8%)
Proximity Europe	18.0%	14.8%	(14.6%)	N.A.
Health	21.0%	23.5%	27.4%	15.4%
Fuel	1.8%	4.4%	(13.9%)	6.1%
Coca-Cola FEMSA	10.0%	12.0%	7.4%
Comparable(A)
FEMSA Consolidated	5.6%	8.3%	1.7%
Proximity Americas	1.4%	7.2%	(11.0%)	(2.2%)
Proximity Europe	0.9%	(1.9%)	(27.7%)	N.A.
Health	7.0%	8.7%	11.7%	3.5%
Fuel	1.8%	4.4%	(13.9%)	6.1%
Coca-Cola FEMSA	5.9%	7.8%	3.2%

José Antonio Fernandez Carbajal, FEMSA’s Chief Executive Officer, commented:

“During the first quarter, we were able to navigate a challenging environment and calendar across several markets, particularly in Mexico, taking advantage of our resilient, geographically diversified business platform, and our outstanding team. For example, Coca-Cola FEMSA leveraged solid volume performance and currency tailwinds in most of its South American markets to offset softer trends in Mexico, keeping them in a position to deliver a solid set of results for the quarter. We also saw promising performances from several of our international health retail operations, enhanced by favorable FX tailwinds as certain South American currencies strengthened against the Mexican peso.

At Proximity Americas, we had a slower start to the year. In many ways we were able to anticipate this, given the combination of an adverse calendar, a continued soft consumer environment, and a demanding comparison base, particularly at OXXO Mexico where these trends manifested themselves in the form of a decline in same-store traffic, that in turn put some pressure on the top line. We were able to mitigate this pressure with another strong showing at the gross margin level, however, we are also facing higher expenses that largely reflect increased labor costs. Accordingly, we have put in place or accelerated a broad array of top-line and cost-cutting initiatives to drive revenues and commercial income, and to mitigate the higher operating and overhead expenses.

Fortunately, we have good visibility into certain elements of our Mexico business for the rest of the year, and our base case is projecting a recovery as we approach mid-year and gaining momentum during the third quarter and beyond. Global macroeconomic uncertainty is high right now, but given what we can estimate now, and the variables that are within our control, we anticipate 2025 will turn out to be another solid year for us, particularly when we consider that the second half of the year weighs more than the first half for many of our business units. We have been through slowdowns many times before, and our businesses have demonstrated time and time again their defensive and resilient nature, and their ability to adapt and emerge from these tough periods in good, if not better, shape.

We are constructive on the initiatives being implemented across businesses, and on the multiple levers we can utilize to drive incremental revenues, lower costs, and ultimately profitability. We remain cautiously optimistic and confident that we have a powerful and resilient business platform, a solid strategy, and the best possible team to carry out the task.”

To obtain the full text of this earnings release, please visit our Investor Relations website at https://femsa.gcs-web.com/ under the Financial Reports section

CONFERENCE CALL INFORMATION
Our First Quarter 2025 Conference Call will be held on: Monday, April 28, 2025, 10:00 AM Eastern Time (8:00 AM Mexico City Time). The conference call will be webcast live through streaming audio.
Telephone:	Toll Free US:	(866) 580 3963
	International:	+1 (786) 697 3501
Webcast:	https://edge.media-server.com/mmc/p/eovsj9jj/
Conference ID:	FEMSA
If you are unable to participate live, the conference call audio will be available on https://femsa.gcs-web.com/financial-reports/quarterly-results

ABOUT FEMSA
FEMSA is a company that creates economic and social value through companies and institutions and strives to be the best employer and neighbor to the communities in which it operates. It participates in the retail industry through a Proximity Americas Division operating OXXO, a small-format store chain, and other related retail formats, and Proximity Europe which includes Valora, our European retail unit which operates convenience and foodvenience formats. In the retail industry it also participates though a Health Division, which includes drugstores and related activities and Spin, which includes Spin by OXXO and Spin Premia, among other digital financial services initiatives. In the beverage industry, it 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 392,000 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.

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^(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 FEMSA Retail: Proximity Americas & Europe, Fuel and FEMSA Health.
² 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.
³ Tender: OXXO MXN sales with Spin Premia redemption or accrual / Total OXXO MXN Sales, during the period.

Investor Contact
(52) 818-328-6000
investor@femsa.com.mx
femsa.gcs-web.com

Media Contact
(52) 555-249-6843
comunicacion@femsa.com.mx
femsa.com

FAQ

What were FEMSA's (FMX) key financial metrics for Q1 2025?

FEMSA reported 11.1% growth in Total Consolidated Revenues and 4.9% increase in Income from Operations compared to Q1 2024.

How did FEMSA's Proximity Americas division perform in Q1 2025?

Proximity Americas saw 6.8% revenue growth but experienced an 11.8% decrease in Income from Operations and a 1.8% decline in same-store sales.

What was the performance of Coca-Cola FEMSA in Q1 2025?

Coca-Cola FEMSA achieved 10.0% growth in Total Revenues and 7.4% increase in Income from Operations compared to Q1 2024.

How many active users did Spin by OXXO and Spin Premia have in Q1 2025?

Spin by OXXO had 8.9 million active users (20.9% growth YoY) while Spin Premia reached 25.2 million active loyalty users (15.9% growth YoY).

What is FEMSA's (FMX) outlook for the remainder of 2025?

FEMSA expects recovery approaching mid-year with stronger momentum in Q3 2025, projecting 2025 to be another solid year despite current macroeconomic uncertainties.