Fomento Economico Mexicano (NYSE:FMX) Issues Quarterly Earnings Results

Fomento Economico Mexicano (NYSE:FMX) posted its quarterly earnings data on Tuesday. The company reported $0.93 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.06 by $0.87, FiscalAI reports. The firm had revenue of $13.20 billion during the quarter, compared to analysts’ expectations of $12.94 billion. Fomento Economico Mexicano had a return on equity of 8.81% and a net margin of 3.60%.

Here are the key takeaways from Fomento Economico Mexicano’s conference call:

• OXXO Mexico showed improving underlying momentum, with same-store sales up 9.5% and traffic growth turning positive at 2% after eight quarters of declines. Management attributed the gains partly to the World Cup but said strategic changes around pricing, assortment, coffee, food, and customer focus are also beginning to deliver market-share gains.
• FEMSA reported consolidated revenue growth of 9.3%, operating-income growth of 7.2%, and net-income growth of 64.9% in the quarter. Cost controls, restructuring, lower foreign-exchange losses, and strong performance at Coca-Cola FEMSA in Brazil and Colombia supported results, while net debt-to-EBITDA improved to 1.15 times.
• Bara and international OXXO operations remain major growth opportunities. Bara added a record 112 net stores while maintaining double-digit same-store sales growth, and management said Colombia’s improved economics support faster expansion; both Colombia and Brazil are expected to reach approximately 700 stores by year-end.
• Spin by OXXO’s monthly active users rose 22% year over year, and FEMSA is partnering with QED Investors to cautiously develop consumer lending using a low-and-grow approach. Management emphasized that credit remains early-stage and high-risk, with any eventual funding expected to become increasingly non-recourse to FEMSA.
• Management expects World Cup tailwinds to fade and comparisons to become more difficult in the second half, while Mexico’s consumer environment remains sluggish. OXXO Mexico’s gross margin fell 70 basis points as FEMSA prioritized affordability, and the health division was pressured by Mexico weakness, Chilean competition, and a MXN 408 million provision tied to Colombian healthcare credit risk.

Fomento Economico Mexicano Trading Up 1.5%

NYSE:FMX traded up $1.85 during mid-day trading on Thursday, reaching $122.91. 31,311 shares of the company’s stock traded hands, compared to its average volume of 467,525. The company has a 50 day moving average price of $126.12 and a 200-day moving average price of $116.74. The firm has a market capitalization of $42.47 billion, a price-to-earnings ratio of 24.61, a PEG ratio of 0.69 and a beta of 0.41. The company has a debt-to-equity ratio of 0.47, a current ratio of 1.16 and a quick ratio of 0.87. Fomento Economico Mexicano has a 12-month low of $83.08 and a 12-month high of $141.47.

Fomento Economico Mexicano Increases Dividend

The firm also recently declared a quarterly dividend, which was paid on Monday, July 27th. Investors of record on Wednesday, July 15th were issued a dividend of $1.827 per share. The ex-dividend date was Wednesday, July 15th. This represents a $7.31 dividend on an annualized basis and a yield of 5.9%. This is a boost from Fomento Economico Mexicano’s previous quarterly dividend of $0.67. Fomento Economico Mexicano’s dividend payout ratio (DPR) is presently 54.36%.

Institutional Investors Weigh In On Fomento Economico Mexicano

A number of large investors have recently made changes to their positions in FMX. Compound Planning Inc. lifted its stake in Fomento Economico Mexicano by 13.3% in the fourth quarter. Compound Planning Inc. now owns 4,311 shares of the company’s stock worth $436,000 after acquiring an additional 506 shares during the period. Invesco Ltd. increased its position in Fomento Economico Mexicano by 18.9% during the 4th quarter. Invesco Ltd. now owns 1,244,820 shares of the company’s stock valued at $125,814,000 after purchasing an additional 197,914 shares during the period. Corient Private Wealth LLC raised its holdings in Fomento Economico Mexicano by 6.6% in the 4th quarter. Corient Private Wealth LLC now owns 4,891 shares of the company’s stock worth $493,000 after purchasing an additional 301 shares in the last quarter. Empowered Funds LLC bought a new position in Fomento Economico Mexicano in the 4th quarter worth $2,205,000. Finally, Millennium Management LLC lifted its position in shares of Fomento Economico Mexicano by 31.0% in the 4th quarter. Millennium Management LLC now owns 175,618 shares of the company’s stock worth $17,750,000 after purchasing an additional 41,593 shares during the period. 61.00% of the stock is currently owned by institutional investors.

Analyst Ratings Changes

A number of equities research analysts have recently weighed in on FMX shares. Zacks Research upgraded shares of Fomento Economico Mexicano from a “hold” rating to a “strong-buy” rating in a report on Thursday, April 30th. UBS Group increased their target price on shares of Fomento Economico Mexicano from $122.00 to $139.00 and gave the company a “buy” rating in a report on Thursday, May 28th. Wall Street Zen downgraded shares of Fomento Economico Mexicano from a “buy” rating to a “hold” rating in a research note on Saturday, July 18th. Barclays upped their price target on shares of Fomento Economico Mexicano from $125.00 to $130.00 and gave the company an “equal weight” rating in a research report on Tuesday, July 14th. Finally, Weiss Ratings upgraded Fomento Economico Mexicano from a “hold (c-)” rating to a “hold (c)” rating in a report on Monday, May 11th. One research analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating and three have given a Hold rating to the stock. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and an average target price of $119.50.

About Fomento Economico Mexicano

Fomento Económico Mexicano, SAB. de C.V. (FEMSA) is a Mexican multinational company active primarily in the retail and beverage sectors. Headquartered in Monterrey, Mexico, FEMSA’s operations span convenience store retailing, beverage bottling and distribution, and related logistics and consumer services. The company’s business model combines high-frequency retail outlets with large-scale beverage production and a regional supply chain network.

FEMSA Comercio, the company’s retail arm, operates a large chain of convenience stores under the OXXO brand and has expanded its retail footprint with complementary formats and services.