FEMSA (FMX) Q3 2026 earnings review
FEMSA grows OXXO store traffic, but smaller divisions lose profit
FEMSA, the Mexican operator of OXXO convenience stores and Coca-Cola bottling plants, kept shoppers coming back after the summer soccer tournament while its smaller divisions lost profit. Sales from businesses owned a year ago rose 9%, and customer visits at OXXO Mexico climbed 4% — the best showing in over two years, chief executive Jose Antonio Fernández Garza-Lagüera said. Coca-Cola FEMSA lifted beverage volumes across every region, but bad-debt charges in Colombian pharmacies, losses in Brazil and Mexican fuel price caps dragged down the other retail units.
| Sales from businesses owned a year ago | +9.4% reported revenue: +9.8% to Ps. 235.6B |
|---|---|
| OXXO Mexico same-store sales | +9.2% customer traffic +3.5%, ticket +5.5% |
| Operating income from businesses owned a year ago | +13.4% reported operating income: +9.9% |
| Full-year outlook | None issued management warned of tougher Q4 comparisons |
⚖️ Verdict: 🟢 Bullish
The story got better because OXXO Mexico proved its customer recovery was not just a one-off soccer bump. Shoppers visited more often even after the tournament ended, and the Bara discount chain matched its record opening pace of 112 net new stores. Two cautions remain: price promotions and 140 store closures kept OXXO Mexico's profit growth below its sales growth, and the international, fuel, pharmacy and European divisions all posted steep operating profit drops.
The question now is whether OXXO Mexico can turn rising shopper visits into faster profit growth as comparisons get tougher in the fourth quarter. Either overhead savings and loyalty-program sales cover the cost of cheaper promotions and higher wages, or gross margin pressure keeps holding operating profit back. Fourth-quarter traffic and margins at OXXO Mexico, along with whether pharmacy bad-debt charges stop after the September contract exit in Colombia, will tell.
🐂 Bull Case
OXXO Mexico Traffic Grew After the World Cup
The biggest test for FEMSA, the Mexican convenience-store and bottling group, was whether shoppers would keep visiting OXXO Mexico once the summer soccer tournament ended. Chief executive Jose Antonio Fernández Garza-Lagüera said "customer traffic delivered its strongest performance in more than two years", aided by "commercial initiatives focused on key traffic-driving categories".
- Same-store sales (sales at stores open at least a year): up 9.2% from a year ago
- Customer traffic: up 3.5% from a year ago, faster than the 2.0% rise in the second quarter
- Average ticket (spend per visit): up 5.5%, lifted by beverage and cigarette taxes
- Spin Premia (OXXO's loyalty program): 52.1% of OXXO Mexico sales, up from 48.2% a year ago
- Spin by OXXO (its digital wallet): 11.7 million active users, up 0.2 million from last quarter by our math
This matters because the second quarter got more than half its boost from the tournament, so a drop back to shrinking traffic was the main risk. Instead, cheaper package sizes and better stock kept shoppers coming in against an easy year-ago comparison.
What to watch: fourth-quarter customer traffic at OXXO Mexico, when the year-ago comparison gets tougher and the tax boost on the average ticket nears its January anniversary. Positive traffic then would show the store changes hold up without an easy base.
Bara Discount Stores Kept Their Fast Opening Pace
Bara, the company's discount grocery chain in Mexico, aims to grow its store count by roughly a third this year to capture value-conscious shoppers. FEMSA does not include Bara inside its main store divisions, so the chain's rapid growth shows up only in separate notes.
The discount chain added 112 net new stores in the third quarter, matching the second quarter's record pace and bringing the total to 898 locations, up 56.7% from a year ago. Total revenue at Bara jumped 44.1%, and sales at stores open at least a year rose 10.3% on strong demand for groceries and home care.
What to watch: whether management begins reporting Bara's revenue in Mexican pesos and its operating profit in the fourth-quarter release. Without those figures, investors cannot see how much cash the fast store rollout requires or when the chain turns profitable.
Coca-Cola FEMSA Volumes Grew Across Every Region
Coca-Cola FEMSA, the group's beverage bottling arm, faced higher sugar taxes and a soft consumer in Mexico alongside currency swings in South America. Bottling chief executive Ian Craig said the business "achieved a record third-quarter consolidated volume, and continued to gain market share" across its territories.
Total beverage volume rose 5.3% from a year ago to 1,089.8 million unit cases, with Mexico and Central America up 4.8% and South America up 6.0%, led by a 15.9% jump in Colombia. Revenue rose 10.9%, and lower sugar and plastic bottle costs lifted gross margin by 1.4 percentage points to 46.5%.
Reported operating income rose 15.4%, but that included Ps. 1,055 million from insurance claims in Brazil; excluding that one-off, operating income grew 5.1% by our math because selling expenses rose 1.7 percentage points of revenue on higher freight, marketing and labor costs. In Mexico and Central America, those higher operating expenses pushed division operating income down 3.1%.
What to watch: fourth-quarter operating margin in the Mexico and Central America beverage division. A further drop would mean higher freight, labor and marketing costs are eating up the savings from cheaper sugar and plastic.
🐻 Bear Case
Colombian Health Exit Brought Another Receivable Charge
FEMSA Health operates pharmacies across four Latin American countries and has been winding down its contract to supply government-backed insurers in Colombia, which expired on September 30. Management has booked repeated charges for unpaid bills from those insurers over the past year.
In the third quarter, the division booked another Ps. 430 million provision tied to the "unwinding process of Colombia’s institutional business", after a Ps. 408 million charge in the second quarter. That charge, plus weaker margins in Chile, cut Health operating income by 63.2% from a year ago to Ps. 319 million, or just 1.4% of revenue; even without the provision, operating profit fell 13.8% by our math.
The company also moved distribution costs from selling expenses into cost of goods sold in Health and Europe, which cut Health's reported gross margin by 4.1 percentage points to 26.0% (down 0.8 percentage points on the old basis). Retail pharmacy sales in Colombia and lower operating losses in Mexico helped, but could not cover the bad-debt charge.
What to watch: fourth-quarter Health division provisions now that the Colombian insurer contract has ended. Another charge in the first quarter after the contract expiration would show that uncollected bills still sit on the balance sheet.
Brazil Losses and Fuel Caps Erased International Profit
FEMSA pitches its international convenience stores as its next growth engine, and revenue in Americas & Mobility — OXXO stores in South America and the US, plus gas stations — rose 18.1% from a year ago (10.9% excluding acquisitions and currency swings). However, bringing OXXO Brazil onto the books in February and fuel price caps in Mexico wiped out most of the division's profit.
- Americas & Mobility operating income: Ps. 170 million (0.6% of revenue), down 75.9% from Ps. 706 million a year ago
- Administrative and selling expenses: up 2.0 percentage points of revenue combined by our math, on Brazil integration and overhead
- Fuel unit margin: Ps. 2.28 per liter, down 9.6% from Ps. 2.52 a year ago
- OXXO Brazil stores: 641, up just 7 stores from last quarter by our math
- Europe operating income: down 24.8% to Ps. 531 million (down 17.5% excluding currency swings) on weak Germany and business-to-business sales
The profit drop matters because "maximum price commitments that continued to weigh on unit margins in our fuel business in Mexico" and Brazil's store losses are eating the gains from Colombia, Chile and Peru. In addition, reaching management's earlier 700-store year-end goal in Brazil and Colombia now requires 59 net new stores in Brazil and 52 in Colombia in the fourth quarter alone by our math, after adding just 7 and 26 this quarter.
What to watch: fourth-quarter store counts in Brazil and Colombia alongside Americas & Mobility operating margin. Falling short of 700 stores while margins stay near zero would mean the South American rollout is both slower and costlier than planned.
Lower Prices and Store Closures Trimmed OXXO Margins
To bring shoppers back into OXXO Mexico, the retailer has been trading gross margin — the profit left after paying for the goods it sells — for store traffic through cheaper package sizes and promotions. At the same time, the chain is weeding out weak stores and facing higher wages in Mexico.
OXXO Mexico's gross margin fell 1.2 percentage points from a year ago to 44.8%, or 0.7 percentage points after adjusting for an unusually high supplier payment base last year. The chain opened 191 stores but closed 140 "older, underperforming locations, as part of a portfolio optimization initiative", leaving just 51 net new stores and lifting other operating expenses.
Tight cost control cut selling expenses by 0.7 percentage points of revenue to 32.7% and administrative costs by 0.3 percentage points to 2.5% by our math, but store closure costs and wages still pushed operating margin down 0.4 percentage points to 9.3%. Revenue grew 10.3%, yet operating profit rose a slower 5.8%.
What to watch: OXXO Mexico's gross-to-operating margin gap in the fourth quarter, when last year's supplier payment spike is no longer in the comparison. If operating profit still trails revenue growth, wage inflation and price cuts are outrunning overhead savings.
👓 Other Themes
New US$280 Million Buyback Alongside Swiss Bond
On September 14, the company signed an accelerated share repurchase agreement in the United States to buy back up to US$280 million of its shares before year-end 2026. Nine days later, FEMSA issued 300 million Swiss francs of five-year bonds at a 1.73% yield, while cash outflows for dividends and buybacks lifted net debt (excluding Coca-Cola FEMSA) to 1.19 times annual cash profit from 0.91 times a year ago.
Mexican Consumer Softness and Brazil Volatility Persist
Fernández Garza-Lagüera warned that "the consumer environment in Mexico continues to be soft, Brazil has faced some volatility recently and that we will face a more demanding comparison base in the coming quarters". Below the operating line, a weaker Mexican peso during the quarter created a Ps. 1,121 million non-cash currency gain on US dollar assets, helping lift consolidated net income by 81.0% to Ps. 10,569 million.
💲 Other KPIs
Spending on stores, plants and equipment fell 28.3% from a year ago to 4.0% of revenue, down from 6.1% a year ago. For the first nine months, capital spending dropped 21.3% to Ps. 24,476 million (3.6% of revenue), as Coca-Cola FEMSA spent less and OXXO Mexico opened fewer stores.
Net debt outside the bottling arm — total debt and store leases of Ps. 165,605 million minus Ps. 70,403 million of cash — rose 5.8% from last quarter by our math. That pushed debt to 1.19 times annual cash profit (Adjusted EBITDA), up from 1.15 times last quarter and 0.91 times a year ago on dividend and buyback payouts.
Money owed by customers fell 9.9% from December 2025, even as third-quarter revenue grew 9.8% from a year ago. The drop reflects the write-down of unpaid bills from Colombian health insurers and tighter collection across the retail and bottling businesses.
❓ Key Questions
What are Bara's revenue and profit in pesos?
Bara now operates 898 stores after two straight quarters of 112 net openings, and revenue grew 44.1%. Without peso revenue or operating profit figures, investors cannot tell what the discount chain contributes or costs.
Are any Colombian insurer bills still unpaid?
The contract with Colombian insurer EPS Sanitas expired on September 30, and Health booked another Ps. 430 million bad-debt charge this quarter. Management has not disclosed how much unpaid institutional debt remains on the books.
Will Brazil and Colombia still reach 700 stores this year?
Management previously targeted 700 stores in each country by year-end 2026. Reaching that mark from 641 stores in Brazil and 648 in Colombia requires 59 and 52 net additions in the fourth quarter alone.
What is Spin's quarterly operating loss and tax drag?
Non-creditable tax losses at Spin kept the nine-month underlying tax rate at 34.8% against a 30% statutory rate, while net new active wallet users slowed to 0.2 million this quarter. Management does not disclose Spin's quarterly loss.