FEMSA's new lens: separating OXXO Mexico and doubling down on LatAm growth
A segmented reporting change reveals the company's strategic bet on the Americas while OXXO Mexico shows early traffic recovery.
FMX · Earnings Call · 2026-04-30
A new lens on an old engine
FEMSA's first-quarter report was less about the beat-and-raise and more about a deliberate reframing of how the company wants to be seen. The headline change is a disclosure overhaul:This is not just a box-ticking exercise. It gives investors a clean line of sight into the fast growing operations in Latin America and Brazil, while forcing the home market to stand on its own. The move also carries a strategic message: FEMSA is willing to let winners run and losers be scrutinized.we are now reporting OXXO Mexico on its own, given how important its performance and trajectory continue to be for our investors and analysts. At the same time, we are reporting a new segment, Americas & Mobility, which comprises our OXXO operations outside of Mexico as well as our fuel business...
OXXO Mexico: signs of life, but not celebration
The core business delivered 8.3% revenue growth and a 140bp gross margin expansion, driven by “continued cooperation with our suppliers, increases in distribution income and warehouse cost savings” — Jose Antonio Garza-Laguera, Chief Executive Officer (CEO) · 2026-04-30. Yet the CEO was careful not to overpromise: “average traffic remained slightly negative during the quarter, but improved significantly versus the declines we faced last year” — Jose Antonio Garza-Laguera, Chief Executive Officer (CEO) · 2026-04-30. That improvement is small but real, and it's the metric that matters for this stock. The company is also pruning its store base. Management explicitly said they expect to close "a few hundred" underperforming stores while still opening ~1,100 new units. This is a refreshingly honest acknowledgment that not every location deserves to exist, especially after the post-COVID boom. The FIFA World Cup is shaping up to be a near-term catalyst. When asked if the gross margin already includes World Cup-related commercial income, the CEO said: “We are not yet seeing – I don't think that is part of the incremental promotional income from this quarter, maybe a little bit in March, but no, I think we're going to see much more of that during the second quarter.” — Jose Antonio Garza-Laguera, Chief Executive Officer (CEO) · 2026-04-30 The company is also betting on a breakfast and daily replenishment agenda. “We are very ambitious in our convenience agenda.” — Jose Antonio Garza-Laguera, Chief Executive Officer (CEO) · 2026-04-30 That ambition is built on daily replenishment—winning back the consumer who stops for milk and diapers, not just a soda.Americas & Mobility: the growth engine gets a dashboard
The new segment highlights OXXO Brazil, Colombia, Chile, Peru, and the fuel business. Same-store sales in LatAm ex-Brazil grew over 20% in local currency. Brazil posted 6.9% growth after the Raízen joint venture unwind. The CEO framed these as long-term bets: “Given our capillarity, given that we sell the coldest tier out there, we should still gain share and continue to do so.” — Jose Antonio Garza-Laguera, Chief Executive Officer (CEO) · 2026-04-30 Meanwhile, the Health division remains the problem child, especially in Mexico and the institutional business in Colombia. The company is actively reducing exposure to EPS receivables, and the CEO didn't sugarcoat the situation: “The current environment in the Colombian health care system would result in the insolvency of certain EPS, thus creating a credit risk for us with regards to such receivables.” — Jose Antonio Garza-Laguera, Chief Executive Officer (CEO) · 2026-04-30 This ties back to the broader theme of portfolio simplification that has been a recurring pitch from management.Capital returns and the balance sheet
The CFO reiterated a clear capital allocation framework: ordinary and extraordinary dividends totaling ~MXN 41 billion, plus an ongoing buyback.Management also expects to end the year slightly below the 2x net-debt-to-EBITDA target, leaving optionality for M&A or more returns. This capital discipline is a contrast to the messy spin-offs and cross-holdings of the past. Interestingly, the CFO's comments on the Spin Premia platform—now with 11 million active users and crossing 50% tender share at OXXO—show that digital ecosystem is beginning to pay off, even if the losses are narrowing at a slower pace than investors would like. Overall, this quarter marks a clear shift: FEMSA is moving from a conglomerate that happens to own retail to a retail-first operating company with a transparent scorecard. The separation of OXXO Mexico is a signal—the company wants to be judged on its ability to grow traffic profitably at home while scaling the LatAm playbook. Early signs are encouraging, but the real test is whether the World Cup bump and the convenience agenda can convert into sustained same-store sales growth.Taken together, the combination of ordinary and extraordinary returns represents total expected capital distributions of approximately 41 billion pesos on a March 2026 to March 2027 basis.