Femsa Net Profit Decline

In the fourth quarter, Mexican retail and beverages giant Fomento Económico Mexicano (Femsa) faced challenges that impacted its bottom line. Despite a moderate increase in sales, the company's net profit saw a significant decline due to exchange and noncash losses.

Profit Performance

• Net Profit: In the period of October-December, Femsa reported a net profit of 6.34 billion Mexican pesos ($370 million), marking a 21% decrease from the same quarter in 2022.
• Noncash Losses: A strong Mexican peso resulted in a noncash exchange loss on the company's dollar-denominated cash position. Additionally, an accounting loss related to discontinued operations further contributed to the decline in profit.
• Earnings per Share: The majority of net profit for the quarter was MXN0.91 per share and $0.64 per American depositary share.

Sales and Earnings

• Sales: Fourth-quarter sales recorded a 4.6% increase from the previous year, reaching MXN189.83 billion.
• Adjusted EBITDA: The company's adjusted earnings before interest, taxes, depreciation, and amortization rose by 3.6% to MXN26.93 billion.

Segment Performance

• Oxxo: Sales at Oxxo convenience stores saw a notable 14% growth, with same-store sales up by 8.5%.
• Drugstores and Gas stations: Drugstore sales increased by 2.6% while gas-station sales were up by 9% year-on-year.
• Coca-Cola Femsa: The beverages unit reported an 8.1% rise in sales and a 10% higher adjusted EBITDA for the quarter.

Overall, Femsa faced a tough comparison basis for revenue in certain units, with higher labor costs in Mexico adding pressure to expenses. Despite these challenges, the company remains a key player in the Mexican retail and beverages industry.