Fomento Económico Mexicano, S.A.B. de C.V. (FMX) Balance Sheet

The sequential increase in assets from $44.1B in 2025Q4 to $45.9B in 2026Q2, as per the balance sheet, appears driven by higher PPE and goodwill, consistent with the Valora acquisition and continued OXXO expansion. However, equity contracted from $13.6B to $12.4B over the same period, reflecting the Heineken divestiture proceeds being redeployed into core assets rather than retained. This trajectory suggests a deliberate shift toward a more asset-intensive retail and digital infrastructure, which may pressure returns in the near term but could support long-term growth.

The D/E ratio increased from 0.78 to 0.84 sequentially, per reported data, as debt grew slightly while equity declined, reflecting the funding of acquisitions and capital expenditures. Despite the uptick, leverage remains moderate compared to peers like PEP (D/E 2.43) and KO (1.33), suggesting ample headroom. The stable cash balance of $6.0B provides a buffer, but the trend warrants monitoring as the company integrates Valora and scales Spin, which may require additional debt or cash deployment.

The growth in PPE, which now represents over 36% of total assets, underscores the capital-intensive nature of FMX's convenience store and bottling operations. Goodwill increased from $2.3B to $2.6B over the past year, per reported figures, reflecting the Valora acquisition, which introduces integration risk. The asset mix suggests a shift toward tangible assets, which may limit asset-light valuation multiples but reinforces the moat through physical density. Investors should monitor whether these investments generate adequate returns, especially given the thin net margin.

The decline in retained earnings, despite positive net income, suggests that dividends and other distributions exceeded earnings, likely due to the special dividend from the Heineken divestiture. Equity per share has weakened, with ROE at only 5.9% in 2026Q2, per the latest report, indicating that the expanded asset base is not yet generating proportional returns. This may be a temporary effect of the strategic pivot, but it highlights the need for operational improvement to restore equity growth.

The sequential drop in the current ratio, from 1.35 to 1.14, indicates that current liabilities are growing faster than current assets, likely due to increased payables and short-term debt from expansion. Cash of $6.0B provides a cushion, but the ratio is now below the peer average (e.g., KO at 1.46, CCEP at 0.80), signaling reduced liquidity flexibility. This trend warrants monitoring, as a further decline could constrain working capital management, especially given the negative working capital changes noted in the cash flow analysis.