Fomento Económico Mexicano, S.A.B. de C.V. (FMX) Income Statement

The dramatic swing from negative growth rates exceeding -90% in early 2025 to double-digit positive growth in 2026 indicates a major structural change, likely related to the divestment of the Heineken stake and the reclassification of discontinued operations. This volatility makes the recent acceleration less indicative of organic momentum and more reflective of a cleaner, more focused revenue base post-divestiture. Investors should assess whether the new growth trajectory is sustainable from this reset baseline.

The consistent gross margin suggests FMX retains some pricing power or a favorable product mix within its beverage and retail segments. However, the severe net margin compression, especially when compared to peers like Coca-Cola (27.3% net margin), points to significant operating expense burdens, high interest costs, or significant non-recurring charges. This disconnect between gross and net profitability is the central challenge for the company's earnings power.

The operating margin has fluctuated between 6.4% and 10.9% over the last ten quarters without a clear upward trend, even as revenue scales. This implies that SG&A and other overhead costs are rising proportionally with sales, preventing the company from translating top-line growth into meaningful bottom-line expansion. The lack of operating leverage is a key concern for long-term profitability improvement.

The absolute level of SG&A has grown alongside revenue, maintaining a high ratio that suggests limited expense discipline or the inherent costs of managing a complex, multi-national retail and bottling network. For a company in the consumer staples sector, this level of overhead is substantial and directly competes with the profitability of peers who operate with leaner cost structures. This cost burden is a structural headwind to achieving higher net margins.