Record 5.3% Growth Lifts Coca-Cola FEMSA Sales to 1.1 Billion Cases in Third Quarter
Key Facts
Coca-Cola FEMSA posted record third-quarter sales volume, with consolidated volume rising 5.3% year over year to a record 1.1 billion cases, according to the transcript of the company's earnings call published by Investing.com. The increase followed a 0.6% decline to 1,035 million cases in the third quarter of 2025, according to the company's results for the comparable period. Revenue rose 10.9% to 79.7 billion Mexican pesos, or 11.3% excluding currency effects. The company attributed revenue growth mainly to higher volumes and revenue management initiatives. Chief Executive Ian Craig said the record volume "demonstrated the effectiveness of our commercial strategies across our regions." The figures show strong overall growth, but regional performance and the components of profitability present a more mixed picture.
Gross profit rose 14.5% to 37 billion pesos, and its margin widened 140 basis points to 46.5%. Management said lower costs for sweeteners and PET materials, along with hedging, helped improve the margin. These gains were partly offset by higher aluminum costs and an unfavorable product mix. Marketing, freight, maintenance and labor expenses also increased, according to the chief financial officer's comments on the call. Gross profit therefore grew faster than reported revenue, while other cost items remained under pressure. These factors show that margin improvement did not result from a uniform trend in input costs.
Operating income rose 15.4% to 11.9 billion pesos, and the operating margin was 14.9%. But the result included 1.1 billion pesos in recoveries from insurance claims in Brazil, a benefit the company described as nonrecurring. Excluding the recoveries, operating income growth would have been 7.4%, according to the call transcript. Adjusted earnings before interest, taxes, depreciation and amortization rose 16.2% to 16.8 billion pesos, with a margin of 21.1%, up 100 basis points. Excluding the insurance recovery, growth in this measure was 10.6%. The comparison between reported rates and those excluding the recovery highlights its effect on the reading of operating earnings growth.
Regional performance was uneven: South America posted a 6.0% increase in volume, while revenue rose 14.7% to 33.7 billion pesos. Operating income surged 51.2% to 5.3 billion pesos, including insurance claim proceeds in Brazil. In Mexico, Craig said the revenue management strategy helped the company maintain its competitive position, despite consumer conditions remaining challenging throughout the quarter. Investing.com reported weakness in the company's largest division and said Coca-Cola FEMSA shares fell about 5% after the results, as investors focused on the division's weak performance. The "KO" ticker belongs to a different company than the bottler: it is the parent Coca-Cola company's stock, which closed at $92.71 on October 23. That closing price therefore does not represent Coca-Cola FEMSA stock.
At the net income level, net income attributable to shareholders rose 5.5% to 6.2 billion pesos. The company said higher operating income supported the result, but was partly offset by higher income taxes and net financing expenses. Net financing expense was 2 billion pesos, compared with an expense of 1.3 billion pesos in the same period of 2025. The chief financial officer attributed the increase mainly to higher interest expense and losses on financial instruments. These items explain why net income growth was lower than reported operating earnings growth. The company had moved its earnings call from October 27 to October 26, 2026, with results due before the market opened and the call scheduled to begin at 11:00 a.m. Eastern Time. Parent Coca-Cola is scheduled to report third-quarter results on October 27 before the New York Stock Exchange opens, with an investor call at 8:30 a.m. Eastern Time.