Fomento Economico Mexicano S.A.B. de C.V. - ADR

Strong Financial Performance: FEMSA reported a total revenue growth of 12.8% for Q4 2024, with operating income increasing by 31.5% year-over-year (YOY). Net consolidated income surged by 78.3% to nearly MXN 11 billion, mainly due to favorable currency effects from the depreciation of the Mexican peso and gains from discontinued operations.

Robust Capital Return Strategy: For 2025, FEMSA plans to distribute nearly MXN 66 billion ($3.2 billion) to shareholders, including ordinary dividends of MXN 14.8 billion and extraordinary dividends and share buybacks of MXN 51.2 billion. This represents a yield of 10.4% based on current market capitalization, aiming to optimize leverage towards a target of 2 times net debt-to-EBITDA.

OXXO Store Expansion and Traffic Challenges: Despite adding 1,100+ stores in 2024, same-store sales growth in the Proximity Americas division slowed to 3.8% with average traffic contracting by 2.8%. Management acknowledged external factors like weather and a softer consumer environment while assuring that cannibalization from new store openings is being closely monitored and is manageable.