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

Strong Q2 momentum at OXXO Mexico (but World Cup boosted comps) - OXXO Mexico delivered revenues +11.8% YoY driven by same-store sales +9.5% (traffic +2% for the first positive in 8 quarters, ticket +7.4%). - Company estimate: ~60% of the uplift was attributable to the World Cup (split between Panini collectibles and consumption tied to 4 Mexico games in June); on a normalized basis traffic ~+1% and ticket +6.2%.

Strategic shift: “customer-centric” retail algorithm (price/gross margin/assortment) - Management says prior focus on margin expansion sometimes reduced competitiveness; now refocusing on customers to drive sustained traffic while keeping operating margin stable. - Four pillars highlighted: 1) Impulse: sharper price-pack architecture, promotions, and assortment with lower-cost alternatives 2) Prepared food & coffee: better food products + simplifying pricing; coffee execution improved; targeted coffee pilots in select regions with early encouraging results 3) Daily & replenishment: grow grocery relevance via supplier partnership and possible private label 4) Beyond trade/services: digitization via OXXO + Spin

FEMSA consolidated financials: profit up strongly; tailwinds fading in H2 - Consolidated revenues +9.3% YoY; operating income +7.2% YoY with operating leverage (OXXO Mexico + international). - Net income +64.9% to MXN 9.2bn, mainly from operating income growth and lower net financing expenses (non-cash FX loss MXN 655m vs MXN 4.1bn prior year), plus better associate results. - CFO flagged external pressures ahead: World Cup over and consumer environment still sluggish, especially Mexico, so Q3-Q4 are expected to face tougher comps and weaker tailwinds.