Coca-Cola FEMSA (KOF) Q2 2025 earnings summary

Executive summary

• Second quarter saw a 5.5% decline in consolidated volume to 1.035 million unit cases, but total revenues grew 5% to MXN 72.9 billion, aided by revenue management and favorable currency translation; on a neutral currency basis, revenues increased 2.4%.

• Gross profit rose 3.4% to MXN 33 billion, but gross margin contracted 70 basis points to 45.3%.

• Operating income remained flat at MXN 9.7 billion, with margin down 60 basis points to 13.4%; EPS was Ps. 0.32 for the quarter.

• Adjusted EBITDA fell 3.8% to MXN 13.4 billion, with margin down 160 basis points to 18.4%.

• Majority net income decreased 5.3% to MXN 5.3 billion, mainly due to higher interest expenses and a lower FX gain.

Outlook and guidance

• Management remains cautiously optimistic for the second half, planning for a more conservative scenario in Mexico due to declining personal consumption and remittances.

• Expect sequential improvements in South America, especially as Porto Alegre plant resumes full operations.

• CapEx guidance remains at 8%-9% of net sales, with structural capacity investments continuing as planned.

• Management remains confident in long-term perspectives and will continue investing in capacity and capabilities.

• Adjustments to plans are expected in the second half to deliver long-term value amid a complex operating environment.

Segment performance

• Mexico and Central America: Volumes declined 8.4% to 636.9 million unit cases; revenues up 0.5% to MXN 45.3 billion; operating income down 6.3%.

• South America: Volumes down 0.5% to 398.4 million unit cases; revenues up 13.2% to MXN 27.6 billion; operating income up 19.6% to MXN 2.9 billion.

• Mexico: Volume declined 10% year-over-year, with share gains in modern trade but a gap in traditional trade at the MXN 20 price point.

• Brazil: Volumes down 1.5% year-over-year, but record share in non-alcoholic ready-to-drink segment; Coke Zero volumes up 56%.

• Argentina: Volumes up 11.9% year-over-year, with improving macro indicators and strong single-serve and flavors growth.