Grupo Herdez (HERDEZ) Q2 2025 earnings summary

Executive summary

• Net sales grew 4.4% year-over-year in Q2 2025 to MXN 9.7 billion, and 7% in the first half to MXN 19.4 billion, led by Preserves and Exports, despite a challenging consumer environment and inventory reductions by major clients.

• Market share increased in two-thirds of the portfolio, with strong promotional strategies driving gains in mayonnaise, spices, and vegetables.

• Export segment expanded 12% in Q2 and nearly 10% year-to-date, supported by new distribution partnerships and product launches.

• Gross profit increased 2.4% to MXN 3.85 billion, with consolidated gross margin at 39.6%, down 0.8 pp due to higher raw material costs.

• Operating income declined 1.1% to MXN 1.27 billion, with margin at 13.1%, mainly from Impulse segment weakness.

Financial highlights

• Preserves segment sales rose 4.7% in Q2 and 7.5% year-to-date, reaching MXN 7.4 billion and MXN 15.1 billion, respectively.

• Inbound/Impulse segment sales declined 0.6% in Q2 due to weather impacts but grew 1.7% year-to-date to MXN 2.8 billion.

• Consolidated gross margin for Q2 was 39.6%, down 0.8 pp, mainly from higher raw material costs; year-to-date gross margin improved 0.3 pp to 40.2%.

• Q2 operating income was MXN 1.27 billion (down 1.1%), with a 13.1% margin; EBITDA was MXN 1.58 billion (16.2% margin).

• Net income increased 23.6% in Q2 to MXN 269 million and 11.9% to MXN 880 million, driven by lower financing costs and higher MegaMex contributions.

Outlook and guidance

• Sales expected to grow in line with previous guidance; preserves to grow high single digits, inbound/impulse lowered due to Q2 but still expected to grow low double digits.

• Export sales to decline due to softness in key categories and exchange rate effects.

• EBIT projected to grow in the low to high single digits; EBITDA for inbound/impulse expected to increase over 40%.

• MegaMex income expected to grow in the low 40% range; net consolidated income to grow mid-double digits, majority net income north of 30%.

• CAPEX to be around MXN 1,600 million, in the middle of the guided range.