Fomento Económico Mexicano S.A.B. de C.V., better known by its abbreviation as FEMSA, is a powerful listed Mexican conglomerate, multinational and colossus in its own right. Presently, comprising three core divisions including bottling, retail and fintech, this Mexican juggernaut has doubled in size in terms of total reported consolidated sales within a span of slightly more than a decade since 2014 when I published an article about the company here in my website, the article is under the category of (Stocks to Follow). In fact, from roughly $ 20 billion in total consolidated sales a year back in 2014, the company now reaches $ 40 billion in total consolidated sales a year. The retail division alone by itself has grown exponentially since then through organic growth, territorial expansion and acquisitions. Accordingly, it is now responsible for 60% of the parent company’s net consolidated sales results of over $ 40 billion a year. The division includes the second biggest convenience store operation globally under the banner “OXXO”, the single largest pharmacy store operation in Latin America under four banners and one of the biggest fast-food restaurant operations in central Europe under 13 banners comprising bakeries, pastry shops, sandwich shops and coffee shops. Altogether, controlling the second largest listed coke bottler worldwide known as Coca-Cola FEMSA S.A.B. de C.V. and trading here as an ADR on the NYSE under the ticker symbol (KOF) while aggressively growing and expanding its retail division geographically, FEMSA has bright prospects ahead. Currently, the retail division is the shining star of the conglomerate while the fintech division is the newest of them all. The latter operates under the brand “Spin” and includes about a handful of digital product offerings, the main ones being a digital wallet for consumers and a payment processing platform for merchants with business-to-business or B2B capability.
Moreover, the retail division owned in full is known as FEMSA Comercio and has four subdivisions. The four subdivisions are OXXO, OXXO Gas, FEMSA Salud and Valora. The newest of them all is OXXO Gas. The subdivision consists of gas stations presently numbering close to 600 service stations in 17 Mexican states. Likewise, the namesake convenience store operation under the banner “OXXO” has close to 25 thousand convenience stores operating in several countries across the hemisphere including the US, Canada, Mexico, Colombia, Peru, Ecuador, Chile, Central America and Brazil while employing over 160 thousand workers of various nationalities in total. Overall, roughly half the stores are located in Mexico alone while the incursion in Brazil is the newest of them all and made through a joint venture with Raízen S.A., the Brazilian sugarcane processor giant and ethanol distiller. As of now, there are over 600 OXXO stores in Brazil. Altogether, FEMSA Comercio is the fastest growing division of FEMSA presently generating sales of over $ 24 billion a year after having surpassed the bottling affiliate known as Coca-Cola FEMSA with total sales of nearly $ 15 billion reported in its last fiscal year. Similarly, FEMSA Salud is the pharmacy store operation while Valora is the fast-food restaurant business in central Europe.
Showing promising prospects ahead, FEMSA Salud was built from the ground up through strategic acquisitions since the last 10 years. In fact, the last acquisition consisting of Corporación Grupo Fybeca S.A. in Ecuador back in 2019 added over a thousand pharmacies and market leadership in the country all at once. Presently, the operation boasts over 1,500 pharmacies in Ecuador under the banners “Fybeca” and “SanaSana”. In similar fashion, FEMSA leads the market in both Chile and Colombia after acquiring the Chilean privately-held concern known as Sofocar S.A. in two phases, one in 2015 and the other one in 2020, disbursing a flat $ 1 billion when combined. This operation today boasts close to a thousand pharmacies in Colombia under the banner “Farmacias Cruz Verde” and close to 700 pharmacies in Chile alone as well under the same banner. In Mexico, on the other hand, FEMSA trails two other pharmacy store chains but the operation now boasts over 1,500 pharmacies under the banner “Farmacias Yza”. In addition, both the acquisition of Corporación Grupo Fybeca and Sofocar added pharmaceutical laboratories and logistics comprising distribution channels to the portfolio of FEMSA Salud vertically integrating its operations in the four countries where it has a solid presence in Latin America, not to mention market leadership in all of them except for Mexico. Likewise, FEMSA Salud employs over 80 thousand associates including a good contingent of trained pharmacists on its payroll. By the same token, Valora was built from the ground up as well through strategic acquisitions in central Europe. From bakeries and pastry shops to sandwich shops and coffee shops, the operation boasts over 2,700 point of sale locations under 13 banners in five countries including the Netherlands, Luxembourg, Germany, Switzerland and Austria. All told, the fast-food restaurant operation in central Europe employs close to 20 thousand workers.
Furthermore, the finances of FEMSA are sound. Presently, the conglomerate generates just over $ 40 billion a year in total consolidated sales with profits hovering around $ 2 billion annually. These results translate into a price/earnings multiple of 17.5 and a total asset turnover ratio of roughly one after reporting total assets of $ 41.8 billion as of the second quarter in 2025. Overall, the company has $ 6.9 billion in cash on hand when including cash equivalents, PPE of $ 25.2 billion and total debt of $ 9.6 billion including $ 7.2 billion of long-term debt with corporate bond issues reaching maturities of at least 10 years. Accordingly, FEMSA has tripled its outstanding debt obligations, going from roughly $ 3 billion in 2014 to $ 9.6 billion today after embarking on an aggressive acquisition spree, most of it within its flourishing and expanding retail division known as FEMSA Comercio. Attaining a price/earnings multiple of 17.5 which is the same it had in 2014 but with the bulk of its operations being in the retail sector, this multiple is expected to improve in years to come once the cash flow from operations gains speed amortizing the total debt outstanding. Currently, the company trades at around $ 35 billion corresponding to its market value today and has an average consensus of a plain (BUY) among analysts who cover the stock, with recommendations ranging from (HOLD) at the lower end to (STRONG BUY)s at the higher end. Nevertheless, FEMSA has missed earnings estimates for the last three quarters. On the other hand, the company has a strong positive total equity position reaching $ 14 billion as we speak. All these figures were gathered from Yahoo!Finance. In addition, the company is a constituent member of the Mexican stock market index known as the IPC as well as the broader regional stock market index known as the S&P Latin America 40.
To conclude, although the stock is volatile after reaching a record high of over $ 150 billion in market value for the company as a whole last year, FEMSA is well positioned to add value to its stock market capitalization. For those interested, the stock trades here in the US as an ADR on the NYSE under the ticker symbol (FMX). Moreover, not only are the finances of the company sound and robust but there is plenty of harmony and efficiency in its management with a new CEO since 2014 replacing José Antonio Fernández Carbajal who remains Chairman of the board to this day. The latter is the son-in-law of Eva Gonda de Rivera, the widow of the late Don Eugenio Garza Lagüera and heiress to the eponymous Mexican fortune. Accordingly, she retains voting control of the conglomerate while holding a shareholding of roughly 20% in the company. Similarly, another important clan in Mexico retaining an economic interest of around 7% in the company are the Calderón Rojas brothers. However, the credit for these achievements including wise decisions with bold determination growing the company organically while efficiently expanding it and vertically integrating its operations belongs to Eduardo Padilla Silva, the current CEO of FEMSA. All told, FEMSA is a force in Mexico to be reckoned with and colossus in its own right in Latin America after holding tentacles in several countries there with plans to keep on expanding including operations in overseas Europe while making astute and safe use of leverage. In addition, the conglomerate is the biggest private employer in Latin America after having a total workforce reaching a staggering 390 thousand employees when including Coca-Cola FEMSA which is controlled by retaining voting majority in it but not owned in its entirety and its fast-food restaurant operation in central Europe.