Coca Cola Femsa (NYSE:KOF) Releases Quarterly Earnings Results

Key Points

• Coca‑Cola FEMSA reported Q1 EPS of $1.18, missing the consensus of $1.34, and majority net income fell 15.5% to MXN 4.3bn, as higher comprehensive financial expenses pressured results despite a 150 bps gross‑margin expansion and steady adjusted EBITDA margin.
• Regionally, Mexico was the main near‑term headwind (volumes −2.6% and an ~MXN 600m operating‑income hit from severance, IT/SAP and FX effects), while South America offset weakness with volumes +4.8% and meaningful margin improvement.
• The company raised its quarterly dividend to $1.0873 (annualized ~$4.35, ~4.4% yield; ex‑dividend Apr 20) amid a sell‑off in the stock and mixed analyst moves that left a consensus target near $113.60.

Coca Cola Femsa (NYSE:KOF - Get Free Report) released its quarterly earnings results on Wednesday. The company reported $1.18 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.34 by ($0.16), Zacks reports. Coca Cola Femsa had a net margin of 8.18% and a return on equity of 15.72%.

Here are the key takeaways from Coca Cola Femsa's conference call:

• Consolidated Q1 results were mixed — volumes rose 1.2% to 998 million unit cases and total revenues were MXN 70.9bn (+6.0% ex-currency), gross margin expanded 150 bps to 46.9% and adjusted EBITDA margin was steady at 18.9%, but majority net income fell 15.5% to MXN 4.3bn largely due to a higher comprehensive financial result.
• Mexico remains the key near-term headwind — volumes declined 2.6% after the excise tax and weak consumption, and management reported an approximately MXN 600m operating-income hit (≈MXN 200m each from severance, elevated IT/SAP costs and currency translation), plus a larger-than-expected shift toward multi-serve mixes.
• South America was a strong offset to Mexico, with volumes up 4.8% (notably Colombia +8.9%, Brazil +3.6%), currency‑neutral revenue growth and meaningful margin expansion (gross margin +230 bps; adjusted EBITDA +16.8%), showing durable operating leverage in that region.
• Digital initiatives (Juntos+, Juntos+ Advisor, Juntos+ Premia) are driving execution and share gains — high visitation (~94%), improved combined coverage and AI-driven suggested orders have been credited with measurable improvements in traditional and modern trade.
• Management emphasizes protection against input volatility (hedges: PET ~60%, sugar ~93%, HFCS ~98%, aluminum ~72%), but financial costs rose (comprehensive financial expense MXN 1.8bn vs MXN 1.1bn prior) due to new debt, lower interest income and FX/instrument losses, which pressured earnings this quarter.

Coca Cola Femsa Stock Performance

Coca Cola Femsa stock traded down $2.24 during midday trading on Wednesday, reaching $98.85. 231,307 shares of the company's stock were exchanged, compared to its average volume of 197,709. Coca Cola Femsa has a 52 week low of $80.22 and a 52 week high of $116.36. The company has a debt-to-equity ratio of 0.47, a quick ratio of 0.91 and a current ratio of 1.12. The firm has a market cap of $166.13 billion, a price-to-earnings ratio of 16.59, a P/E/G ratio of 1.08 and a beta of 0.54. The stock's 50-day simple moving average is $102.27 and its 200 day simple moving average is $97.32.

Coca Cola Femsa Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Friday, May 1st. Investors of record on Monday, April 20th will be given a $1.0873 dividend. This is an increase from Coca Cola Femsa's previous quarterly dividend of $1.00. This represents a $4.35 dividend on an annualized basis and a dividend yield of 4.4%. The ex-dividend date of this dividend is Monday, April 20th. Coca Cola Femsa's dividend payout ratio (DPR) is presently 66.44%.

Analysts Set New Price Targets

KOF has been the topic of several recent research reports. The Goldman Sachs Group lifted their price target on Coca Cola Femsa from $97.00 to $111.00 and gave the company a "buy" rating in a research note on Wednesday, February 11th. JPMorgan Chase & Co. lifted their target price on Coca Cola Femsa from $100.00 to $110.00 and gave the company a "neutral" rating in a research report on Thursday, April 16th. Bank of America reaffirmed a "buy" rating on shares of Coca Cola Femsa in a research report on Monday, March 2nd. Barclays lifted their target price on Coca Cola Femsa from $110.00 to $112.00 and gave the company an "equal weight" rating in a research report on Tuesday, March 3rd. Finally, UBS Group downgraded Coca Cola Femsa from a "buy" rating to a "hold" rating in a research report on Thursday, March 12th. Five analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $113.60.

Hedge Funds Weigh In On Coca Cola Femsa

Hedge funds and other institutional investors have recently bought and sold shares of the business. Caitong International Asset Management Co. Ltd grew its holdings in Coca Cola Femsa by 482.5% during the third quarter. Caitong International Asset Management Co. Ltd now owns 332 shares of the company's stock worth $28,000 after purchasing an additional 275 shares during the period. Smartleaf Asset Management LLC grew its holdings in Coca Cola Femsa by 79.3% during the fourth quarter. Smartleaf Asset Management LLC now owns 346 shares of the company's stock worth $33,000 after purchasing an additional 153 shares during the period. Global Retirement Partners LLC grew its holdings in Coca Cola Femsa by 138.9% during the fourth quarter. Global Retirement Partners LLC now owns 516 shares of the company's stock worth $49,000 after purchasing an additional 300 shares during the period. Triumph Capital Management bought a new position in Coca Cola Femsa during the third quarter worth about $49,000. Finally, Parallel Advisors LLC grew its holdings in Coca Cola Femsa by 19.1% during the fourth quarter. Parallel Advisors LLC now owns 616 shares of the company's stock worth $58,000 after purchasing an additional 99 shares during the period.

Coca Cola Femsa Company Profile

Coca‑Cola FEMSA NYSE: KOF is a large multinational beverage bottler and distributor operating primarily in Mexico and across multiple markets in Latin America. As a principal franchise bottler for The Coca‑Cola Company, the firm is responsible for producing, packaging, marketing and distributing Coca‑Cola branded beverages and a wide range of nonalcoholic drinks to retail and foodservice customers throughout its territories.

The company's product portfolio includes carbonated soft drinks, bottled water, juices, ready‑to‑drink teas and coffees, sports and energy drinks, and other noncarbonated beverages.

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