Digital Initiatives to Keep FEMSA (FMX) Stock in Good Stride
Fomento Economico Mexicano S.A.B. de C.V. FMX, alias FEMSA, has been gaining pace in the digital space through its tech and innovation business unit — Digital@FEMSA. The unit is focused on building a value-added digital and financial ecosystem for end customers and businesses. It is also inclined toward enabling and leveraging the strategic assets of FEMSA’s core business verticals.
The company’s Coca-Cola FEMSA is leading the way with its omni-channel business, while the Proximity division is progressing with the adoption of digital initiatives for the OXXO stores. Within its OXXO store chains, the company is on track with investing in digital offerings, loyalty programs and fintech platforms to evolve stronger over the long term. Its OXXO digital wallet, OXXO Premia and the loyalty program have been performing well.
The company made progress on its digital efforts, with the continued addition of Spin Premia and Spin by OXXO customers at an accelerated Pace. Spin by OXXO received its definitive authorization to operate as a fintech in Mexico. Spin by OXXO reached 8.8 million users in third-quarter 2023, representing 105.8% year-over-year growth. Active users at Spin by OXXO currently represent 72.5% of the total acquired user base. Meanwhile, Spin Premia reached 36.6 million users in the third quarter, reflecting year-over-year growth of 66%. Active users at Spin Premia represented 48.3% of the total acquired user base.
Shares of this Zacks Rank #2 (Buy) company have rallied 63.3% in the past year compared with the industry’s growth of 1.5%. The FMX stock also compared favorably with the sector’s decline of 10.6% and against the S&P 500’s 16.1% rise.
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Other Factors Driving Growth
FEMSA is witnessing robust trends from growth across all business units, owing to effective growth strategies, robust market demand, and continued strength in OXXO Mexico and OXXO Gas. FMX’s solid growth prospects, driven by its strategy of creating a distribution platform in the United States, bode well.
FEMSA’s venture in the specialized distribution industry relates to its plan of investing in adjacent businesses, which can leverage capabilities across different markets, providing an opportunity for attractive growth and risk-adjusted returns.
With the presence of its OXXO business and other retail operations, the company has become an expert in the organization and management of supply chains and distribution systems. FEMSA serves several businesses and retail customers through millions of interactions in different industries.
FEMSA has been on track with its strategy of creating a national distribution platform in the United States through the expansion of its footprint in the specialized distribution industry. Through its Envoy Solutions subsidiary, the company has expanded in the specialized distribution industry with significant acquisitions completed in 2022, including OK Market in Chile; ATRA Janitorial Supply Co., Inc. in the United States; and Sigma Supply of North America Inc. based in Hot Springs, AR.
Prior to this, FEMSA acquired Next-Gen Supply Group Inc., Penn Jersey Paper Co., Daycon Products Co., Southeastern Paper Group, Inc., and Southwest Paper Company, Inc. to expand its presence in the specialized distribution industry. The company’s venture in the specialized distribution industry relates to its plan of investing in adjacent businesses, which can leverage capabilities across different markets, providing an opportunity for attractive growth and risk-adjusted returns.
Other Key Picks
We have highlighted three other top-ranked stocks from the Consumer Staple sector, namely Vita Coco Company COCO, Molson Coors TAP and The Duckhorn Portfolio NAPA.
Vita Coco, which develops, markets and distributes coconut water products in the United States, Canada, Europe, the Middle East and the Asia Pacific, currently sports a Zacks Rank #1 (Strong Buy). COCO shares have surged 103.4% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Vita Coco’s current financial year’s sales and earnings per share suggests growth of 13.5% and 243.5%, respectively, from the year-ago figures. COCO has a trailing four-quarter earnings surprise of 25.7%, on average.
Molson Coors is a global manufacturer and seller of beer and other beverage products. It currently flaunts a Zacks Rank #1. TAP shares have rallied 18.5% in the past year.
The Zacks Consensus Estimate for TAP’s current financial-year sales and earnings suggests growth of 9.1% and 28.8%, respectively, from the year-earlier reported figures. TAP has a trailing four-quarter earnings surprise of 41.3%, on average.
Duckhorn Portfolio, a premier producer of wines, principally in North America, has a trailing four-quarter earnings surprise of 13.7%, on average. It currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Duckhorn Portfolio’s current financial-year sales and earnings suggests growth of 7.7% and 3%, respectively, from the prior-year reported levels. Shares of NAPA have declined 46% in the past year.
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Vita Coco Company, Inc. (COCO) : Free Stock Analysis Report
Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report
Molson Coors Beverage Company (TAP) : Free Stock Analysis Report
The Duckhorn Portfolio, Inc. (NAPA) : Free Stock Analysis Report
