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FEMSA (FMX) to Report Q1 Earnings: What's in the Offing?

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·5 min read
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Fomento Economico Mexicano, S.A.B. de C.V. FMX or FEMSA is slated to report first-quarter 2022 earnings on May 2. The company is likely to register top and bottom-line growth when it reports quarterly results.

The Zacks Consensus Estimate for its first-quarter earnings of 94 cents per share suggests 27% growth from the year-ago quarter’s reported figure.

The consensus mark for quarterly revenues is pegged at $6.64 billion, indicating growth of 8.5% from that reported in the year-ago quarter.

In the last reported quarter, the company delivered a negative earnings surprise of 19.47%. However, it has a trailing four-quarter earnings surprise of 33.6%, on average.

Fomento Economico Mexicano S.A.B. de C.V. Price and EPS Surprise

Fomento Economico Mexicano S.A.B. de C.V. Price and EPS Surprise
Fomento Economico Mexicano S.A.B. de C.V. Price and EPS Surprise

Fomento Economico Mexicano S.A.B. de C.V. price-eps-surprise | Fomento Economico Mexicano S.A.B. de C.V. Quote

Factors at Play

FEMSA has been witnessing sales momentum, owing to gains across all business units, along with a favorable comparison with the year-ago quarter.

On its last reported quarter’s earnings call, management noted that trends across its business units and markets have been improving as the health situation continues to recover.

Gains from market recovery are likely to have aided the company’s first-quarter sales. FEMSA’s digital initiatives and business expansion endeavors are also expected to have contributed to the performance in the first quarter.

The company’s digital initiatives and business expansion endeavors have been on track. Its focus on offering customers more options to make contactless purchases by intensifying digital and technology-driven initiatives across operations has been aiding the digital performance.

The company’s Coca-Cola FEMSA has been leading the way with its omni-channel business, while FEMSA Comercio has been progressing with the adoption of digital initiatives. Within its OXXO store chains, the company is anticipated to have witnessed gains from investments in digital offerings, loyalty programs and fintech platforms.

FEMSA is also expected to have benefitted from growth via its acquisition strategy. It has been on track to expand in the U.S. specialized distribution industry through the acquisitions of two businesses. The acquisitions are expected to have contributed to the top line in the to-be-reported quarter.

However, the company has been witnessing soft gross margin trends, which are expected to have continued in the first quarter. FEMSA’s performance is also expected to have been partly hurt by the impacts of supply-chain disruptions and higher raw material costs.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for FEMSA this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

FEMSA has a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Corteva CTVA currently has an Earnings ESP of +0.70% and a Zacks Rank #3. The company is expected to register top and bottom-line growth when it reports the first-quarter 2022 numbers. The Zacks Consensus Estimate for CTVA’s quarterly revenues is pegged at $4.52 billion, which suggests growth of 8.1% from the prior-year quarter’s reported figure.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Corteva’s quarterly earnings has been unchanged in the past 30 days at 81 cents per share, suggesting 2.5% growth from the year-ago reported number. CTVA has delivered an earnings beat of 21.9%, on average, in the trailing four quarters.

US Foods USFD currently has an Earnings ESP of +19.32% and a Zacks Rank #3. USFD is likely to register top and bottom-line growth when it reports the first-quarter 2022 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $7.8 billion, which suggests growth of 23.9% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for US Foods’ quarterly earnings has moved up 38.1% in the past seven days to 29 cents per share, suggesting growth of 141.7% from the year-ago quarter’s reported number. USFD has delivered an earnings beat of 33.6%, on average, in the trailing four quarters.

Hormel Foods HRL currently has an Earnings ESP of +1.29% and a Zacks Rank #3. HRL is anticipated to register top and bottom-line growth when it reports the second-quarter fiscal 2022 results. The Zacks Consensus Estimate for Hormel Foods’ quarterly revenues is pegged at $3 billion, indicating an improvement of 15.1% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Hormel Foods’ bottom line has moved down by a penny in the past 30 days to 46 cents per share. However, the consensus estimate suggests growth of 9.5% from the prior-year quarter. HRL has delivered an earnings beat of 1.7%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report

Hormel Foods Corporation (HRL) : Free Stock Analysis Report

US Foods Holding Corp. (USFD) : Free Stock Analysis Report

Corteva, Inc. (CTVA) : Free Stock Analysis Report

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