Fomento Economico Mexicano SAB de CV Q3 FY2024 earnings call

Proximity and Health Performance - Proximity Americas: Same-store sales flat due to weather, traffic contraction (5.7% drop) and tough comps, but average ticket grew 6.1%. - Proximity Europe: Revenue grew 20.4% in pesos, driven by retail and B2B foodservice, mitigated by traffic challenges. - Health Division: Revenue up 12.5% in pesos, with strong performance in Colombia's retail segment. - Store Expansion: OXXO added 367 net new stores in Q3, on track for annual objectives. - Strategic Initiatives: Focus on return on invested capital, suspending Pronto initiative in traditional trade, evolving OXXO's value proposition with projects like food service and financial services.

Proximity and Health delivered solid results in Q3 2024. Proximity Americas had flat same-store sales due to weather-related traffic contraction and tough comps, but average ticket grew 6.1%. Proximity Europe saw 20.4% revenue growth in pesos. Health division had 12.5% revenue increase in pesos with same-store sales growth of 7.4%. OXXO added 367 net new stores in Q3, with 273 in Mexico and 94 in South America. Coca-Cola FEMSA reported 10.7% top-line growth.

Guidance - Store expansion target for OXXO in 2025: Around 1,100 net new stores in Mexico, with 15%-20% growth in store base for OXXO Colombia. - Favorable comparison base in Q4 for OXXO, expecting improvement in consumer environment. - Preliminary target for Bara in 2025: Approximately 40% growth in store base, segregating Bara from OXXO Mexico for focused growth. - Valora expects improvement in B2C foodservice with German economic growth in 12-24 months.

Risks - Weather impact on Proximity Americas traffic and same-store sales. - Demanding comparison base for Proximity Americas in Q3. - Intense competition in Mexico for FEMSA Health division. - Complexities in the German market affecting Valora's B2C foodservice.

Q: Regarding OXXO same-store sales, prospects for Q4 and average ticket growth.

A: Fourth quarter has better comps, but weather still a factor; average ticket growth due to revenue management initiatives like pricing and segmentation.

Q: On digital cash burn and Pronto initiative.

A: Digital cash burn lower due to focus on scale and less customer acquisition; Pronto initiative suspended due to high cost to serve, but other initiatives to serve traditional trade continue.