Fomento Económico Mexicano's Q2 2025: Unraveling Contradictions in Financial Strategy and Store Expansion

Financial Services Growth and Monetization, Store Expansion Strategy and Economic Conditions, Financial Services and Digital Transformation Strategy, Traffic Dynamics and Performance Initiatives, and Digital Initiatives and Gross Margin Impact are the key contradictions discussed in Fomento Económico Mexicano, S.A.B. de C.V.'s latest 2025Q2 earnings call.



Spin's Growth and Milestones:
- Spin by OXXO has created more than 14.5 million accounts, of which 9.4 million are active in the last 56 days.
- Spin Premia has over 58 million Spin accounts, with 26.6 million having transaction activity in the last 90 days.
- The growth is attributed to Spin's strategy of leveraging OXXO's physical capillarity and reputation as a trusted service provider, as well as its focus on convenience and customer needs.

Weather Impact on OXXO Mexico:
- OXXO Mexico's same-store sales declined modestly by 0.4% in Q2, with traffic contracting by 6.6% due to weak consumer environment and adverse weather conditions.
- The decline in average traffic was mainly attributed to weather factors, such as atypical cold in Mexico City and increased rainfall, which affected core convenience categories like soft drinks, beer, and tobacco.

Economic Challenges and Operating Results:
- FEMSA's total revenue growth was 6.3%, with Proximity Americas growing 6.9% on an organic and currency-neutral basis.
- Operating income increased by only 1.2% year-over-year, mainly due to the inability to absorb inflationary effects on costs and a challenging consumer environment in Mexico.
- This decline in profitability is attributed to the company's exposure to a more challenging economic environment and increased costs.

Digital Transformation and Strategic Partnerships:
- FEMSA's digital platforms like Spin and OXXO Pay are expanding their reach, operating across Mexico with strong penetration in nearly all municipalities.
- The company is actively pursuing partnerships to upgrade its financial services license and build capabilities in savings and credit products to enhance financial inclusion.
- The strategic focus is on leveraging OXXO's physical assets to create an omnichannel digital approach, driving financial inclusion and evolving OXXO's value proposition.