Finvest
FMX Consumer Staples Retail · Mexico · Convenience stores · Beverages · Thesis updated July 17, 2026

OXXO is stronger, Health still hurts

01 Running thesis

The store engine is healing

The bull case starts with OXXO Mexico. FEMSA now reports it on its own because it is the company’s core engine. In Q1 2026, OXXO Mexico expanded gross margin by 140 basis points, helped by commercial income, which is money suppliers pay for better shelf space and promotions. Traffic was still slightly negative, but it improved a lot from the deeper declines of 2025.

FEMSA is also cleaner than it used to be. The FEMSA Forward plan has sold many non-core assets, including Heineken shares, plastics, logistics, and equipment businesses. That leaves management focused on retail, Coca-Cola FEMSA, and Spin.

The growth map is wider now. FEMSA bought 249 Delek convenience stores in the United States, mostly in Texas. In Brazil, FEMSA took full control of the OXXO stores after separating Grupo Nós, keeping 607 OXXO stores as of December 31, 2025. Bara, the Mexican hard-discount format, is also gaining traction, with private label near 30% of revenue mix in Q1 2026.

The bear case is not small. Health is still dragging results, with store closures in Mexico, credit risk in Colombia, and Chile margin pressure from GLP-1 medicines. Spin is scaling, with 11 million active users and more than 50% tender in Q1 2026, but it is now tied tightly to OXXO rather than chasing a full neobank model right away. That makes Spin more practical, but also less open-ended.

Apr 2026→Q1 2026 improved the OXXO story, with 140 basis points of gross margin expansion and better traffic trends. The same update kept Health in focus, as FEMSA chose not to renew the EPS Sanitas contract in Colombia.
Apr 2026▲The 2025 Form 20-F confirmed a simpler FEMSA after major divestments. It also confirmed the 249-store Delek U.S. footprint and 607 Brazil OXXO stores retained after the Grupo Nós separation.
Feb 2026▼Spin became more focused but less open-ended, as management shifted to an OXXO-centered model and postponed a full banking license. Health remained pressured by uncollectible accounts in Colombia.
Oct 2025▲OXXO Mexico traffic improved to a 3.1% decline from a 6.6% decline in the first half. Management also delayed Spin’s banking license application to refine the credit model.
Jul 2025→Q2 2025 showed another 6.6% traffic decline at OXXO Mexico, hurt by weather and product presentation gaps. U.S. integration moved forward, with 40 stores converted in West Texas.
Apr 2025▼Q1 2025 kept pressure on the thesis because Proximity Americas traffic contracted 6.6%. Health Mexico also began a major turnaround, with plans to close more than 400 underperforming stores.
Apr 2025▲The 2024 Form 20-F confirmed the Delek acquisition, the Conekta cash business acquisition, and the rebrand of Digital@FEMSA to Spin. It also showed weaker OXXO Mexico traffic in the second half of 2024.
Feb 2025→Q4 2024 showed OXXO Mexico traffic down 2.8%, but loyalty adoption improved and the first OXXO opened in Texas. The stock story gained a U.S. growth angle, while Mexico demand stayed soft.
02 Business model

Tiny purchases, huge scale

FEMSA makes money by being close to the customer. OXXO sells snacks, drinks, prepared food, cigarettes, basic goods, and services in small stores that are easy to reach. The model depends on frequent visits, good locations, and fast checkout.

OXXO also earns from suppliers. Brands pay for promotion and preferred placement, and that commercial income can lift margins even when shoppers are careful with money. This helped OXXO Mexico during a soft consumer period.

Spin adds digital payments, loyalty, data, and possible lending to the store network. Management has shifted Spin to an Ecosystem 2.0 model, meaning one client, one strategy, and one profit and loss statement with OXXO Mexico. That lowers the risk of building a stand-alone bank too fast, but it also means Spin’s value is mostly tied to OXXO use.

The model breaks if traffic keeps falling, wages rise faster than sales, or Health keeps absorbing cash and management time. The U.S. and Brazil expansions can help, but only if FEMSA proves it can earn good returns outside its Mexican home base.

03 Product portfolio

What FEMSA owns

Cash cow

OXXO Mexico

The main profit engine. It depends on store traffic, supplier income, services, and tight cost control.

Growth engine

Americas and Mobility

This includes OXXO outside Mexico and OXXO Gas. It now includes the U.S. Delek footprint and the fully controlled Brazil OXXO stores.

Growth engine

Bara

Bara is FEMSA’s hard-discount format in Mexico. It is scaling with private label near 30% of revenue mix in Q1 2026.

Steady

Proximity Europe

Valora gives FEMSA a European foodvenience and business-to-business platform. It adds geographic balance, but it is not the core Mexico story.

Option

Health Division

The pharmacy and health retail business operates in Mexico, Colombia, Chile, and Ecuador. It has scale, but Mexico closures and Colombia credit risk make it the problem child.

Option

Spin

Spin covers payments, loyalty, and digital services tied to OXXO. It reached 11 million active users and crossed 50% tender in Q1 2026, but the full banking license plan is postponed.

Cash cow

Coca-Cola FEMSA

FEMSA owns a major stake in this bottler. It remains a highly profitable anchor, with Mexico and Brazil accounting for 74.9% of Coca-Cola FEMSA revenue in 2025.

04 Business segments

Where revenue comes from

Proximity Americas Division39%modest
Coca-Cola FEMSA35%modest
Health Division10%flat
Fuel Division8%modest
Proximity Europe Division7%modest
Others and consolidation adjustments1%modest

The mix uses 2025 reportable segment revenue from FEMSA’s Form 20-F. Proximity Americas and Coca-Cola FEMSA together make up most of revenue, so OXXO trends and beverage demand matter most.

05 Risk factors

What could go wrong

OXXO traffic does not turn positive

High impact · Medium odds

OXXO Mexico traffic was still slightly negative in Q1 2026, even though the trend improved. If customer visits stay weak, margin gains from supplier income and services may not be enough. A convenience store needs frequent visits to cover rent, labor, and utilities.

We watchOXXO Mexico average traffic and same-store sales in each quarter.

Labor rules squeeze store margins

High impact · Medium odds

Mexico has raised minimum wages for several years, and a shorter statutory workweek remains a possible pressure point. OXXO has many stores and many employees, so labor changes hit the cost base fast. Price increases can help, but too much price pressure could hurt traffic.

We watchMexico minimum wage decisions, workweek legislation, and OXXO operating margin.

Health keeps consuming cash

Medium impact · High odds

Health is the weakest division. Mexico is closing underperforming stores, Colombia has institutional credit risk, and Chile faces margin pressure as GLP-1 products change the sales mix. If the turnaround takes longer, FEMSA’s clean retail story becomes less clean.

We watchHealth operating income, Mexico store count, and provisions for uncollectible accounts in Colombia.

EPS Sanitas wind-down goes poorly

Medium impact · Medium odds

Management said it will not renew the EPS Sanitas contract in Colombia when it expires in September. That should lower credit risk over time, but the exit still has execution risk. Payment delays, disputes, or lost volume could hurt results during the transition.

We watchUpdates on the EPS Sanitas contract exit and any new bad-debt provisions.

U.S. returns disappoint

Medium impact · Medium odds

The Delek deal added 249 convenience stores in the United States. This is a new market for FEMSA’s OXXO playbook, with different customers, labor rules, suppliers, and fuel dynamics. If integration costs are high or returns are low, the U.S. growth option loses value.

We watchU.S. store conversions, integration cost comments, and management’s return on invested capital targets.