Episode
Coca-Cola FEMSA (KOF) Q2 2026: Mexico Stalled, South America Surged — Buy or Already Fully Priced?
- Published
- Jul 27, 2026
- Duration seconds
- 859
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Summary
Coca-Cola FEMSA, S.A.B. de C.V. (KOF) Q2 2026 — Coca-Cola FEMSA (KOF), the world's largest Coca-Cola franchise bottler by volume, reported Q2 2026 (quarter ended June 30, 2026) before the open on July 27. All operating figures are in Mexican pesos (Ps.). Revenue rose 4.7% YoY to Ps. 76,318M (+6.6% currency-neutral) on volume +3.5% to a record 1,071.8M unit cases. Gross margin expanded 180 bps to 47.1% (gross profit Ps. 35,938M, +8.8%); operating income rose 9.1% to Ps. 10,654M at a 14.0% margin (+60 bps); adjusted EBITDA jumped 12.1% to Ps. 15,008M; and majority net income surged 16.9% to Ps. 6,211M (EPS Ps. 0.37, per ADS Ps. 29.57), aided by a lower 30.2% tax rate. The story underneath is a divergence: Mexico & Central America (the biggest division, ~Ps. 45.5B revenue, +0.3%) saw operating income FALL ~7% under a sugary-drink excise-tax increase and a soft consumer, while South America (Ps. 30,868M revenue, +11.8%) delivered operating income +46.5% (comparable +49.4%) and EBITDA +35.6% on record Q2 volumes in Colombia (+17.7%), Brazil and Guatemala. The balance sheet is a fortress: net debt fell 14.8% YoY to Ps. 45,030M, net-debt/EBITDA just 0.74x (from 0.89x), interest coverage ~9x. KOF pays a growing ordinary dividend (~2% yield). At ~$108/ADR the stock popped ~5% on the print and sits ~7% below its 52-week high near $116, market cap ~$22.6B. Our owner-earnings DCF (base ~$1.3B/yr FCF, ~$6.20/ADR; steady-staple +5% vs SA-led-compounder +8% paths, 9-11% discount) lands fair value near $110 — essentially at the price. Our call: HOLD, 3/5 — a world-class bottler firing on South America, but the ADR has caught up to its own story; own it for steady compounding + the dividend, add on weakness toward the mid-$90s. Wall Street rates KOF a Strong Buy, yet its own averag…