Yahoo Finance Why FEMSA (FMX) Looks Poised for an Earnings Beat in Q4
Fomento Economico Mexicano, S.A.B. de C.V. FMX or FEMSA is slated to report fourth-quarter 2022 earnings on Feb 24. The company is likely to have witnessed top and bottom-line growth in the quarter under review.
The Zacks Consensus Estimate for FMX’s fourth-quarter earnings of $1.35 per share suggests 48.4% growth from the year-ago quarter’s reported figure. The consensus estimate for earnings has moved up 7.1% in the past seven days. The consensus mark for quarterly revenues is pegged at $9.07 billion, indicating growth of 24.1% from the year-ago quarter's reported figure.
For 2022 earnings, the consensus mark for earnings is pegged at $3.92, suggesting a decline of 0.3% from the year-ago quarter’s reported figure. The consensus mark has moved up 2.9% in the past seven days. The Zacks Consensus Estimate for the company’s 2022 revenues is pegged at $32.9 billion, suggesting 20.1% growth from the prior-year quarter’s reported figure.
We expect the company’s fourth-quarter total revenues to increase 20.6% year over year to $8,812.7 million and the bottom line to increase 33.4% to $1.23 per share. For 2022, we estimate a revenue improvement of 20% to $32,865.7 million and earnings per share growth of 2.8% to $4.00.
In the last reported quarter, the company delivered a negative earnings surprise of 17.6%. It has a trailing four-quarter negative earnings surprise of 15.01%, 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-eps-surprise | Fomento Economico Mexicano S.A.B. de C.V. Quote
Factors at Play
FEMSA has been gaining from effective growth strategies and robust demand across most markets. Sales momentum, owing to gains across all business units, also bodes well.
The company’s investments in digital and technology-driven initiatives are expected to have contributed to its fourth-quarter performance. 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 omnichannel business, whereas FEMSA Comercio has been progressing with the adoption of digital initiatives. Investments in digital offerings, loyalty programs and fintech platforms bode well. Its OXXO digital wallet, OXXO Premia and loyalty program have also been performing well. Such endeavors are likely to have aided revenues in the to-be-reported quarter.
FEMSA has been on track with its strategy of creating a national distribution platform in the United States through the expansion of its footprint in the specialized distribution industry. The company’s venture in the specialized distribution industry relates to its plan of investing in adjacent businesses, which can leverage capabilities across different markets, providing an opportunity for attractive growth and risk-adjusted returns. Gains from these investments are likely to have boosted the company’s fourth-quarter performance.
However, the company has been witnessing gross margin pressures, which are expected to have continued in the fourth quarter. FEMSA’s performance is also expected to have been partly hurt by the impacts of supply-chain disruptions and higher raw material costs. Inflation in steel and aluminum prices is expected to have been concerning.
What the Zacks Model Unveils
Our proven model conclusively predicts 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
FEMSA has an Earnings ESP of +13.61% and a Zacks Rank #2.
Other Stocks Poised to Beat Earnings Estimates
Here are some other companies that you may want to consider, as our model shows that these also have the right combination of elements to deliver an earnings beat.
Inter Parfums IPAR has an Earnings ESP of +13.33% and currently carries a Zacks Rank of 2. The company is likely to register top and bottom-line growth when it reports fourth-quarter 2022 results. The consensus mark for IPAR’s quarterly revenues is pegged at $311.5 million, which suggests 47.8% growth from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Inter Parfums’ quarterly earnings has moved up by a penny in the past 30 days to 30 cents per share. The consensus estimate for IPAR’s fourth-quarter earnings suggests growth of 850% from the year-ago quarter’s reported figure. IPAR delivered an earnings beat of 27.8%, on average, in the trailing four quarters.
The J. M. Smucker Co. SJM currently has an Earnings ESP of +1.94% and a Zacks Rank #3. SJM is likely to register top-line growth when it reports its third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.2 billion, which suggests growth of 7.8% from the figure reported in the prior-year quarter.
However, the Zacks Consensus Estimate for J. M. Smucker's quarterly earnings has moved down 0.9% in the past 30 days to $2.14 per share, suggesting a decline of 8.2% from the year-ago quarter’s reported number. SJM delivered an earnings beat of 18.5%, on average, in the trailing four quarters.
Vital Farms VITL currently has an Earnings ESP of +80.00% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports the fourth-quarter 2022 numbers. The Zacks Consensus Estimate for VITL’s quarterly revenues is pegged at $102.5 million, which suggests growth of 32.3% from the prior-year quarter’s reported figure.
The Zacks Consensus Estimate for Vital Farms’ quarterly earnings has moved up 150% in the past 30 days to 5 cents per share. The consensus estimate for VITL suggests 155.6% growth from a loss of 9 cents reported in the year-ago quarter. VITL delivered an earnings beat of 58.3%, on average, in the trailing four quarters.
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Fomento Economico Mexicano S.A.B. de C.V. (FMX) : Free Stock Analysis Report
The J. M. Smucker Company (SJM) : Free Stock Analysis Report
Inter Parfums, Inc. (IPAR) : Free Stock Analysis Report
Vital Farms, Inc. (VITL) : Free Stock Analysis Report