Coca-Cola FEMSA (KOF) reported strong third-quarter results for 2026, with total revenue reaching MXN 79.7 billion, a 10.9% increase driven by record volumes and revenue growth management initiatives. The company's consolidated volume hit 1.1 billion unit cases, a 5.3% increase, marking a record third quarter. Gross profit stood at MXN 37 billion, yielding a gross margin of 46.5%, up 140 basis points due to lower sweetener and PET costs.
Operating income was MXN 11.9 billion, including a MXN 1.1 billion nonrecurring benefit from recovered insurance claims in Brazil. Adjusted EBITDA increased by 16.2% to MXN 16.8 billion, with a margin of 21.1%. Mexico saw a 4.2% volume growth, supported by a 70-basis-point value share gain in sparkling beverages. South America revenue grew by 14.7%, driven by volume growth and favorable currency translation effects from Colombia.
CEO Ian Marcel Craig Garca highlighted the success of Topo Chico sparkling orange juice and sparkling lemonade, noting that their acceptance was 180% above expectations, leading to supply shortages. The company is also rolling out digital tools for its sales force and planning a new production plant in Southeast Mexico to optimize supply chain costs. CFO Gerardo Cruz Celaya mentioned plans to announce a new mechanism for capital return to shareholders in early 2027.
Despite the positive results, the company faces challenges such as capacity constraints in Colombia and Venezuela, currency volatility impacting accounts payable, and upcoming labor reforms in Brazil. CEO Craig warned that the working week change in Brazil will have an industry-wide impact that needs to be passed through via revenue growth management.