Post 3Q25 Update

Highly cautious expectations were met by mostly resilient results. In our 3Q25 Preview (link here) we had a cautious view on the Consumer sector, with lower expectations vs for other industries at 4% sales growth and 2% EBITDA growth. Nonetheless, 3Q25 Results were fairly resilient, and while top-line growth was lower than expected at 2% — FX, weather, and a soft consumer environment in both Mexico and the U.S. where among the main headwinds—, EBITDA grew 3%, benefitted by outliers such as Becle and La Comer, both posting double-digit EBITDA growth YoY. Therefore, margins were more resilient than expected, even if sales were not, a reversal of the previous trend (high-single-digit growth with margin contraction).

In the midst of the soft top-line performance, management remains cautious, expecting more cost and Capex efficiencies, and a tough consumer environment with consumers remaining more selective as in previous quarters. Still, most companies reiterated their FY25 guidance, with Bimbo an exception amid different FX conditions vs previously forecasted, and with Chedraui expecting downside risks at the top-line level.

Within Food & Bev, we continue to prefer AC, KOF, FEMSA and Becle (all Outperform). With no major PT changes, we continue to expect these players to outperform peers despite volume pressure and the excise taxes planned for next year. We highlight Becle given its solid margin performance, ahead of our previous upbeat estimates, even after accounting for non-recurring items.

In Consumer Discretionary, we continue to prefer Alsea (Outperform) vs Liverpool (Market Perform), with the latter underperforming our already cautious estimates.

Within HPC, we continue to prefer Genomma Lab (Outperform) vs Kimberly-Clark de Mexico (Market Perform). Both companies posted lackluster sales growth while margins remained resilient.

In Supermarkets, we prefer Chedraui as we downgrade Walmex to Market Perform. While we slightly raise our Walmex PT to P$66 (from P$63), we don’t forecast meaningful upside potential; we continue to expect the company to perform ahead of ANTAD in coming years, yet profitability and overall competition in the lower consumer end — Walmex’s focus— will be in our view heavily challenged. Profitability, meanwhile, is expected to face mixed conditions as the company manages higher labor expenses while new businesses contribute positively to gross margin, leaving minimal room for upside. We remain Outperform on Chedraui —forecasting solid margin performance ahead despite soft top line— and Market Perform on La Comer.