Business Context and Reporting Period
Company: Coca-Cola FEMSA, S.A.B. de C.V. (NYSE: KOF)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Fourth Quarter and Full Year ended December 31, 2025
Release Date: February 24, 2026
Coca-Cola FEMSA, the world's largest Coca-Cola franchise bottler by sales volume, reported results for 2025. The company operates across Mexico, Central America, and South America, serving over 276 million consumers through approximately 2.2 million points of sale.
Key Financial Metrics
Fourth Quarter 2025 (vs. 4Q 2024)
- Total Revenues: Ps. 77,750 million (As Reported: +2.9%; Currency Neutral: +6.0%)
- Gross Profit: Ps. 36,321 million (As Reported: +1.8%; Currency Neutral: +4.6%)
- Operating Income: Ps. 13,702 million (As Reported: +13.3%; Currency Neutral: +16.7%)
- Adjusted EBITDA: Ps. 18,169 million (+12.8%)
- Majority Net Income: Ps. 7,501 million (+3.0%)
- Earnings Per Share (EPS): Ps. 0.45
- Volume: 1,093.6 million unit cases (+1.3%)
Full Year 2025 (vs. FY 2024)
- Total Revenues: Ps. 291,746 million (As Reported: +4.3%; Currency Neutral: +6.5%)
- Gross Profit: Ps. 133,176 million (As Reported: +3.4%; Currency Neutral: +5.2%)
- Operating Income: Ps. 42,937 million (As Reported: +7.0%; Currency Neutral: +7.0%)
- Adjusted EBITDA: Ps. 59,110 million (+5.2%)
- Majority Net Income: Ps. 23,845 million (+0.5%)
- Earnings Per Share (EPS): Ps. 1.42
- Volume: 4,150.4 million unit cases (-1.8%)
Liquidity and Debt
- Net Debt (including hedges): Ps. 52,846 million (Increase of 37.9% vs. FY 2024)
- Net Debt / Adjusted EBITDA: 0.89x (vs. 0.68x in FY 2024)
- Capitalization Ratio: 35.4%
- Recent Financing: Issued Ps. 10,000 million in bonds in February 2026 (7,000 million fixed-rate, 3,000 million variable-rate).
Material Changes vs. Prior Period
Revenue and Volume Dynamics: While full-year volume declined 1.8% due to headwinds in Mexico, Panama, and Colombia, the fourth quarter showed a recovery with consolidated volume growth of 1.3%. South America drove significant growth with a 3.0% volume increase in 4Q25, while Mexico saw a slight 0.9% decline.
Profitability Drivers: Operating income growth in 4Q25 (13.3%) was significantly boosted by insurance claim recoveries in Brazil and Mexico totaling Ps. 1,149 million. Excluding these recoveries, normalized operating income would have declined 2.1%. Gross margins contracted 60 basis points in 4Q25 to 46.7% due to unfavorable mix and higher fixed costs, partially offset by lower sweetener and PET costs.
Financing Costs: Comprehensive financing expenses increased to Ps. 1,357 million in 4Q25 (from Ps. 980 million) and Ps. 4,945 million for the full year (from Ps. 3,906 million). This was driven by higher interest expenses from a U.S. dollar-denominated bond issued in Q2 2025 and lower interest income due to reduced cash positions and lower rates in Mexico.
Guidance, Outlook, and Risks
Management Commentary: CEO Ian Craig highlighted the resilience of the core business and the successful navigation of a complex operating environment. The company ended 2025 with the highest December volumes in its history for its four largest operations.
2026 Outlook: Management expects to address the impact of the increased IEPS tax in Mexico while accelerating growth in South America. Key initiatives include revenue-growth-management strategies, leveraging brand engagement from the FIFA World Cup, and rolling out digital capabilities.
Risks and Contingencies:
- Taxation: Increased IEPS tax in Mexico poses a challenge for 2026.
- Currency Volatility: Significant fluctuations in the Argentine peso and other operating currencies relative to the Mexican peso impact reported results.
- Inflation: High inflation in Argentina (31.55% LTM) continues to affect monetary positions and cost structures.
Investor Verification Checklist
- Insurance Recoveries: Verify the sustainability of operating income growth by excluding the Ps. 1,149 million (4Q) and Ps. 1,432 million (FY) insurance claim recoveries, which masked underlying margin contractions.
- Net Debt Trajectory: Monitor the 37.9% increase in net debt and the resulting leverage ratio of 0.89x, driven by new bond issuances and lower cash balances.
- IEPS Tax Impact: Assess the specific financial modeling for the increased IEPS tax in Mexico and its projected impact on 2026 margins.
- Argentina Exposure: Review the volatility of the Argentine peso and the company's hedging strategies given the 43.5% depreciation in 4Q25.
- Volume Recovery: Confirm if the 1.3% volume growth in 4Q25 represents a sustained trend reversal after a full-year decline of 1.8%.