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Current Position:Home » News » Agri & Animal Products » Dairy Products » Topic

Femsa Slumps In Mexico City As Taxes Weigh On Convenience Stores

Zoom in font  Zoom out font Published: 2014-07-28  Origin: esmmagazine  Views: 30
Core Tip: Fomento Economico Mexicano SAB, owner of Latin America’s biggest convenience-store chain, fell the most in a year as company executives said taxes on sodas and junk food hurt store traffic.
Fomento Ecomilknomico Mexicano SAB, owner of Latin America’s biggest convenience-store chain, fell the most in a year as company executives said taxes on sodas and junk food hurt store traffic.

Shares of Femsa dropped 3.8 percent to 124.69 pesos at 1:52 p.m. in Mexico City, its biggest slide on a closing basis since April 2013.

The company was the worst performer after tortilla purveyor Gruma SAB on the benchmark IPC equity index, which decreased 0.1 percent.

Femsa executives said on a conference call today that second-quarter results trailed their expectations although they expected a gradual pickup in consumer spending.

The Monterrey-based company posted adjusted net income of 3 billion pesos ($232 million), missing the 4.4 billion peso average forecast of analysts surveyed by Bloomberg.

It registered a 0.7 percent drop in traffic at its retail chains including Oxxo.

The results “were not as solid as expected at Oxxo,” JPMorgan Chase & Co. analyst Andrea Teixeira wrote in a research report to clients.

On Jan 1, Mexico imposed a 1 peso per liter tax on soft drinks and an 8 percent levy on junk food while raising sales taxes in areas bordering the US to 16 percent from 11 percent.

 
 
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