MARKETS
The S&P / BMV IPC rose 1.1% over the week, following its US counterparts, after the announcement of talks with China and of an incipient trade agreement between the US and the UK rekindled hopes that global trade tensions could ease. Meanwhile, the Mexican peso recovered 0.4% to MXN$19.54/USD, and the yield of the 10-year M-Bono remained practically unchanged at 9.36%.
The S&P / BMV IPC’s top gainers for the week were: LACOMER UBC (+12.7%), CUERVO * (+10.2%) and GENTERA * (+9.5%). On the other hand, the main losers were: LAB B (-8.1%), GFNORTE O (-3.8%) and FEMSA UBD (-3.3%).
Next week, Banco de Mexico will hold its monetary policy meeting with economists expecting a 50-bps interest rate reduction.
LISTED COMPANIES
Tiendas 3B reported excellent 1Q25 results with an aggressive store expansion and accelerating SSS, partly offset by declining margins. Total revenue surged 35.1% YoY, surpassing the 32.7% rate observed in 4Q24, driven by the opening of 507 new stores in the last year of which 117 were in the current quarter, bringing the total to 2,889 locations. SSS rose an impressive 13.5% in 1Q25, also accelerating relative to 4Q24 (+13.4%). Gross profit rose 33.0% YoY, slightly lagging the strong revenue growth, leading to a gross margin contraction, to 16.0% from 16.3% a year ago, reflecting increased cost pressures. EBITDA was up 12.7% YoY, with the EBITDA margin declining 82 bps to 4.1%, amid rising administrative expenses, which jumped by 58.2% due to non-cash expenses related to share grants and options, wage inflation and increased headcount, as well as higher expenses related to investment in growth, and reporting and compliance as a public company. The net loss narrowed to MXN$87 million, from MXN$231 million in 1Q24, aided by lower financial costs and FX gains.
Femsa plans to convert nearly all 249 DK stores in the U.S. into Oxxo stores, following strong sales gains in initial conversions.
Alsea announced changes to its Board of Directors and executive leadership following its Annual Ordinary Shareholders’ Meeting held on April 30th. Armando Torrado Martínez was appointed Chairman of the Board, succeeding Alberto Torrado Martínez; Armando will step down as CEO in July, when Christian Gurría will assume such role as part of a long-term succession plan. Shareholders also approved the departure of Leon Kraig as Independent Director after a 10-year tenure.
Asur’s total passenger traffic rose 3.8% YoY to 6.0 million in April 2025, driven by increases of 13.5% in Puerto Rico, 4.8% in Colombia, and 0.5% in Mexico. Puerto Rico benefited from a 29.6% jump in international traffic and an 11.6% rise in domestic volumes. Colombia posted strong international growth of 15.6%, while Mexico’s performance reflected a 3.3% decline in international passengers partially offset by a 5.1% increase in domestic traffic.
OMA’s total passenger traffic increased 18.8% YoY to 2.49 million in April 2025, with domestic traffic up 17.5% and international traffic rising 27.2%.
GAP’s total passenger traffic rose 9.1% YoY to 5.53 million in April 2025. Domestic traffic increased 12.3%, while international traffic advanced 5.2%. Available seats rose 11.0%, though the load factor declined to 80.4%, from 81.8% a year earlier.
Volaris’ total passenger traffic increased 14.3% YoY to 2.62 million in April 2025. Domestic traffic rose 14.6%, while international traffic grew 15.4%. Available Seat Miles (ASMs) expanded 16.9%, but the load factor declined 3.1 PP to 81.6%.
Coca-Cola FEMSA announced the successful closing of its US$500 million senior notes due 2035, following pricing on May 1st, 2025. The company plans to allocate the proceeds to general corporate purposes, including working capital, capital expenditures, and debt repayment.
Autlán announced the successful completion of the Preliminary Economic Assessment for its Columbia Unit, which was conducted by SRK Consulting, confirming the deposit’s resources and the project’s viability. The company continues to process low-grade material to benefit from high gold prices while preparing for large-scale operations. Autlán is evaluating funding options to support development and diversify revenues from its precious metals division.
OTHER COMPANIES
Mercado Libre reported strong 1Q25 results, ahead of expectations with the stock up 6.5% after the report. Consolidated net revenues and financial income soared 37% YoY (+64% YoY FX neutral) to US$5.9 billion, outpacing the Bloomberg consensus of US$5.53 billion. Income from operations grew 45% YoY, with margins improving to 12.9% due to Argentina’s rising profitability levels which offset cost pressures in Mexico and Brazil. Net income rose 44% to US$494 million, translating into EPS of US$9.74, surpassing the consensus forecast of US$8.27. In Commerce, net revenue climbed 32%, with GMV up 17% in USD terms and 40% FX-neutral. This growth was heavily skewed by Argentina’s GMV explosion of 77% (FX-neutral +126%) due to the economic rebound, in addition to a 30% FX neutral increase in Brazil and a 23% FX-neutral rise in Mexico. Unique buyers surged 25% to nearly 67 million, the highest since early 2021. Fintech services via Mercado Pago posted a 43% increase in net revenues, with total payment volume rising 43% to US$58.3 billion. Monthly active users grew 31% to 64 million. The credit portfolio expanded 75% to US$7.8 billion, with credit card receivables growing 111% to US$3.2 billion. However, the 15–90 day NPL ratio ticked up to 8.2%, from 7.4% in 4Q24, though down from 9.3% a year ago. The higher NPL ratio suggests rising credit risk, especially with the rapid expansion of the credit portfolio. The NIMAL spread compressed to 22.7%, from 31.5%, reflecting negative seasonality and strategic shift towards credit cards.
Nu Mexico, Klar and Ualá published their 1Q25 results. As with February financials, there were no major surprises, with portfolio data matching earlier disclosures by Condusef, and steady overall trends. For Nu Mexico, most notable was its continued growth in deposits, up an impressive 6% MoM (MXN$6.3 bn, to MXN$110 bn), cementing its status as Mexico’s preferred fintech for deposits. On the other hand, higher interest expenses and continued credit quality woes mean the bottom line will stay in the red for the foreseeable future; losses before taxes in the quarter totaled MXN$878 million. For Klar, the profits posted late last year have proven fleeting: there was no respite in March, with operating losses widening to MXN$59 million, from MXN$44 million in February. The quarterly operating loss amounted to MXN$123 mn. Lastly, for Ualá, deposits were essentially flat, at MXN$5.8 billion, while consumer loans grew marginally to a negligible MXN$344 million from MXN$314 million in February. Operating expenses for the month jumped to MXN$79 million, not quite alarming, but still somewhat concerning that the bank is spending more than what its portfolio grows. Losses before taxes for the quarter were P$252 mn. We have no doubt Ualá Mexico does have a strategy to turn around operations, but we cannot work out what it is at this time.
Unilever will invest MXN$30 billion in Mexico through 2028, including a new plant in Nuevo León. The project will create 1,200 jobs and expand capacity, logistics, and digital operations.
Zapia, an AI assistant for WhatsApp, raised US$7.25 million in an extension of its seed funding round led by Prosus Ventures, bringing total funding to US$12 million. With over 3.5 million users in Latin America and more than half a million app downloads, Zapia plans to launch an AI agent that will automate real-world tasks like bookings and price comparisons directly through WhatsApp.
Diio raised US$2.5 million in a seed round led by Base10 Partners to expand in Mexico and Latin America.
TRADE AND ECONOMICS
The inflation rate was 0.33% in April, INEGI reported, which was above the 0.31% expectation according to the latest Citi Mexico Expectations Survey. The core inflation rate stood at 0.49%, also higher than the 0.48% consensus forecast. This translated into a last twelve-month inflation rate of 3.93% (vs. 3.91% E), the highest level in four months, and a core inflation rate of 3.93% (vs. 3.92% E), the highest since August 2024.
Economists continue to expect a 50-bps reduction in Banco de México’s key interest rate in the May 2025 monetary policy meeting, according to the latest Citi Mexico Expectations Survey. They project the interest rate to close at 7.75% (unchanged) in 2025, and 7.00% (unchanged) in 2026. The GDP growth forecast declined to 0.1% (from 0.2%) in 2025 and stayed at 1.5% for 2026. The inflation rate expectation rose to 3.80% (from 3.78%) in 2025, while core inflation edged up to 3.81% (from 3.80%). Projections for 2026 inflation were slightly higher at 3.80% (vs. 3.79%), while core inflation remained stable at 3.70%. The FX is now expected at 20.80 (vs. 20.93) for 2025 and 21.23 (vs. 21.20) for 2026.
The Producer Price Index rose 0.14% MoM in April 2025 and 6.87% YoY. Intermediate goods prices increased 0.04% MoM and 6.67% YoY, while final goods prices advanced 0.17% MoM and 6.95% YoY.
Gross fixed investment increased by 0.1% (seasonally adjusted) in February 2025, according to INEGI, which was below the +0.9% consensus expectation. This performance reflected a 1.7% rise in construction (residential +5.8% and non-residential -1.7%), while spending on machinery and equipment fell 1.1% (domestic +2.8% and imported -3.6%). Gross fixed investment decreased by 7.8% YoY (original data), mainly due to a 5.2% drop in construction (residential +14.1% and non-residential -18.0%). Machinery and equipment investment contracted 10.4% annually (domestic -3.2% and imported -15.1%).
The Monthly Indicator of Private Consumption (IMCP) increased 1.2% MoM (seasonally adjusted) in February 2025, according to INEGI. This result was driven by a 1.2% rise in consumption of domestic goods and services and a 2.7% increase in imported goods. Based on original data, private consumption declined 1.9% YoY, mainly due to a 9.2% drop in imported goods, while domestic goods showed a slight 0.1% decrease.
Light vehicle sales declined 4.6% YoY to 108,298 units in April 2025, according to INEGI. However, cumulative sales for the January-April 2025 period increased 1.4% to 473,323 units.
IMSS reported a loss of 47,442 jobs in April. The institution attributed the decline to a seasonal effect related to Easter, with job creation for the year totaling 179,289 positions.
The 88th Banking Convention started yesterday (May 8th). President Claudia Sheinbaum inaugurated the event and signed an agreement between the Mexican Government and the Association of Mexican Banks to increase financing to SMEs and analyze a potential reduction in interest rates.
The 3.0% inflation target is near, and the economy is losing traction, which provides some headroom to reduce the key interest rate, according to Jonathan Heath, Banco de Mexico’s deputy governor.
CETES auction: 28-day CETES -10 bps to 8.55%; 91-day CETES –3 bps to 8.48%; 175-day CETES -8 bps to 8.31% and 679-day CETES -10 bps to 8.60%.
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