Metals and mining outshine a sluggish consumer patch

This season’s defining story is a stark divergence: while consumer-facing industries grind to a near halt, metals and mining sprint ahead. Revenue growth ranges from a scorching +32.6% in metals to a -4.9% contraction in consumer health, and the gap between the strongest and weakest is a chasm of nearly 38 percentage points. The winners are those tied to commodities and hard assets; the losers are those reliant on discretionary spending and soft demand.

Revenue growth by industry (median YoY)

Commodities lead the charge with a triple-digit earnings surge

GMEXICO, the sole metals and mining player, is the undisputed star: revenue grew +32.6%, EBITDA +47.7%, and net profit +62.3% year over year. This isn’t just a revenue story—profitability is expanding faster than the top line, signaling strong operating leverage. The company’s prior-period net profit growth of +26.6% already set a high bar, but this quarter’s +62.3% is a clear acceleration, making it the standout performer in the entire coverage universe.

Consumer staples and retail are stuck in low gear, with some names in reverse

At the other end, the laggards are concentrated in consumer-facing sectors. LAB, in consumer health, saw revenue fall -4.9%, with EBITDA down -8.7%—a clear sign of margin pressure. BIMBO, in packaged foods, posted -3.3% revenue, though a +9.5% EBITDA gain shows cost discipline. CARSO, the industrial conglomerate, also struggled with -4.3% revenue and -10.3% EBITDA. These names are all trading at valuations that look rich relative to their growth, especially CARSO at 39.1x P/E with negative growth—a warning sign for investors.

FEMSA’s profit explosion is the surprise of the season

The biggest plot twist comes from FEMSA, the beverages and retail hybrid. Revenue grew a modest +6.1%, but net profit soared +155.4% year over year—a dramatic reversal from the prior period’s -57.1% decline. This isn’t just a recovery; it’s a transformation. While the top line is steady, the bottom line is exploding, suggesting operational efficiencies or one-off gains. Investors are paying 16.4x P/E and 6.6x EV/EBITDA for this earnings power, which looks reasonable if the profit surge is sustainable.

Valuation gaps reveal where growth is cheap and where it’s priced for perfection

Looking at value, ALSEA stands out: with revenue growth of +0.3% and EBITDA up +20.4%, it trades at just 13.7x P/E and 4.0x EV/EBITDA—a bargain for a restaurant operator with strong margin expansion. Similarly, LAB, despite revenue decline, trades at 8.3x P/E and 4.6x EV/EBITDA, which could appeal to value investors if the top line stabilizes. On the expensive side, CARSO at 39.1x P/E with negative growth is clearly priced for perfection, and BIMBO at 22.2x P/E with -3.3% revenue growth looks rich. The market is rewarding profitability over growth, but for those willing to look, there are pockets of value.

Dividend yields are modest but present, with banks leading the income pack

For income investors, the banking sector offers the highest yields, with BANORTE at 8.9x P/E and BBAJIO at 7.3x P/E, though specific yields aren’t disclosed. Among those with data, LAB and LIVERPOL both trade at 8.3x P/E, suggesting potential for attractive dividends, but no explicit yield is given. The absence of yield figures is a gap, but the low multiples in banks imply that income potential is embedded in the price.

Long-term compounders stand out, but near-term momentum is mixed

Looking at 3-year revenue CAGRs, INBURSA leads with +16.0%, followed by GAP at +14.8% and BBAJIO at +10.3%. These are the true long-term growers, and their current valuations (8.3x, 18.6x, and 7.3x P/E respectively) suggest that INBURSA and BBAJIO are still cheap for their growth trajectories. However, the near-term picture is mixed: GAP’s prior-period revenue growth was just +1.2%, a sharp slowdown from its CAGR, while INBURSA’s prior-period net profit grew +10.7%—decent but not spectacular. The key watch item is whether these compounders can re-accelerate, especially in a sluggish consumer environment.

As the season wraps, the message is clear: commodities are the engine, consumer is the brake. GMEXICO’s acceleration is a beacon, while FEMSA’s profit surge offers a glimmer of hope in the consumer space. But with many consumer names still in contraction, the next quarter will test whether this divergence narrows or widens. Watch for any signs of a consumer rebound, particularly in retail and restaurants, and whether metals can sustain their momentum. The market’s current pricing suggests investors are cautious, but the data offers selective opportunities.

Players: growth & yield (no absolute levels)