Fomento Economico Mexicano S.A.B. de C.V’s FMX, alias FEMSA, reported net majority earnings per ADS of 72 cents (Ps. 1.46 per FEMSA unit) in second-quarter 2022, missing the Zacks Consensus Estimate of $1.04.Net consolidated income was Ps. 7,640 million (US$381.2 million), reflecting an increase of 45.4% from Ps. 5,255 million (US$262.1 million) reported in the year-ago quarter. The improvement can primarily be attributed to a rise in operating income and lower interest expenses, offset by a decline in participation in associates’ results, mainly Heineken’s.Total revenues were $8,367 million (Ps. 167,504 million), which improved 22.2% year over year in the local currency. Revenues, in U.S. dollar, beat the Zacks Consensus Estimate of $7,366 million. Revenue growth was driven by gains across all business units. On an organic basis, total revenues rose 18.9%.Fomento Economico Mexicano S.A.B. de C.V. Price, Consensus and EPS Surprise Fomento Economico Mexicano S.A.B. de C.V. price-consensus-eps-surprise-chart | Fomento Economico Mexicano S.A.B. de C.V. QuoteShares of the Zacks Rank #1 (Strong Buy) company have lost 15.1% in the past three months against the industry’s growth of 1.5%.FEMSA’s gross profit rose 15.3% year over year to Ps. 62,096 million (US$3,098.6 million). The consolidated gross margin contracted 220 basis points (bps) to 37.1%, owing to the gross margin contraction of 40 bps at Proximity, 110 bps at Health, 70 bps at Fuel operations and 310 bps at Coca-Cola FEMSA S.A.B. de C.V. KOF, partly offset by the margin expansion of 60 bps at the Logistics & Distribution business.FEMSA’s operating income (income from operations) was up 9.9% year over year to Ps. 15,355 million (US$766.2 million). On an organic basis, operating income improved 8.6%. The consolidated operating margin contracted 100 bps to 9.2%, driven by margin contractions at Coca-Cola FEMSA, FEMSA’s Health Division and the Logistics & Distribution business, offset by margin expansions at the Proximity and Fuel Divisions. Image Source: Zacks Investment Research Segmental DiscussionProximity Division: Total revenues for the segment rose 18.3% year over year to Ps. 60,136 million (US$3,000.8 million). Organic revenues improved 17.5%. The increase can primarily be attributed to a 15.6% rise in same-store sales on 3.4% growth in store traffic and an 11.1% increase in average ticket. The Proximity Division had 20,668 OXXO stores as of Jun 30, 2022. Operating income accelerated 33.7% year over year, while organic operating income rose 36%. The operating margin for the segment expanded 120 bps to 10.2%, owing to higher operating leverage.Fuel Division: Total revenues rose 32.5% to Ps. 13,220 million (US$659.7 million). Average same-station sales improved 25.2%, driven by a 16.3% increase in the average volume and 7.6% growth in the average price per liter. Results also gained from volume growth in its institutional and wholesale customer network, as well as a favorable comparison from last year due to the reduced vehicle mobility trends resulting from COVID-19. The company had 569 OXXO GAS service stations as of Jun 30. Operating income advanced 60.7% and the operating margin expanded 70 bps to 4.3%.Health Division: The segment reported total revenues of Ps. 18,844 million (US$940.3 million), up 2.5% year over year. Revenues benefited from favorable trends across all operations, offset by an unfavorable comparison base in Chile and negative currency translations. On a currency-neutral basis, total revenues increased 12.5%, whereas same-store sales increased 9%. The segment had 3,862 points of sales across all regions as of Jun 30, 2022. The operating income declined 13.4% year over year, while the operating margin contracted 80 bps to 4.9%. The increase can be attributed to a 1.9% increase in operating expenses.Logistics and Distribution: Total revenues for the segment were Ps. 16,926 million (US$844.6 million), up 50.2% year over year. On an organic basis, revenues advanced 17.3%. Revenues reflected positive demand trends across several categories in the United States, as well as strong growth of warehouse management operations in Latin America. The segment’s operating income increased 40.3%, whereas the operating margin contracted 30 bps to 4.9%. Organic operating income declined 3%.Coca-Cola FEMSA: Total revenues for the segment advanced 19.9% year over year to Ps. 57,311 million (US$2,859.8 million). KOF’s revenues were mainly aided by improved volume, pricing initiatives, a positive price mix and favorable currency translation effects. On a comparable basis, Coca-Cola FEMSA’s revenues improved 16.4% year over year. KOF’s consolidated operating income increased 5.6% and comparable operating income rose 1.8%. The segment’s operating margin contracted 180 bps to 13.4%, driven by a lower gross margin rate, offset by strong top-line growth.Financial PositionFEMSA had cash and cash equivalents of Ps. 105,900 million (US$5,300.3 million) as of Jun 30, 2022. Long-term debt was Ps. 158,995 million (US$7,957.7 million). The company incurred a capital expenditure of Ps. 6,296 million (US$314.2 million) in the second quarter, reflecting higher investments in most businesses.Other Stocks to ConsiderWe highlighted some other top-ranked stocks to consider from the broader Consumer Staples space, namely The Duckhorn Portfolio NAPA and Brown-Forman (BF.B).Duckhorn currently has a Zacks Rank #2 (Buy) and an expected long-term earnings growth rate of 12.2%. NAPA has a trailing four-quarter earnings surprise of 94.4%, on average. The company has declined 14.7% in the past year.You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Duckhorn’s current financial-year sales and earnings per share suggests growth of 10.8% and 6.9%, respectively, from the year-ago reported numbers. The consensus mark for NAPA’s earnings per share has been unchanged in the past 30 days.Brown-Forman currently carries a Zacks Rank #2. BF.B has a trailing four-quarter earnings surprise of 8.1%, on average. The company has risen 3.8% in the past year.The Zacks Consensus Estimate for Brown-Forman’s current financial year’s sales and earnings per share suggests growth of 7.2% and 14.4%, respectively, from the year-ago reported numbers. The consensus mark for BF.B’s earnings per share has been unchanged in the past 30 days. 7 Best Stocks for the Next 30 Days Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops." Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.8% per year. So be sure to give these hand-picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BrownForman Corporation (BF.B): Free Stock Analysis Report Fomento Economico Mexicano S.A.B. de C.V. (FMX): Free Stock Analysis Report Coca Cola Femsa S.A.B. de C.V. (KOF): Free Stock Analysis Report The Duckhorn Portfolio, Inc. (NAPA): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research