By Anthony Harrup

MEXICO CITY--Retail and beverages conglomerate Fomento Economico Mexicano reported a 28% drop in net profit for the third quarter on lower financial gains, while sales and operating profit increased from a year earlier.

Femsa, as the company is better known, posted net profit of 9.24 billion Mexican pesos ($462 million) for the July-September period, down from 12.76 billion pesos in the year-earlier quarter. Profit was affected by an increase in interest expense, lower foreign exchange gains and a bigger loss from discontinued operations, Femsa said.

Net majority income was 1.65 pesos a share or $0.84 an American depositary share.

Sales in the third quarter rose 8.3% to 196.77 billion pesos, led by an 11% increase at beverages unit Coca-Cola Femsa. Sales at the Oxxo convenience store chain rose 4.8%, with same-store sales flat on the year amid a slowdown in Mexico.

"We continue to see a soft consumer environment in the second half of the year, particularly in our key Mexican market," Femsa said. Sales at retail and food service operations in Europe rose 20%, helped in part by a weaker Mexican peso.

Drug-store sales rose 12% from a year-earlier and service station sales were up 8.2% on higher gasoline volume and prices.

Femsa's operating profit rose 15% to 17.37 billion pesos, and earnings before interest, taxes, depreciation and amortization, a measure of profitability, increased 20% to 28.91 billion pesos.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

October 28, 2024 10:16 ET (14:16 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.