Grupo Bimbo raises guidance after strong first quarter

MEXICO CITY — Unexpectedly strong results in its North American business has prompted Grupo Bimbo SAB de CV to raise the parent company’s sales and earnings guidance for 2026. Fueled by productivity improvements, North American operating income was sharply higher in the first quarter of 2026 while sales edged upward.

“In North America, we reached an important milestone, delivering positive sales growth for the first time since the third quarter of 2022,” Alejandro Rodriguez, chief executive officer of Grupo Bimbo, said in an April 29 investment call. “This return to year-over-year growth reflects early signs of stabilization, supported by improved execution and enhanced commercial discipline. Volumes improved sequentially across nearly all segments. We gained market share in key categories, including mainstream bread, buns, salty snacks and breakfast. These results underscore the continued progress of our transformation initiatives, which are delivering tangible productivity benefits.  Notably, this marks our third consecutive quarter of margin expansion in the region.”

Operating income of Bimbo’s North America business was 1,178 million pesos ($67.2 million), up 47% from 802 million pesos in the first quarter a year ago, and up 72% excluding the effects of foreign exchange. Net sales were 40.5 billion pesos ($2.3 billion), down 13% from 46.6 billion the year before but up 0.7% adjusted for foreign exchange.

While an improvement from 2025, quarterly operating income in North America was lower than 1,394 million pesos in 2024 and 2,770 million in 2023.

Greg Koehersen, president of Bimbo Bakeries US, said the company’s approach to pricing is generating benefits.

“Over the last couple of quarters, (we have) taken a very rational and disciplined approach related to pricing and promotion,” he said. “That clearly is a metric that we are following and we see progress on.”

More generally, Bimbo in North America continues to pursue enhanced efficiency and track progress across every aspect of its business, Koehersen said.

“We’re looking at procurement,” he said. “We’re looking at logistics, manufacturing, and, of course, overall G&A (general and administrative). What I would tell you is that we’re making progress on all of those. We measure the team and have clear KPIs (key performance indicators) around all of those different efforts.”

Koehersen said the US consumer remains under pressure, “as they have been over the last number of quarters and even the last number of years.” He said the company has experienced improved performance despite depressed consumer sentiment, “which gives us some positivity” about the company’s outlook.

The North America business “improved much more than what we expected,” Diego Gaxiola, chief financial officer, said during the call. The results lifted Grupo Bimbo’s consolidated numbers.

Net majority income of Grupo Bimbo in the first quarter of 2026 was 2,362 million pesos ($135 million), up 32% from 1,785 million a year earlier, up 26% adjusted for foreign exchange swings. Sales were 100,319 million pesos ($5.72 billion), down 3% from 103,448 million, but up 4.8% on an adjusted basis.

“We delivered mid-single-digit top-line growth, a level not seen in over two years; two consecutive quarters of double-digit EBITDA growth, also not seen in three years,” Gaxiola said. “We also achieved more than 150 basis points of EBITDA margin expansion for two consecutive quarters, making our strongest quarterly expansion since 2021, underscoring the strength of our execution and the operating leverage generated by our long-term strategic investments, including the ongoing transformation in North America, as well as continued supply chain efficiencies and reductions in general and administrative expenses. “

In updating Bimbo’s guidance for the year, Gaxiola shared numerous changes, most of which, but not all, were positive. On the negative side, he said Bimbo is incorporating 20 basis points of EBITDA margin drag from the US-Iran war.

“That said, when we consider these external factors alongside the strong results delivered in the first quarter, as well as the continued acceleration in operational efficiencies and productivity initiatives, we are increasing our top-line outlook in local currency,” he said. “We now expect net sales to grow at a mid-single digit rate; while in peso terms, because of the FX effect, we now expect from flat to a low-single-digit decline.”

Guidance on EBITDA margins previously had pointed to slight improvement versus 2025, but Gaxiola said that, even accounting for the war and other external headwinds, Bimbo is projecting full-year EBITDA margins of 14.5% to 15%, an improvement of 60 to 110 basis points.

“This increased confidence reflects the strength of our first-quarter performance, the resilience of our business model, and the growing contribution from productivity and efficiency initiatives,” he said.

Capital spending guidance was left unchanged at $1.2 billion to $1.4 billion in 2026, but Gaxiola said the company believes the final figure will be toward the lower end of the range.

During the call, Gaxiola discussed Bimbo’s hedging strategy, which he said benefited the company in the first quarter and will help for the balance of the year, despite surging wheat prices.

“Our disciplined hedging strategy, which we execute consistently year after year, we have reduced our exposure to commodities volatility,” he said. “This has allowed us to mitigate much of the near-term impact and protect our margins, despite the current environment.”

Looking into 2027, higher commodity costs may be a headwind, Gaxiola said, responding to a question from an analyst.

“Today, we have the vast majority of our needs also hedged for 2026,” he said. “As you know, we have a rolling methodology. We have just started to take some positions for 2027, which considering existing prices, might probably have slight pressure for 2027. If things were to stay as what we’re seeing today with the spot rates, the impact would not be very big, although, again, we have seen a lot of volatility.”