Bimbo's Chief Financial Officer, Diego Gaxiola, announced during a conference call with analysts that the company has lowered its annual sales forecast to a low-to-mid single-digit increase, compared to the previously forecasted mid-to-high single-digit growth.
Gaxiola stated, "Compared to our initial sales forecast, the impact of exchange rates exceeded 6 percentage points."
So far this year, the Mexican peso has appreciated 13% against the dollar.
The forecast for the annual growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) has also been revised down to a mid-to-high single-digit increase from the previously forecasted high single-digit growth.
Also on Tuesday, the company, which sells small bread rolls, cakes, cookies, bagels, and tortillas in 34 countries, reported that due to price increases, its second-quarter revenue grew by 4% to 100.37 billion pesos ($5.86 billion), but this growth was offset by the peso's appreciation.
The company's sales in the United States and Canada, which account for about half of its total revenue, fell nearly 2% in peso terms but grew nearly 12% in dollar terms.
However, in Mexico, sales volumes across various product categories increased after price hikes.
Bimbo noted that the appreciation of the peso also contributed to a nearly 30% decrease in quarterly net profit to 4.3 billion pesos.
Although the significant drop in profit was partly due to the non-cash pension plan launched by Bimbo in the same period last year, even excluding the $90 million pension impact, strong local currency coupled with higher interest rates led to a doubling of financing costs.
Second-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew by 7.8%, reaching 14 billion pesos.
