Grupo Bimbo saw sales reach a record in the second fiscal quarter, driving profits up despite a contraction in operating margins.
Net sales for the quarter were $4.7 billion, an increase of 18% over the same quarter last year, and a company record for the second consecutive quarter. Adjusted earnings were $635.5 million, a 13% increase.
The positive numbers came despite a contraction in operating margins of 60 basis points (0.6 percentage point), led by a drop in North America of 210 basis points. Company officials attributed this to inflation, increased labor costs and supply chain difficulties. But the narrow margins were offset by higher sales in every region Bimbo serves: 16.8% higher year-over-year in North America, 21.6% higher in Mexico and 30.8% higher in Latin America.
“Our net sales and profits reached historic levels for a second quarter, despite higher commodity prices and a high overall inflationary environment,” CFO Diego Gaxiola said in a statement. “We are pulling several levers to offset the rising inflation, including revenue growth management strategies, our category and product mix, pricing actions, productivity initiatives, and we continue to proactively look for restructuring opportunities.”