Mexican bottled beverage giant Arca Continental saw its shares surge over 4% on Thursday, following the release of first-quarter results showing that its beverage sales exceeded expectations and core profits remained stable despite Mexico's new sugary drink health tax introduced earlier this year. The rally added approximately 13.9 billion pesos to the company's market value.
Arca, the second-largest Coca-Cola bottler in Latin America and a leading distributor of snacks and beverages across the Americas, produces brands such as Sprite, Fanta, Powerade, and a variety of bottled waters.
Financial reports indicate that Arca's total sales volume increased by 2% year-on-year in the first quarter. Bottled water sales, which grew nearly 10%, served as the primary driver, while core carbonated beverages also saw a 1% rise. Market analysts noted that prior concerns over the tax's impact were "overblown," with actual results surpassing even the "already optimistic expectation of flat sales."
Supported by steady sales volume, the company's EBITDA remained largely unchanged at 10.63 billion pesos, exceeding analyst forecasts of 10.2 billion pesos. Another institutional analyst praised the company's "resilient" performance under tax pressure and suggested that market expectations for 2026 may be overly conservative.
Looking ahead, Arca plans to ramp up promotional efforts for Coca-Cola and Coke Zero ahead of the FIFA World Cup hosted across the United States, Canada, and Mexico. The company also aims to boost consumer demand in weaker markets such as Argentina by maintaining stable operating costs and focusing on value-oriented strategies.
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