Gruma's Tortilla Sales Lift Q2 Profit, Margins Hold

Gruma posted a solid second quarter. Tortilla sales rose 10% in the U.S. and 12% in Mexico, and operating profit increased in both divisions.

The corn flour and tortilla maker reported net sales of 24.4 billion pesos in the quarter, up from 22.6 billion a year earlier. Operating income reached 3.8 billion pesos, a 16% gain. Net income came in at 2.1 billion pesos.

The U.S. tortilla business, Gruma's largest segment by revenue, grew sales 10% to $932 million. The company said volumes held steady while pricing and product mix pushed the top line higher. Operating profit in the U.S. rose 8% to $108 million. Margins tightened slightly as input costs and freight expenses rose.

Mexico tortilla sales climbed 12% to 6.4 billion pesos, helped by price adjustments and a favorable product mix. The division's operating profit jumped 19% to 1.1 billion pesos, reflecting better cost absorption. Gruma's international operations, including its European and Asian businesses, posted a 9% sales gain in local-currency terms.

The company's corn flour division, which supplies industrial customers, saw sales rise 5% to 11.7 billion pesos. Operating profit there climbed 11% to 1.8 billion pesos, driven by higher volumes in Mexico and Central America.

Gruma's stock market analysis showed solid execution across its core markets. The U.S. tortilla business maintained momentum despite a competitive pricing environment. Analysts on the call noted that Gruma's cost controls and pricing power helped offset higher raw-material costs for corn and packaging.

Net debt stood at 14.2 billion pesos, roughly 1.2 times trailing EBITDA. The company did not provide formal guidance for the second half. Executives pointed to continued investment in U.S. production capacity and new product launches.

"We remain focused on expanding our tortilla footprint in the U.S. and capturing share in categories where consumers are trading down to value options," CFO Raul Cavazos said on the call.