Fomento Economico Mexicano de CV : Report of foreign issuer rules 13a-16 and 15d-16 of the Securities Exchange Act

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of October 2018

FOMENTO ECONÓMICO MEXICANO, S.A.B. DE C.V.

(Exact name of Registrant as specified in its charter)

Mexican Economic Development, Inc. (Translation of Registrant's name into English)

United Mexican States (Jurisdiction of incorporation or organization)

General Anaya No. 601 Pte.

Colonia Bella Vista Monterrey, Nuevo León 64410

México

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F

x

Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _______

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _______

Indicate by check mark whether by furnishing the information contained in this

Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes

¨

No

x

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_____________

FEMSA Announces Third Quarter 2018 Results

Monterrey, Mexico, October 26, 2018 - Fomento Económico Mexicano, S.A.B. de C.V. ("FEMSA") (NYSE: FMX; BMV: FEMSAUBD) announced today its operational and financial results for the third quarter of 2018.

As of the third quarter of 2018, we have made a change to the disclosure related to our businesses formerly named as FEMSA Comercio's "Retail Division": We have removed those operations that are not directly related to our proximity store business, namely our restaurant and discount retail units, from this segment. The segment is now named the "Proximity Division", and will only include proximity and proximity-related operations, most of which operate today under the OXXO brand across markets. This change will provide a more accurate picture of the performance of this key, high-growth business.

FINANCIAL HIGHLIGHTS:

• · 7.9% revenue growth (8.9% on an organic1 basis) at FEMSA Consolidated

• · 12.1% revenue growth (11.7% on an organic1 basis) at FEMSA Comercio's Proximity Division

• · 29.5% income from operations growth at FEMSA Comercio's Health Division

• · 41.5% income from operations growth at FEMSA Comercio's Fuel Division

• · 8.2% income from operations growth (-6.9% on an organic1 basis) at Coca-Cola FEMSA

FINANCIAL SUMMARY FOR THE THIRD QUARTER AND FIRST NINE MONTHS OF 2018

Change vs. same period of last year

Income

FEMSA CONSOLIDATED FEMSA COMERCIO

Proximity Division Health Division Fuel Division

COCA-COLA FEMSA

Revenues 3Q18 7.9%12.1%10.2%26.7%(0.7)%

Gross Profit

from Operations

Same-Store Sales

YTD18 5.1%12.0%10.2%21.6%(4.7)%

3Q18 9.3%17.2%11.8%47.4%0.6%YTD18 6.9%15.7%14.1%47.0%(2.1)%

3Q18 8.1%8.7%29.5%41.5%

YTD18

3Q18

YTD18

6.1%

11.6%46.0%122.8%

• 6.2%5.5%

• 6.3%6.2%

• 7.1%5.3%

8.2%1.6%Eduardo Padilla, FEMSA's CEO, commented:

"During the third quarter, we continued to see our business units making steady progress. Store counts, comparable sales and gross margins once again grew across retail formats and markets. However, operating margins were under moderate pressure particularly in Mexico, reflecting tight labor conditions and higher operational costs, as well as OXXO's increased international organic expansion efforts. At Coca-Cola FEMSA, we saw positive top-line performance in several of our markets, particularly Mexico, as well as encouraging signs of progress in other regions, including the recently acquired operations in Guatemala and Uruguay.

On the strategic front, there are interesting news as well. We recently announced our entry into Ecuador through our Health Division, with a transaction that is still subject to regulatory approval, and today we are announcing our entry into Peru through the opening of our first OXXO store in the city of Lima. These two announcements reflect our commitment to continue expanding our small-box platform across Latin America.

1 Excludes the effects of significant mergers and acquisitions in the last twelve months and the results of Coca-Cola FEMSA Venezuela in 2017. For this quarter, it includes the consolidation of Caffenio, our sole coffee supplier in Mexico, which we now control with 50% share ownership.

1

As we look toward the end of 2018 and into next year, we continue to see some macroeconomic uncertainty in many of our markets, including Mexico and Brazil. However, uncertainty can often bring opportunity, and with that view we are optimistic about our possibilities to create value as we chart our strategic path for 2019 and beyond."

Results are compared to the same period of previous year

FEMSA CONSOLIDATED

FEMSA CONSOLIDATED 3Q18 Financial Summary

(Millions of Ps.)

Revenues

Income from Operations

Income from Operations Margin (%)

3Q18 118,3719,9928.4

3Q17 109,7499,2408.4

Var.

Org.

7.9%8.1%

8.9% (1.2)%

0 bps

Operative Cash Flow (EBITDA)

Operative Cash Flow (EBITDA) Margin (%)

15,04612.7

14,106

6.7%

2.6%

• 12.9-20 bps

Net Income

6,598

33,715

(80.4)%

CONSOLIDATED BALANCE SHEET

(Millions of Ps.)

As of September 30, 2018

Cash

Short-term debt Long-term debt Net debt3

Ps.	US$2
54,166	2,896
12,349	660
117,071	6,259
75,254	4,023

Total revenues increased 7.9%, reflecting growth across FEMSA Comercio's three business units, partially offset by a slight decrease at Coca-Cola FEMSA. On an organic basis,1 total revenues grew 8.9%.

Gross profit grew 9.3%. Gross margin expanded by 50 basis points, reflecting strong margin expansion across all business units.

Income from operations increased 8.1%. On an organic basis,1 income from operations decreased 1.2%, reflecting a decline at Coca-Cola FEMSA. Consolidated operating margin remained in line at 8.4% of total revenues, mostly driven by margin expansion at Coca-Cola FEMSA reflecting a non-cash operating foreign exchange gain in Mexico, and operating expense efficiencies in South America. This expansion was offset by modest margin contraction at FEMSA Comercio's Proximity Division, driven by higher operating expenses.

Our effective income tax rate was 36.6% in 3Q18 compared to 16.4% in 3Q17.

Net consolidated income decreased 80.4% to Ps. 6,598 million, reflecting a demanding comparison base caused by the extraordinary non-operating income generated in 3Q17 from the sale of 5.24% of the combined interest in the Heineken Group. This decrease also reflected a non-cash foreign exchange loss related to FEMSA's U.S. dollar denominated cash position, as impacted by the appreciation of the Mexican peso and partially offset by lower interest expense.

1 Excludes the effects of significant mergers and acquisitions in the last twelve months and the results of Coca-Cola FEMSA Venezuela in 2017. For this quarter, it includes the consolidation of Caffenio, our sole coffee supplier in Mexico, which we now control with 50% share ownership.

• 2 The exchange rate published by the Federal Reserve Bank of New York for September 28, 2018 was 18.7050 MXN per USD.

• 3 Includes the effect of derivative financial instruments on long-term debt.

October 26, 2018

2

Net majority income was Ps. 1.31 per FEMSA Unit2 and US$ 0.70 per FEMSA ADS.

Capital expenditures amounted to Ps. 6,650 million, reflecting higher investments across all business units.

FEMSA COMERCIO - PROXIMITY DIVISION

FEMSA COMERCIO - PROXIMITY DIVISION

3Q18 Financial Summary

(Millions of Ps. except same-stores sales)

Same-store sales (thousands of Ps.) Revenues

3Q18 811

3Q17

Var.

Org.

7636.2%

43,96739,21212.1%11.7%

Income from Operations

Income from Operations Margin (%)

3,6108.2

3,3208.7%6.3% 8.5-30 bps

Operative Cash Flow (EBITDA)

Operative Cash Flow (EBITDA) Margin (%)

4,99711.4

4,43612.6%

9.4%

11.310 bps

Total revenues increased 12.1% in 3Q18 compared to 3Q17. On an organic basis,1 total revenues grew 11.7%, reflecting the opening of 182 net new OXXO stores in the quarter to reach 1,430 total net new store openings for the last twelve months. As of September 30, 2018, FEMSA Comercio's Proximity Division had a total of 17,478 OXXO stores. OXXO's same-store sales increased an average of 6.2%, reflecting resilient consumer demand and the undemanding comparison base that was affected by the natural disasters in central and southern Mexico during September 2017. This performance was driven by 3.6% growth in average customer ticket and a robust increase of 2.5% in store traffic.

Gross profit increased 17.2%, resulting in a gross margin expansion of 170 basis points to 38.8% of total revenues. This expansion mainly reflects: i) sustained growth of the services category, including income from financial services; ii) increased and more efficient promotional programs with our key supplier partners; iii) healthy trends in our commercial income activity, and iv) the consolidation of Caffenio.

1Excludes the effects of significant mergers and acquisitions in the last twelve months. For this quarter, it includes the consolidation of Caffenio, our sole coffee supplier in Mexico, which we now control with 50% share ownership.

2FEMSA Units consist of FEMSA BD Units and FEMSA B Units. Each FEMSA BD Unit is comprised of one Series B Share, two Series D-B Shares and two Series D-L Shares. Each FEMSA B Unit is comprised of five Series B Shares. The number of FEMSA Units outstanding as of September 30, 2018 was 3,578,226,270, equivalent to the total number of FEMSA Shares outstanding as of the same date, divided by 5.

October 26, 2018

3

Income from operations increased 8.7%. On an organic basis,1 income from operations grew 6.3%. Operating expenses increased 19.7% to Ps. 13,440 million, above revenues, mainly reflecting: i) higher secure cash transportation costs driven by increased volume and higher operational costs including fuel prices; ii) our continuing and gradual shift from commission-based store teams to employee based teams; iii) an increase in electricity tariffs during the last month of the quarter, and iv) organic growth of OXXO's international operations that achieved healthy sales levels per store, but have yet to reach sufficient scale to better absorb overhead. Operating margin contracted 30 basis points to 8.2% of total revenues.

FEMSA COMERCIO - HEALTH DIVISION

FEMSA COMERCIO - HEALTH DIVISION

3Q18 Financial Summary

(Millions of Ps. except same-stores sales)

3Q18	3Q17	Var.
Same-store sales (thousands of Ps.)	1,532	1,442	6.3%
Revenues	12,562	11,395	10.2%
Income from Operations	540	417	29.5%
Income from Operations Margin (%)	4.3	3.7	60 bps
Operative Cash Flow (EBITDA)	789	636	24.1%
Operative Cash Flow (EBITDA) Margin (%)	6.3	5.6	70 bps

Total revenues increased 10.2% in 3Q18 compared to 3Q17, mainly driven by growth in our South American operations as well as a continuation of gradually improving trends in Mexico. As of September 30, 2018, FEMSA Comercio's Health Division had a total of 2,303 points of sale across our territories. This figure reflects the addition of 52 net new stores, including a small acquisition in Colombia to reach 125 total net new stores for the last twelve months. Same-store sales for drugstores increased an average of 6.3%, which includes a positive currency translation effect related to the depreciation of the Mexican peso compared to the Chilean and Colombian pesos in our operations in South America.

1 Excludes the effects of significant mergers and acquisitions in the last twelve months. For this quarter, it includes the consolidation of Caffenio, our sole coffee supplier in Mexico, which we now control with 50% share ownership.

October 26, 2018

4