Walmart in Mexico posts Q2 profit boost as sales climb

By Kylie Madry and Aida Pelaez-Fernandez

MEXICO CITY (Reuters) -Walmart’s Mexico and Central America unit posted a 9.3% year-on-year climb in its second-quarter net profit on Wednesday, as its sales and in-store traffic grew.

Net profit reached 12.51 billion pesos ($684.12 million), slightly below an average forecast of 12.872 billion pesos seen by analysts polled by LSEG, while revenues were up 6.4% to 225.75 billion pesos, also just below estimates.

Same-store sales in the quarter were up 5.5% in Mexico and 2.6% in Central America, the firm, known as Walmex, said.

It added that its earnings were driven by growth in its various store formats and a strong performance by new stores opened in the quarter.

Spending was up in both Mexico and Central America, the firm said, as it opens new stores, hires more employees and invests in e-commerce.

The quarter’s results are the first since the company’s board of directors appointed Ignacio Caride as Walmex’s new CEO at the end of April.

“Our business strategy continues to focus on our omnichannel abilities to better serve our clients, at the same time that we are putting greater emphasis on strengthening automation, digitalization and simplification,” Caride, the company’s former e-commerce head, said in the company’s statement.

Walmex’s e-commerce division made up around 8% of the firm’s gross merchandise value – the total value of goods sold – in Mexico in the quarter, it said.

Walmex’s cellphone service bait hit 13.7 million active users in the second quarter, more than doubling the year-ago figure and up 400,000 users from the first quarter.

The firm has outlined plans to invest heavily in its Central American operations, announcing plans in May to invest some $700 million in Guatemala and around $600 million in Costa Rica over the next five years.

($1 = 18.2862 Mexican pesos at end-June)