Walmart in Mexico sees net profit rise in first quarter, yet trails competitors
Reuters
Published Apr 26, 2023 05:24PM ET
Updated Apr 26, 2023 07:16PM ET
MEXICO CITY (Reuters) -Walmart's Mexico unit on Wednesday posted a 3.7% rise in first quarter net profit as same-store sales rose in all markets, but it flagged inflation concerns after falling behind competitors in Mexico.
Walmart (NYSE:WMT) de Mexico, known as Walmex, recorded 11.5 billion pesos ($639 million) in net profit for the first three months of the year, missing a Refinitiv estimate of 12.3 billion pesos.
The company said changes in how taxes were calculated in a Central American country hit net profit, which otherwise would have grown 15.6%.
Walmex also said it lagged behind stores in Mexican retail association ANTAD, which outperformed it by 30 basis points in terms of first quarter same-store sales growth.
"We are not happy with this result," Chief Executive Guilherme Loureiro said in a webcast. Walmex had grown above ANTAD for the previous three quarters.
Compared to competitors, Walmex offered more discretional categories that were more likely to be impacted by high inflation, Loureiro said.
"Customers continue to adjust their shopping habits to afford a full basket," he said.
Mexican brokerage Monex called Walmex's performance neutral, noting the retailer had stayed defensive against tough competition but would need to examine product selection and its clients' purchasing power as inflation persists.
Both Mexico and Central America posted same-store sales growth, with revenue up 9.7% from a year earlier to land at 206 billion pesos. Walmex also added 12 stores over the quarter.
Walmex's earnings before interest, taxes, depreciation and amortization (EBITDA) grew 7.7% to 22.31 billion pesos.
Looking ahead, Walmex said it would soon ramp up services on its digital app, Cashi, after acquiring Mexican fintech company Trafalgar. The app will soon allow money transfers, cash withdrawals and the sending and receiving of remittances, the company said.
($1 = 18.0201 pesos at end-March)
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.