Walmart Mexico posts slightly higher profit amid June sales uptick

By Carolina Pulice

MEXICO CITY (Reuters) -Walmart’s Mexico and Central America unit on Thursday posted a 5% year-on-year rise in its second-quarter net profit, boosted by slightly higher sales especially in June, though earnings were slightly behind forecasts.

Walmart (NYSE:) de Mexico, the largest retailer in Mexico, posted a net profit of 11.44 billion pesos ($668 million).

The company posted a profit of 0.66 pesos a share, just below the Refinitiv estimate of 0.69 pesos.

Quarterly revenue at the chain rose 9.25% from the year-earlier period to reach 213.724 billion pesos, boosted by a “Hot Sale” event in June, the company said in a statement, also marginally beating a Refinitiv estimate of 213.34 billion pesos.

It also saw a boost during its summer “heat wave” campaign, it said, as the North American country faced a three-week-long atypical heat wave in June which sent temperatures soaring.

“Revenue growth is gaining steam, which is what allowed us to recover our market differential in Mexico,” Chief Financial Officer Paulo Garcia said in a video message.

Same-store sales increased 8.5% in Mexico and 9.5% in Central America, and the firm expanded its physical footprint with 22 new stores in Mexico.

“During the quarter we managed to outperform the self-service and club market measured by (Mexico retail group) ANTAD by 40 basis points,” said Chief Executive Guilherme Loureiro. “We will continue working to widen the growth differential versus the market for both sales and volumes.”

Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter rose 8.5% to 21.9 billion pesos.

In the second half of the year, “it will be key to hold on to consumption in a high-inflation environment,” analysts at brokerage Monex wrote.

The firm said its gross merchandise volume (GMV), a widely watched figure for the e-commerce industry’s performance, rose 25% in Mexico, while sales in ecommerce increased 21%.

Walmex’s prepaid mobile phone service, BAIT, topped 6.4 million active users in the quarter, Loureiro added, doubling the number from the year-earlier quarter.

The service has seen rapid growth since its launch in 2020, but trails far behind Mexico’s largest provider, America Movil (NYSE:), which posted 68.4 million prepaid subscribers in the quarter.

($1 = 17.1156 pesos at end-June)