Wal-Mart de Mexico 2Q Net Profit Rises 9.3%

By Anthony Harrup

MEXICO CITY--Retailer Wal-Mart de Mexico posted a 9.3% increase in second-quarter net profit on higher sales and operating gains.

Walmex, as the unit of Bentonville, Ark.-based Walmart is known, posted profit of 12.51 billion Mexican pesos ($681.4 million) for the April-June quarter, equivalent to 0.717 pesos a share. Profit rose from 11.44 billion pesos in the year-earlier quarter.

Sales increased 6.4%, to 227.42 billion pesos. Same-store sales, excluding stores opened in the past year, increased 5.5% in Mexico and 2.6% in Central America.

New businesses contributed to gross margin expansion, particularly in Mexico, while higher labor costs and investments in new stores, new businesses and e-commerce pushed up general expenses, Walmex said.

Earnings before interest, taxes, depreciation and amortization, a measure of profitability, rose 7.7%, to 23.54 billion pesos. Operating profit was up 7.9%, at 17.98 billion pesos.

Walmex said that after reviewing its operations in Central America, it has dropped plans announced in January 2022 to pursue strategic alternatives for Honduras, El Salvador and Nicaragua. Those options had included possible joint ventures, strategic partnerships or alliances, or a sale.

"We believe that these businesses are all financially strong, are well placed to serve their customers and communities, and continue to have significant growth potential which is best realized under continued Walmex ownership," the company said.

Write to Anthony Harrup at anthony.harrup@wsj.com

(END) Dow Jones Newswires

July 24, 2024 18:16 ET (22:16 GMT)

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