Wal-Mart de Mexico's Profit, Sales Jump -- Update
25 Octubre 2016 - 5:02PM
Noticias Dow Jones
By Anthony Harrup
MEXICO CITY -- Retailer Wal-Mart de Mexico SAB reported growth
in sales and profit in the third quarter as Mexicans continued to
consume at a solid pace thanks to credit and employment growth amid
subdued inflation.
Walmex, as the unit of Bentonville, Ark.-based Wal-Mart Stores
Inc. is known, reported a profit of 10.05 billion Mexican pesos
($543 million) in the three months through September, compared with
5.92 billion pesos in the year-earlier quarter.
Net profit from continuing operations rose 17% from a year
before to 6.7 billion pesos. Walmex agreed in August to sell
clothing store chain Suburbia to department store operator El
Puerto de Liverpool SAB for about $1 billion. The deal is awaiting
antitrust approval to close.
Sales rose 11% to 126.86 billion pesos, while earnings before
interest, taxes, depreciation and amortization, or Ebitda, a
measure of operating cash flow, rose 12% to 11.79 billion
pesos.
The median estimate of analysts polled by The Wall Street
Journal called for net profit of 6.59 billion pesos on sales of
127.15 billion pesos and Ebitda of 11.94 billion pesos.
Walmex shares closed down 0.4% on the Mexican stock exchange
before the report.
Same-store sales, which only count stores that have been open at
least one year, grew 7.2% in Mexico and 5.6% in Central America.
The depreciation of the Mexican peso against Central American
currencies contributes to higher growth in peso terms.
"In particular in Mexico, we had a difficult base of comparison
and a competitive environment with a lot of promotional activity,"
Walmex Chief Executive Guilherme Loureiro said in a webcast.
The slower sales growth has more to do with tough comparisons
and aggressive competition than a deceleration in Mexican retail,
said Carlos Hermosillo, head of equity research at Actinver Casa de
Bolsa.
He noted that rival Organización Soriana SAB also had a strong
third quarter, with same-store sales up 9.1% from a year
before.
Soriana boosted its No. 2 position among Mexican supermarket
chains -- behind Walmex -- with the acquisition this year of 143
Comercial Mexicana stores and applied the well-known "Julio
Regalado" promotional campaign at both Soriana and Comercial
Mexicana brand stores.
The Mexican economy has been growing below potential and is
expected to expand slightly more than 2% this year, while retail
sales have remained robust, increasing 8.3% in the first eight
months.
Retailers cite the positive impact of job creation, consumer
credit and growth in remittances from Mexicans living abroad, which
are boosted in peso terms by a weaker local currency.
On the other hand, inflation crept above the central bank's 3%
target in mid-October, while consumer confidence has sunk to
multiyear lows in part because of the sharp peso depreciation.
Write to Anthony Harrup at anthony.harrup@wsj.com
(END) Dow Jones Newswires
October 25, 2016 17:47 ET (21:47 GMT)
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