By Anthony Harrup
MEXICO CITY -- Mexico's biggest retailer Wal-Mart de Mexico SAB said Thursday that its net profit grew 1.7% in the fourth quarter of 2017 as the company increased sales and kept expenses under control.
Walmex, the Mexico and Central America unit of Arkansas-based Walmart Inc., reported net profit of 10.6 billion Mexican pesos ($573 million) in the October-December period, compared with MXN10.4 billion a year earlier.
Excluding a one-time gain in the year-earlier quarter related to the sale of Walmex's clothing store chain Suburbia, net profit was up 12.5%.
Sales in the quarter rose 6.8% to MXN168.2 billion, while earnings before interest, taxes, depreciation and amortization, a measure of operating cash flow, increased 9.1% to MXN16.9 billion. Expenses were up 5.7%, growing less than sales and contributing to higher earnings.
Mexican retail sales growth slowed in 2017 as a weaker peso against the U.S. dollar and a jump in gasoline prices helped push inflation to its highest level since mid-2001, prompting the central bank to raise interest rates. While the effect of higher prices was partly offset by strong employment, average wages fell in real terms and consumer credit growth slowed.
Walmex's full-year sales grew 7.7% in 2017, a decline from the double-digit growth seen in 2016 and 2015.
The year was marked by "macroeconomic setbacks," as well as protests in January over gasoline prices that led to temporary store closures, and September's two major earthquakes, Chief Executive Guilherme Loureiro said in a webcast presentation of the results.
Same-store sales accounted for most of last year's revenue growth, increasing 6.3% in Mexico and 4.9% in Central America. New stores contributed 2.2 percentage points of growth. Online sales expanded 34% and accounted for 1% of Walmex's total sales, he said.
In Mexico, sales grew 2.5 percentage points more than those of retail association Antad, of which Walmex is also a member, and for a third consecutive year the company gained market share against competing supermarket chains, he added.
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(END) Dow Jones Newswires
February 15, 2018 18:44 ET (23:44 GMT)
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