MEXICO CITY, April 28 (Reuters) – Walmart’s Mexico and Central America unit on Tuesday reported a slight rise in first-quarter net profit, beating analyst forecasts, as strong growth in Mexico and online sales helped offset rising costs and weaker results in Central America.
The retailer, known as Walmex, posted net profit of 12.5 billion pesos ($697.34 million) for the January-March period, up 1.5% and slightly above the 12.06 billion pesos expected by analysts polled by LSEG.
Prathibha Rajashekhar, head of the company’s chain of Sam’s Club members-only warehouse-style stores, noted that stores were expanding their range of licensed goods and seeking “emotional connection” with customers, including those related to Mario Bros. and this summer’s FIFA World Cup, which will be partly hosted by Mexico.
The World Cup and Mexico’s annual “hot sale” discount season are expected to provide an opportunity to drive online sales next quarter, Rajashekhar added.
Revenue rose 1.7% to 245.02 billion pesos, but missed the LSEG estimate of 269.96 billion pesos.
Core earnings, or earnings before interest, taxes, depreciation and amortization, slipped 0.4% to 24.98 billion pesos, just below the 25.25 billion pesos forecast.
MEXICO NET E-COMMERCE SALES JUMP
Actinver Equity Research said in a note that EBITDA margin was below its estimates, and anticipated a neutral-to-negative stock reaction on Wednesday.
Net e-commerce sales in Mexico jumped 14.4%, helped by 20% growth in on-demand sales, although marketplace gross merchandise value fell 14.4%.
Revenue in the country rose to 204.36 billion pesos, while operating income edged up 0.3% to 15.9 billion pesos. In Central America, revenue totaled 40.66 billion pesos and operating income dropped 15.4% in peso terms, or 2.7% excluding currency effects.
Rajashekhar said in a video message the group’s mega-size stores benefited from seasonal events such as Valentine’s Day.
In March, the retailer said it planned to invest about 43 billion pesos in 2026, roughly 10% more than the previous year, as it pushed ahead with expansion and logistics projects.
It also said at the time it would propose a share buyback program of up to 10 billion pesos.
On Tuesday, Walmex said shareholders had approved an ordinary cash dividend of 1.16 pesos per share and authorized the buyback plan through the next annual shareholders meeting.
($1 = 17.9252 Mexican pesos at end-March)
(Reporting by Kylie Madry; Writing by Jorge Ollero; Editing by Natalia Siniawski, Sarah Morland, Rod Nickel)
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