Walmart in Mexico posts 5% dip in Q3 profit as costs grow
Updates with additional details on chair, antitrust investigation
By Kylie Madry
MEXICO CITY, Oct 23 (Reuters) -Walmart's Mexico and Central America unit reported a 5% dip in its third-quarter net profit on Wednesday as both the costs of its increased sales and general expenses grew.
Walmart de Mexico WALMEX.MX, the country's largest retailer, posted a net profit of 12.93 billion pesos ($656.61 million), below the average forecast of 13.62 billion pesos seen by analysts polled by LSEG.
Quarterly sales were up 8% from the year-ago quarter to reach 228.43 billion pesos, a touch under the mean estimate of 229.12 billion pesos from analysts polled by LSEG.
In line with the increased sales was the cost of sales, up more than 7% year-over-year. General expenses were up nearly 15% and taxes leaped some 23%.
Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter rose 6.5% to 24.46 billion pesos, compared with the same period last year.
"Our focus on speeding up the omnichannel experience through simplification, digitalization and automatization is putting us on track toward making our business more efficient," CEO and executive president Ignacio Caride said in a statement.
The earnings are the company's first full-quarter results under Caride, a former executive at e-commerce giant MercadoLibre who took the helm at Walmex at the end of April.
The firm also said that its board had approved the naming of Guilherme Loureiro, its former CEO, as chairman of the board, taking over for Kathryn McLay who leads Walmart International.
In Mexico, the gross merchandise value (GMV) of products sold on Walmex's e-commerce channels represented 6.8% of its total GMV in the quarter, the firm said.
Same-store sales grew 4.5% in Mexico and nearly 4% in Central America, while it added 32 stores in Mexico and seven in Central America.
Walmex, Mexico's largest employer, is currently awaiting a ruling from the country's antitrust watchdog Cofece on an investigation that began in 2020 over whether the company engaged in monopolistic practices.
The firm said Wednesday that in a Sept. 30 audience it had asked one of the Cofece commissioners to step off the case. It added that it expected the "administrative stage" of the investigation to be resolved in the fourth quarter this year.
($1 = 19.6921 Mexican pesos at end-September)
Reporting by Kylie Madry; Writing by Brendan O'Boyle; Editing by Anthony Esposito, Will Dunham and Aurora Ellis
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