By Kylie Madry
MEXICO CITY (Reuters) -Walmart’s Mexico and Central America unit on Wednesday reported a 5% decline in third-quarter net profit as both the cost of increased sales and overheads rose.
Walmart (NYSE:) de Mexico, the country’s largest retailer, posted a net profit of 12.93 billion pesos ($656.61 million), lower than the average forecast of 13.62 billion pesos from analysts surveyed by LSEG.
Quarterly revenue rose 8% from the same quarter last year to 228.43 billion pesos, slightly below the average estimate of 229.12 billion pesos from analysts surveyed by LSEG.
In line with the higher turnover, sales costs increased by more than 7% year on year. General costs increased by almost 15% and taxes increased by about 23%.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter rose 6.5% to 24.46 billion pesos, compared to the same period last year.
“Our focus on accelerating the omnichannel experience through simplification, digitalization and automation puts us on track to make our business more efficient,” CEO and executive president Ignacio Caride said in a statement.
The earnings are the company’s first full quarterly results under Caride, a former e-commerce giant executive MercadoLibre (NASDAQ:) who took over at Walmex at the end of April.
The company also said its board has approved the appointment of Guilherme Loureiro, its former CEO, as chairman of the board, taking over from Kathryn McLay, who leads Walmart International.
In Mexico, the gross merchandise value (GMV) of products sold through Walmex’s e-commerce channels represented 6.8% of total GMV in the quarter, the company said.
Same-store sales grew 4.5% in Mexico and nearly 4% in Central America, while adding 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 into whether the company engaged in monopolistic practices.
The company said on Wednesday that it had asked one of Cofece’s commissioners to leave the business during an audience on September 30. It added that it expected the “administrative phase” of the investigation to be completed in the fourth quarter of this year.
($1 = 19.6921 Mexican pesos at the end of September)
