Wal-Mart de Mexico 3Q Net Profit Rises on Higher Sales, Tax Agreement

By Anthony Harrup

MEXICO CITY--Mexico's largest retailer Wal-Mart de Mexico said its net profit increased in the third quarter amid higher sales and boosted by the release of tax provisions related to Central America.

The unit of Bentonville, Ark.-based Walmart Inc., known as Walmex, reported net profit rose 12% to 13.63 billion Mexican pesos ($742 million), compared with 12.15 billion pesos in the year-earlier quarter.

Sales in the July through September period were up 7.7% to 213.1 billion pesos, with same-store sales rising 8% in Mexico and 7.9% in Central America. Earnings before interest, taxes, depreciation and amortization rose 8.5% to 22.97 billion pesos.

The strength of the Mexican peso negatively affected sales growth, while contributing to a higher gross profit margin by lowering the cost of imports, Walmex said.

Chief Financial Officer Paulo García said in a webcast presentation that net profit benefited as the company released a substantial part of tax provisions from previous quarters after reaching an agreement in a dispute with tax authorities in a Central American country.

Walmex agreed to cover past tax liabilities and received written confirmation of taxes that will apply in future, he said.

"While we believe we had strong legal grounds to uphold our positions, we concluded that the substantial reduction on the amounts claimed and the certainty for the future were the best decision for Walmex," García said.

Write to Anthony Harrup at [e-mail]

(END) Dow Jones Newswires

October 25, 2023 18:56 ET (22:56 GMT)

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