Wal-Mart de Mexico Profit Falls

MEXICO CITY—Wal-Mart de Mexico SAB, Mexico's biggest retailer, said Tuesday its net profit fell in the second quarter, while sales and operating profits saw double-digit increases from a year earlier.

The unit of Arkansas-based Wal-Mart Stores Inc. reported net profit of 6.19 billion Mexican pesos ($330 million) in the April-June quarter, compared with 6.81 billion pesos a year earlier. Excluding discontinued operations, net profit was up 14.5%.

Sales rose 11.5% from a year before to 127.55 billion pesos, helped by strong consumption in Mexico where the company runs 2,362 stores, and gains in Central America where it has 709 stores.

Operating cash flow measured by earnings before interest, taxes, depreciation and amortization rose 12.3% to 11.56 billion pesos.

The results were in line with the median expectations of six analysts polled by The Wall Street Journal, which called for net profit of 6.2 billion pesos on sales of 127.1 billion pesos, and Ebitda of 11.5 billion pesos.

Mexican retail sales have been robust in 2016, thanks to increases in employment and wages, low inflation and strong remittances from Mexicans living abroad that have been boosted even more in peso terms because of the depreciation of the Mexican currency.

Retail association Antad, of which Walmex is a member, reported same-store sales up 6.8% in the first half of the year, and total sales up 10% from the first six months of 2015.

Walmex shares closed down 2.6% on the Mexican stock exchange ahead of the report.

Write to Anthony Harrup at [e-mail]

(END) Dow Jones Newswires

July 26, 2016 17:05 ET (21:05 GMT)

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