Weak Peso Boosts Wal-Mart de Mexico Profits

MEXICO CITY—Retailer Wal-Mart de Mexico said Tuesday its net profit rose 30% on the year in the first quarter as healthy consumer spending continued to stoke sales.

Walmex, as the retailer is known, reported quarterly net profit of 6.72 billion pesos, or $387 million, as sales rose 13.2% to 125.5 billion pesos. Profitability and cash generation overshot analyst expectations.

"Consumption continues to be favorable," said Walmex Chief Executive Guilherme Loureiro, who added that the retailer's sales growth outpaced competitors in all segments and regions.

The weak Mexican peso has been boosting purchasing power for families that receive U.S. dollar remittances from relatives. Mexicans living abroad sent $24.8 billion back to the country in 2015, a seven-year high. Remittances have continued to grow this year thanks to favorable labor conditions in the U.S.

Walmex executives said they slashed expenses during the quarter and focused on key items that drive customers into stores, such as food and other edibles.

Walmex accounts for around 6% of Wal-Mart Stores Inc.'s annual global sales and is one of the Bentonville, Ark., company's biggest overseas operations.

Write to Amy Guthrie at [e-mail]

(END) Dow Jones Newswires

April 26, 2016 18:15 ET (22:15 GMT)

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