Wal-Mart de Mexico's Profit, Sales Jump

MEXICO CITY—Retailer Wal-Mart de Mexico SAB reported growth in sales and profit in the third quarter as Mexicans continued to consume at a solid pace thanks to credit and employment growth amid subdued inflation.

Walmex, as the unit of Bentonville, Ark.-based Wal-Mart Stores Inc. is known, reported a profit of 10.05 billion Mexican pesos ($543 million) in the three months through September, compared with 5.92 billion pesos in the year-earlier quarter.

Net profit from continuing operations rose 17% from a year before to 6.7 billion pesos. Walmex agreed in August to sell clothing store chain Suburbia to department store operator El Puerto de Liverpool SAB for around $1 billion.

Sales rose 11% to 126.86 billion pesos, while earnings before interest, taxes, depreciation and amortization, or Ebitda, a measure of operating cash flow, rose 12% to 11.79 billion pesos.

The median estimate of analysts polled by The Wall Street Journal called for net profit of 6.59 billion pesos on sales of 127.15 billion pesos, and Ebitda of 11.94 billion pesos.

Walmex shares closed down 0.4% on the Mexican stock exchange ahead of the report.

The Mexican economy has been growing below potential and is expected to expand just over 2% this year, while retail sales have remained robust, increasing 8.3% in the first eight months.

Retailers cite the positive impact of job creation, consumer credit and growth in remittances from Mexicans living abroad, which are boosted in peso terms by a weaker local currency.

On the other hand, inflation crept above the central bank's 3% target in mid-October, while consumer confidence has sunk to multiyear lows in part because of the sharp peso depreciation.

Write to Anthony Harrup at [e-mail]

(END) Dow Jones Newswires

October 25, 2016 17:25 ET (21:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.