Walmex Q3 net profit jumps more than 12%, pushed by higher sales

Walmart’s Mexico unit on Wednesday posted a 12.2% year-on-year jump in its third-quarter net profit, driven mainly by stronger sales.

Walmart de Mexico, or Walmex, the biggest retailer in Mexico, posted net profit of 13.63 billion pesos ($782 million).

Quarterly revenue at the chain rose 7.7% from the year-earlier period to reach 213.07 billion pesos, missing slightly the LSEG estimate of 213.34 billion pesos.

Walmex said in a filing to Mexico’s main stock exchange that its revenues were impacted negatively by the Mexican peso’s appreciation and noted sales growth would have been higher without foreign exchange effects on its Central America operations.

Sales increased 9.5% in Mexico and 9% in Central America, with the retailer adding 24 new stores in Mexico and three in Central America, which contributed 1.6% to total revenues.

Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter rose 8.5% to 23 billion pesos.

Walmex’s earnings per share hit 0.78 pesos, beating the LSEG estimate of 0.74 pesos.

Wednesday’s results follow Walmex’s announcement on Oct. 6 that it would face an antitrust panel for alleged monopolistic practices after a three-year investigation by Mexico’s antitrust regulator Cofece.

Walmex CEO Guilherme Loureiro said in a presentation after the results that the company is confident that it has “always complied with the applicable law.”

“This is the first opportunity for Walmex to defend itself against the allegation of the investigative authority and we exercise all rights and remedies available to us under applicable law,” Loureiro said.

If the regulator determines Walmex has violated competition law, Cofece can impose a fine of up to 8% of the company’s annual income in Mexico.