By Anthony Harrup
MEXICO CITY-Mexico's biggest retailer Wal-Mart de Mexico (WMMVY,
WALMEX.MX) said Wednesday that its net profit doubled in the second
quarter on a one-time gain from the sale of its restaurant
business, while sales and operating profits rose.
Walmex, as the unit of Wal-Mart Stores Inc. is known, reported
net profit of 10.4 billion pesos ($804 million) in the April-June
period, compared with five billion pesos in the second quarter of
2013. Excluding the Vips restaurant chain, which Walmex sold in May
to casual dining restaurant operator Alsea, net profit was up 2.5%
to 5.1 billion pesos.
Walmex sales in the quarter rose 5.6% to 104.6 billion pesos,
with improving growth at supermarkets compensating for continued
weakness at Sam's Club membership stores, which account for around
a quarter of the company's sales in Mexico. Operating cash flow
measured by earnings before interest, taxes, depreciation and
amortization, or Ebitda, rose 5.6% in the second quarter to 9.7
billion pesos.
Chief Executive Scot Rank said in a webcast that the second
quarter included a favorable calendar effect with the Easter
holiday falling in April this year instead of March. The effect of
the soccer World Cup in Brazil was about neutral, as higher sales
of electronic goods ahead of the event were offset by lower store
traffic while the matches were on in June, he added.
Mr. Rank said the recent management shake-up at Sam's Club is
expected to improve results at the division.
He stressed the retailer's plans to expand its year-old
ecommerce business to include home deliveries of groceries from its
Super Center stores starting in the third quarter, gradually
expanding that to reach nationwide coverage.
Walmex had 2,203 stores in Mexico and 676 in Central America at
the end of June. The company's shares closed down 0.3% at 34.05
pesos ahead of the report.
Write to Anthony Harrup at anthony.harrup@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires