Mexico's biggest retailer, Wal-Mart de Mexico, said Thursday that its net profit grew 8% in the first quarter thanks to higher sales and operating gains in a difficult economic environment.
Net profit in the January-March quarter was 7.1 billion Mexican pesos ($371 million), compared with 6.5 billion pesos a year before. Sales rose 7.2% to 132.6 billion pesos, while operating cash flow measured by earnings before interest, taxes, depreciation and amortization, or Ebitda, was up 7.6% at 12.8 billion pesos.
It was the slowest sales growth for the unit of Bentonville, Arkansas-based Wal-Mart Stores Inc., in over two years, affected by an incipient slowdown in consumption and negative calendar effects. February 2016 had an extra leap-year day, while the Easter holiday, which tends to help sales, moved to April this year from March.
"The start of the year was challenging. We see opportunities to improve, but we're satisfied with our sales performance," Chief Executive Guilherme Loureiro said in a webcast presentation of Walmex's results.
He said most of the sales growth in the quarter came from same-store sales, which increased 4.1% in Mexico and 2.1% in Central America. Stores opened in the past year contributed 1.9 percentage points of growth.
The results were in line with the median expectations of analysts polled by The Wall Street Journal, which projected net profit of 7.2 billion pesos on sales of 132.7 billion pesos, and Ebitda of 12.7 billion pesos.
A number of retailers in Mexico were affected by widespread protests at the start of the year over gasoline price increases, which led to looting and the temporary closure of dozens of stores. Consumer confidence fell to a record low in January, along with the Mexican peso, and inflation accelerated in March to a nearly eight-year high.
Organización Soriana SAB, which runs the country's second-largest supermarket chain, cited such problems in reporting a 1.3% rise in first-quarter sales, with same-store sales up 1.7% from a year before. Grupo Comercial Chedraui had 4% same-store sales growth in Mexico.
Walmex shares fell 2% on the Mexican stock exchange Thursday ahead of the report.
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(END) Dow Jones Newswires
April 27, 2017 17:46 ET (21:46 GMT)