Walmart's margins in Mexico tighten as costs outpace sales growth
WMT•Walmart's Mexico unit missed third-quarter profit and revenue estimates as net profit fell 6% to 11.03 billion pesos and revenue rose 3% to 248.83 billion pesos. EBITDA margin narrowed 30 basis points to 10.2%, while e-commerce GMV grew 15% in Mexico and 23% in Central America.
1. Profit and revenue miss
Walmart's Mexico unit missed third-quarter profit estimates as rising costs and investments weighed on margins. Net profit fell 6% to 11.03 billion pesos, below analysts' 12.26 billion-peso estimate, while revenue increased 3% to 248.83 billion pesos, short of the 250.44 billion-peso estimate.
2. Costs weigh on margins
EBITDA rose 0.4% to 25.37 billion pesos, while its margin narrowed 30 basis points to 10.2%. General expenses rose nearly 6% and sales expenses increased more than 6% as the company invested in growth. Same-store sales rose almost 2% in Mexico, with ticket growth of 1.6% and traffic broadly flat. E-commerce GMV increased 15% in Mexico and 23% in Central America.
