Walmart Mexico Profit Slips as Rising Operational Costs Outpace E-Commerce Gains
Walmart de Mexico reports a third-quarter profit decline as surging operational expenses and strategic investments overshadow double-digit e-commerce growth.
POLICY WIRE — Mexico City, Mexico — Walmart de México y Centroamérica reported a decline in third-quarter profitability on Tuesday, as escalating operational expenses and strategic investments weighed heavily on the retailer’s bottom line.
The company saw its net profit drop by 9% during the period, a shortfall largely attributed to increased financial costs and a specific one-off accounting adjustment. These fiscal pressures persisted despite the retailer achieving double-digit growth within its e-commerce division.
Performance metrics for the quarter indicated same-store sales growth of 3.2% in Mexico and 2.1% in Central America. Meanwhile, the company’s e-commerce gross merchandise volume surged by 19%, bolstered by a 25% acceleration in on-demand services across its network of more than 1,370 stores.
Gross margins remained steady at 24.3% of total revenues, supported by contributions from new business ventures. However, the broader financial picture remains strained, as evidenced by a previous second-quarter report showing an 8% revenue increase alongside a 10% decline in net profit to MXN11.23 billion.
Management is currently navigating a complex economic environment characterized by inflation, labor reforms, and tariff-related costs. These factors, combined with MXN41.8 billion in strategic investments, have consistently outpaced revenue gains, creating a disconnect between the company’s sales expansion and its profitability.
Reporting by Policy-Wire (PW)
