| | |  Business News | October 2009 
Wal-Mart de Mexico Net Profits Up 18 Percent in 3Q
 Mark Stevenson - Associated Press
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October 09, 2009
| | Wal-Mart de Mexico says profits up 18 pct in 3rd quarter, cites bargain-seekers amid recession. | |
Mexico City - Mexico's largest retailer, Wal-Mart de Mexico SA, reported Thursday that net profits rose 18 percent in the third quarter, saying discount prices attracted more recession-squeezed shoppers even as customers spent less on average.
The Mexican unit of Wal-Mart Stores Inc. posted earnings of 3.86 billion pesos ($290 million) in the July-September period, up from 3.27 billion pesos in the third quarter of 2008.
The company said sales rose 11.9 percent to 64.3 billion pesos ($4.84 billion). Same-store sales were up 4.7 percent on the quarter, and earnings per share increased 19.2 percent.
Walmex President Eduardo Solorzano credited "price leadership" for the results, with discount stores Bodega and Wal-Mart posting the best performance.
"Prices, as you know, have been a key and will continue to be key, as clearly our customers have less money to spend and are a lot more price-conscious," Solorzano said in a conference call.
Mexico's GDP shrank 10.3 percent in the second quarter, the worst quarterly drop since comparable records began being kept in 1981. The 6.28 percent unemployment in August was the country's highest jobless rate in more than 13 years.
Amid deep recession, Mexicans spent less at the chain's stores and restaurants -- average per-customer sales fell 0.5 percent -- but that was offset by a 16.3 percent increase in the total number of customers who patronized Walmex's establishments.
The report said the company held down the increase in general expenses to 8 percent, well under the sales-figure growth.
Walmex has opened 132 new stores and restaurants this year and expects that to hit 270 by year-end. The company operates a total of 1,344 sales units.
"We expect the economic environment to still be challenging, but we have great hope that we will differentiate our offering, in terms of inventory," Solorzano said.
Walmex also announced that it has opened 70 branches of its recently approved in-house bank operation.
The company's "V" stock closed up 0.02 percent at 47.79 pesos a share before the report was released.
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