UPDATE 2-Mexico's Walmex first-quarter profit falls 4.5 percent

Tue Apr 22, 2014 7:55pm EDT

(Adds CEO comment, detail on same-store sales)

MEXICO CITY, April 22 (Reuters) - Mexico's biggest retailer, Wal-Mart de Mexico, on Tuesday reported a 4.5 percent slump in first-quarter profit, reflecting weak consumer spending and lower sales at its warehouse division, Sam's Club.

The company, which is controlled by U.S. retailer Wal-Mart Stores Inc, reported a profit of 4.75 billion pesos ($364 million) for the period from January to March, down from 4.971 billion pesos a year earlier.

Walmex reported a 2 percent increase in revenue to 102.62 billion pesos, helped by a pickup in its credit card business.

But sales at stores open at least a year fell 2.4 percent in the first quarter compared to the previous year.

"Walmex's first-quarter results were mixed," said Chief Executive Scot Rank on a brief, recorded conference call that was closed to questions.

"Small-format stores grew very well and we had a solid performance in our Central American operation. Our most important opportunity for improvement is Sam's Club, which is still performing poorly," he added.

Mexico's economy grew more slowly than expected in the first quarter, but consumer confidence in March rose to a four-month high, pointing to stronger domestic spending.

Walmex, which is facing U.S. and Mexican probes into allegations it bribed local officials to open stores faster, has slowed its pace of store openings in the last two years.

The company said it opened 15 new stores in Mexico and Central America in the quarter.

Walmex shares are down 3.7 percent so far this year from 34.26 pesos at the end of 2013. The company said it spent 716 million pesos buying back 23.8 million shares in the first quarter.

The shares closed down 1.37 percent at 33.00 pesos on Tuesday.

($1 = 13.06 pesos) (Reporting by Christine Murray and Elinor Comlay; Editing by Cynthia Osterman)

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