February 15, 2018 / 10:05 PM / in 9 months

Mexico's Walmex posts fourth quarter growth despite high inflation

MEXICO CITY (Reuters) - Mexico’s biggest retailer Walmart de Mexico reported fourth-quarter net profit and sales growth on Thursday despite rising inflation last year in Mexico that crimped consumer spending.

FILE PHOTO A cashier smiles beyond a Walmart logo during the kick-off of the 'El Buen Fin' (The Good Weekend) holiday shopping season, at a Walmart store in Monterrey, Mexico, November 17, 2017. REUTERS/Daniel Becerril/File Photo

The company, known as Walmex (WALMEX.MX), said its fourth-quarter net profit rose 1.7 percent over the same quarter last year, boosted by same-store sales across Mexico and Central America.

Its net profit of 10.6 billion pesos ($538 million), was exactly in line with analyst expectations, according to a Reuters poll.

Quarterly revenue rose 6.8 percent from a year earlier to reach 168.2 billion pesos.

Walmex Chief Executive Guilherme Loureiro said in a webcast on Thursday that the company had grown in 2017 despite economic headwinds, natural disasters and temporary store closures in Mexico due to protests over gasoline prices.

He also gave a positive outlook for 2018.

“We expect volatility to continue in the new year, but we’re confident we will continue to generate growth,” he said.

Fourth-quarter sales rose more than 6.0 percent in Mexico and nearly 5.0 percent in Central America. During 2017 Walmex opened 125 new stores while online sales climbed 34 percent.

Walmex posted the healthy sales growth even as annual inflation in Latin America’s second-biggest economy climbed to a 16-1/2 year high in December.

Earlier this month, Mexico’s central bank hiked interest rates, citing increased risks of inflation.

Banorte analyst Valentin Mendoza said Walmex has been able to use its scale to keep prices low despite inflation, getting an edge over competitors.

Walmex shares rose 0.22 percent to 44.95 pesos on Thursday before the results were released.

Reporting by Daina Beth Solomon; Editing by Christine Murray and Leslie Adler

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