MEXICO CITY (Reuters) - Mexico’s largest retailer Walmart de Mexico reported on Thursday that first-quarter net profit rose 3.8 percent in a “challenging” start to the year, falling below market expectations.
Analysts had expected net profit to rise 6.4 percent, according to a Reuters poll.
The company attributed its weaker-than-expected performance to a gasoline shortage in Mexico that slowed shopper traffic, as well as a calendar shift to celebrate the Easter holiday in April rather than March.
Walmart de Mexico’s said its gross margin, a measure of profitability and efficiency, fell in Mexico by 20 basis points to 22.5 percent of profit as a percentage of sales, as its stores offered discounts to turn over inventory and absorbed costs from delays in clothing imports.
The retailer’s net profit was 8.66 billion pesos ($446 million), up from 8.35 billion pesos a year earlier. The quarter generated 151.73 billion pesos in revenue for the company.
Walmart de Mexico opened 12 new stores from January to March, bringing its total to 3,259 locations, mostly in Mexico, which is parent company Walmart Inc.’s largest overseas market by number of stores.
Online shopping grew 49 percent in the quarter, representing 1.1 percent of sales in Mexico.
In Central America, sales fell more than 1 percent and Chief Executive Guilherme Loureiro said in a webcast that growth would resume at a slow pace. Honduras posted revenue growth while sales fell in Nicaragua, Guatemala, Costa Rica and El Salvador.
Reporting by Daina Beth Solomon; editing by Jonathan Oatis and James Dalgleish