Walmart's profit in Mexico rose by 10%

On Thursday, there was a report from analysts. Their estimates showed a 10 percent increase in net income for Walmart's Mexico unit (Walmex) in the third quarter. At the same time, expenses grew faster than revenues because of higher e-commerce and labor costs.

Walmart de Mexico reported earnings of 0.70 pesos per stock. Estimates by Refinitiv showed earnings of 0.69 pesos per stock. The largest retailer in Mexico reported net income of 12.15 billion pesos ($603.8 million).

Pressure on the chain from the government is growing because of attempts to deal with rising prices in Mexican stores. Quarterly earnings increased by 12% compared to the previous quarter, which is also as expected.

Sales increased, especially at the low-cost Bodega stores. But despite this, the company's gross margin remained unchanged at 23.7%. This indicates the higher costs compared to last year.

Chief Financial Officer Paulo Garcia first announced the results and then said the company had invested in its strategic priorities. He was talking about labor costs and e-commerce.

Walmex claimed that last year e-commerce accounted for 4.5% of total sales in Mexico. This year, the figure is 4.8%. The company has also expanded its physical presence, with the opening of 26 new stores.

At the moment, there are conditions of rising inflation. This caused the statement by Walmex to try to keep prices low. Also, the company is working closely with suppliers to review prices.

Mexican President Andres Manuel Lopez Obrador asked Judith McKenoy, head of the international division of Walmart Inc. to apply best efforts for reducing the inflation on food.

Chief Executive Officer Guilherme Loureiro said that current conditions require more attention. He also added that the company has a lot of experience with inflation and a strong team.