Wal-Mart De Mexico: 2Q Net Profits Up

MEXICO CITY – Wal-Mart de Mexico SA, the country’s largest retailer, reported a 7 percent increase in second-quarter net profit after inflation, even as same-store sales grew less than 1 percent due in part to a slowdown in consumption.

The company reported net profit of almost 3 billion pesos ($280 million) during the period, compared with nearly 2.8 billion pesos ($260 million) in the same quarter last year.

Walmex – as the Mexican unit of Arkansas-based Wal-Mart Stores Inc. is known – reported a 9 percent increase in total sales after inflation, to 51 billion pesos ($4.7 billion).

Same-store sales refers to sales at stores opened at least a year.

Second-quarter sales were affected by a slowdown in the Mexican and U.S. economies, as well as an absence of positive factors the company took advantage of in 2006, including the presidential elections and the World Cup, Walmex president and CEO Eduardo Solorzano said in a statement.

As a result, Solorzano said, Walmex implemented an “aggressive” cost-reduction program in all areas except consumer service, which held the increase in operating expenses to 6 percent over the same period last year.