By Daina Beth Solomon
MEXICO CITY (Reuters) – Walmart’s Mexico unit reported a 15.4% jump in quarterly profit on Tuesday, meeting analysts’ expectations of strong results due to a surge in shopping triggered by the coronavirus pandemic.
Walmart de Mexico, the biggest retailer in Mexico, reported a first-quarter net profit of 10 billion pesos ($420 million), up from 8.7 billion pesos a year earlier.
Chief Executive Guilherme Loureiro said in a webcast that the results reflected high demand for essential goods in an emergency period that was not part of the “ordinary course” of business, and led to 20,500 new hires.
“When this situation finishes, we will face other challenges, so this should not be taken into account to forecast our future performance,” Loureiro said.
The company, also known as Walmex, reported revenue of 171.3 billion pesos in the period, up from 151.7 billion pesos a year ago.
Mexico registered its first cases of COVID-19 – the illness caused by the highly contagious coronavirus – at the end of February, triggering a spate of panic buying nationwide in parent company Walmart Inc’s largest overseas market by store count.
The Mexican government has since urged people to stay at home as much as possible to contain the spread of the virus.
Walmart de Mexico said e-commerce sales grew 68% in the quarter as daily orders doubled, and the retailer added more than 1,700 workers to handle the demand.
Even so, e-commerce now represents 1.6% of total sales in Mexico, down from 2% in the fourth quarter last year.
Walmart de Mexico’s total sales reflect the opening of nine stores in the quarter, bringing the total to 3,416 locations.
The retailer warned that its typical pace of openings may slow due to social distancing measures that limit construction and difficulties obtaining permits.
In Central America, the retailer registered growth in all markets except Honduras, where the government ordered stores closed to prevent the spread of the coronavirus.
($1 = 23.7980 pesos at end-March)
(Reporting by Daina Beth Solomon; Editing by Anthony Esposito, David Gregorio and Bill Berkrot)