Walmart's margins in Mexico tighten as costs outpace sales growth

MEXICO CITY, Oct 27 — Walmart's Mexico unit missed ​third-quarter profit estimates on Tuesday as rising costs and investments ate into margins, overshadowing double-digit e-commerce growth.

Net profit ‌fell 6% to 11.03 billion pesos ($610 million), below the 12.26 billion pesos expected by ⁠analysts polled by LSEG, ​while revenue also came in ⁠shy of forecasts.

• Mexico's biggest retailer posted total revenue of ‌248.83 billion pesos for ‌the July-September period, up 3% from a year earlier ⁠but below the 250.44 billion ⁠pesos expected by analysts

• Earnings before interest, taxes, depreciation and amortization rose just 0.4% to 25.37 billion pesos, while EBITDA margin narrowed 30 basis points to 10.2%

• The profit pressure came as expenses continued to rise faster than sales; ‌Chief Financial Officer Camilo Canedo attributed the ​increased spending to investments in new stores, e-commerce, technology and staffing

• Walmex reaffirmed its 2026 guidance, forecasting consolidated sales growth of 3.5% to 4.5% in constant currency and an EBITDA margin slightly below last year's level of 10.2%

• Same-store sales rose almost 2% in Mexico, where ticket growth was ​1.6% and traffic was broadly flat

• E-commerce remained a bright spot, ‌with online gross ‌merchandise ⁠value (GMV) up 15% in Mexico and 23% in Central America

• Canedo said 75% of online orders were delivered the same day, up 1,500 basis points from a year earlier, while nearly 30% ‌were delivered in under ​two hours and close to 10% ‌in less than one ⁠hour

($1 = 18.0808 ​pesos at end-September)

(Reporting by Kylie Madry and Natalia Siniawski; Editing by ​Anthony Esposito)

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