Wal-Mart de México (WALMEX) Q1 2025 (Q&A) earnings summary

Executive summary

• Consolidated revenues grew 6.5% year-over-year to MXN 240.98 billion, with growth in both Mexico (+2.9%) and Central America (+3.5% constant currency), despite a negative calendar effect and challenging macro conditions.

• The quarter began with softness in consumption, particularly in food and general merchandise, but commercial actions focusing on price and affordability led to a recovery in traffic and sales by quarter-end.

• Bodega's e-commerce business grew at high double digits, Sam's Club was the best-performing format, and eCommerce Mexico GMV grew 17% year-over-year.

• Gross margin expanded 20 bps to 24.1%, supported by ecosystem initiatives, new business contributions, and logistics improvements.

• Net income decreased 6.6% year-over-year to MXN 12.32 billion, with a net margin of 5.1%.

Financial highlights

• Total revenues reached MXN 240,975 million, up 6.5% from 1Q24, with same-store sales up 1.4% in Mexico and 1.9% in Central America.

• EBITDA rose 1.9% year-over-year to MXN 25.09 billion, with a margin contraction of 50 bps to 10.4%.

• SG&A expenses increased to 16.5% of revenues, reflecting investments in ecosystem development, new stores, and technology.

• Working capital worsened due to higher inventory days, linked to softer sales and slower rotation in general merchandise; plans are in place to normalize inventory levels.

• Net income was MXN 12,317 million, down 6.6% year-over-year.

Outlook and guidance

• Expectation of gradual recovery in consumer demand and sales, with full-year sales growth guidance maintained at 6-7%.

• Management expects a gradual ramp-up in performance for the following quarters, with continued capital investments and focus on improving working capital.

• Q2 anticipated to benefit from Hot Sale, seasonal events, and profit sharing payments, supporting improved general merchandise performance.