Mexico's Walmex reports lower third-quarter profit

MEXICO CITY/MONTERREY - Mexico's biggest retailer, Wal-Mart de Mexico, on Friday said Chief Executive Scot Rank would step down after five years and that the head of Wal-Mart Latin America would take on a bigger role in the Mexico and Central America business.

The company known locally as Walmex also reported an 8 percent fall in third-quarter profit. It said it would hand certain executive responsibilities to Walmex Chairman and Wal-Mart Latin America CEO, Enrique Ostale.

It added it would announce a new Walmex CEO at a later date.

"These changes will allow us to build on the efforts that Scot has made for our company to be more simple, quick and client-focused," Ostale said in a webcast.

The change in leadership comes almost two years after a New York Times investigation that alleged Walmex bribed local officials to open stores faster. The company now faces U.S. and Mexican probes as a result.

Walmex, controlled by U.S. retailer Wal-Mart Stores Inc , has since slowed its pace of expansion.

Last month, Walmex said it was cutting its investment plan for 2014 by 10.7 percent to 13.4 billion pesos ($1.02 billion).

Walmex has also been hit by the Mexican economy's weak growth this year and last.

"Walmex's results have not been good for a few years," said MetAnalisis analyst Gerardo Copca. "That may have been part of the reason for this decision," he said, referring to the CEO.

Despite the weak economy, other retailers, such as supermarket Chedraui, have shown better growth, Copca added.

Walmex blamed its weak third-quarter results on poor performance at its warehouse division Sam's Club and the effects of Hurricane Odile, which battered the state of Baja California Sur in September.

Profit for the period from July to September was 4.871 billion pesos ($363 million), down from 5.295 billion pesos a year earlier.

Revenue rose 4.3 percent to 105.6 billion pesos during the quarter, versus 101.27 billion pesos during the same quarter a year earlier.

Earlier this year the company sold its Vips restaurant chain to franchise operator Alsea (ALSEA.MX) for 8.2 billion pesos.

Walmex shares were down 0.34 percent at 32.53 pesos before the results were announced.