Mexico's Walmex says second-quarter profit doubles

MEXICO CITY, Mexico - Mexico's biggest retailer, Wal-Mart de Mexico, on Wednesday said its second-quarter profit doubled, driven by the sale of its restaurant business but also helped by a pickup in revenue across its stores.

The company reported a profit of 10.418 billion pesos ($802 million) for the period from April to June, up from 5.147 billion pesos a year earlier.

Walmex sold its Vips chain to restaurant operator Alsea in May for 8.2 billion pesos.

Comparing the results before accounting for the sale of the restaurant business, Walmex had a profit of 5.14 billion pesos, up 2.5 percent from the year-earlier quarter.

Revenue rose 5.6 percent to 104.55 billion pesos.

"The second-quarter results were solid, but still weak," said Chief Financial Officer Rafael Matute on a brief webcast that was not open to questions.

Walmex, which had been struggling to grow sales at stores open at least a year, has launched major price-cutting plans and marketing initiatives that appear to be paying off as consumer spending in Mexico broadly remains weak.

The company's same-store sales have been picking up relative to competitors, Chief Executive Officer Scot Rank said on the webcast, but he added that competitors have also been offering a lot of promotions over the summer, particularly around the World Cup soccer tournament.

"The net result of the World Cup was probably neutral, with solid sales of electronics before the event, but weak sales for the four weeks it lasted as our clients were very involved in the tournament," Rank said.

Mexico's central bank has cut interest rates to a record low of 3 percent, but its board members warned earlier this month that domestic spending "still hasn't shown clear signals of recovery."

Walmex shares closed down 0.32 percent at 34.05 pesos.

$1 = 12.9865 pesos at end June