Walmart’s Mexico unit considering ‘strategic alternatives’ in Central America

Men walk past the logo of Walmart outside a store in Monterrey, Mexico February 12, 2018. REUTERS/Daniel Becerril/File Photo

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MEXICO CITY, Jan 24 (Reuters) – Walmart’s Mexico unit is considering “strategic alternatives” to its operations in Central America, including a sale or joint venture, the company said on Monday.

Walmart de Mexico, known locally as Walmex, runs about 860 stores in Central America, making up almost a fourth of its footprint.

The region’s revenue totaled 30 billion pesos ($1.46 billion) in the third quarter of 2021, up 13.9% from the same period a year earlier, according to a company filing.

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Walmex’s operating income in Central America grew 22.4%, and the earnings before interest, taxes, depreciation and amortization increased 14.6%, reaching a 9.1% margin in the same period.

“We think there can be attractive opportunities for greater growth in El Salvador, Honduras and Nicaragua,” the company said in a statement.

“These alternatives could include, but are not limited to, potential joint ventures, partnerships or strategic alliances, a sale, or other transactions,” the company said.

Walmex opened 31 new stores — 28 in Mexico and three in Central America — during the third quarter of 2021.

Sales slid at the retailer’s supermarkets in Central America during severe pandemic lockdown measures, but in the third quarter last year each country logged an increase in same-store sales, led by Honduras.

Walmex in Central America operates discount stores, supermarkets, hypermarkets, warehouse stores and wholesale-price membership stores.

($1 = 20.5800 Mexican pesos)

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Reporting by Mexico City Newsroom; Editing by Daina Beth Solomon and Mark Porter

Our Standards: The Thomson Reuters Trust Principles.

source: reuters.com