MEXICO CITY — Walmex, Wal-Mart Stores Inc.’s Mexican and Central American unit, saw first-half operating profits rise 6.4 percent to 15.2 billion pesos, or $944 million, on net sales up 9.6 percent to 224.4 billion pesos, or $14 billion, the firm said.
“We are in the middle of the year and I am motivated by the solid performance of our same-unit sales which increased 9.6 percent, 7.2 percent in Mexico and 8.3 percent in Central America,” said Walmex’s chief executive officer Enrique Ostale.
For the second quarter, operating income rose 6.7 percent to 7.8 billion pesos, or $433.7 million, on a 9.9 percent sales hike to 114 billion pesos, or $7 billion.
The results came as Mexico’s retail market is turning the corner after a sluggish 2014, helping Walmex raise turnover at its ailing Sam’s Club division, which dragged down comparable-store sales last year.
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“We are seeing a significant improvement in our Sam’s Club and continued strength in our retail formats in Mexico and Central America,” Ostale added.
He said Walmex performed well in all regions “where we are becoming more relevant to customers, delivering what they want: excellent prices, a very good [merchandise] selection and a consistent execution.”
Apparel sales jumped 8 percent to an undisclosed sum, with a 4.9 percent general-merchandise increase, he said.
Mexican analysts expect Walmex’s revenues to rise 5 percent in 2015, helped by rising consumption on the back of a strengthening economy.
While same-store sales disappointed last year, they said the firm continues to do well, while a 2012 Mexican bribing scandal has had a muted effect.
The case, which sent Walmex’s shares into a tailspin, allowed Wal-Mart to leapfrog in Mexico by allegedly paying Mexican officials to speed up store-building permits.
“The bribing case hasn’t really had a strong impact,” said a Mexico City-based analyst, adding that the ordeal also hasn’t crippled Wal-Mart elsewhere.
The U.S. Securities and Exchange Commission and Department of Justice are leading an inquiry into whether the alleged Mexican payouts violated the Foreign Corrupt Practices Act. Wal-Mart is also investigating its subsidiaries in Brazil, India and China and has launched a 14-step global compliance program to ensure the Mexican ordeal is never repeated.
A Wal-Mart insider confirmed the world’s largest retailer may spend up to $180 million on the case this year, boosting total investment in the incident to nearly $800 million in three years.
“They have invested $600 million since the case began and will invest another $160 million to $180 million for FCPA and other compliance-related activities for the ongoing inquiry,” said the source, who requested anonymity, adding that no fines have been assessed so far.
Wal-Mart has not revealed investment by division but has “done a bunch of things in Mexico” to help pursue the investigation, the source added. They include spending on lawyers and anticorruption officers in a country with one of the world’s worst corruption profiles, analysts said.
A Wal-Mart spokesman said “the investigation is ongoing and it’s inappropriate to comment further on specific allegations.” He said, however, that the firm invested $173 million for the probe last year.