Walmex Shares Plunge After Profit Falls 10%

Walmart's Mexico and Central America unit, Walmex, experienced a 6% drop in its shares, resulting in a loss of about $3.25 billion in market value after reporting a 10% decline in second-quarter net profit to 11.23 billion pesos ($600 million), despite an 8% revenue increase. The profit decline was driven by higher-than-expected expenses related to investments in technology, e-commerce, store openings, and labor, which offset sales growth. Walmex's EBITDA margin dropped to 9.5%, the lowest since 2020, reflecting ongoing profitability pressures. Same-store sales grew in both Mexico and Central America, but increased spending to consolidate market share and compete on price dampened overall gains. CEO Ignacio Caride acknowledged dissatisfaction with the results but expressed confidence in the company's long-term strategy and expects stronger performance later in 2025 and into 2026. Analysts emphasize the urgent need for Walmex to restore profitability amid intense competition.