Wal-Mart de México, S.A.B. de C.V.

Second-quarter consolidated total revenues grew 1.9% reported and 3.2% in constant currency. Mexico total revenues increased 3.1%, while Central America total revenues rose 3.6% in constant currency. Mexico gross margin expanded 10 basis points to 24.1% of total revenues, SG&A was 17.3% of sales, up 20 basis points, and EBITDA margin was 9.6%, flat year over year. Consolidated gross margin was 24.0%, SG&A was 17.4% of sales, EBITDA margin was 9.4%, and net income margin was 4.4%. Central America gross margin contracted 110 basis points to 23.4% and EBITDA margin was 8.4%, down 80 basis points. For the full year, management now expects sales growth of 3.5% to 4.5% in constant currency and EBITDA margin slightly below last year’s level. Cash from operations over the last 12 months was MXN 90.3 billion, working capital provided a net benefit of about MXN 4.9 billion, capex was MXN 39.3 billion, shareholder returns were MXN 38.6 billion, and cash ended at MXN 30.1 billion.

Cristian Barrientos said the quarter reflected a slower-than-expected recovery in consumer demand and that the company’s performance was still below where it wants it to be. He emphasized that Walmex is focusing on what it can control: everyday low prices, availability, omnichannel execution, and ecosystem businesses, while trying to become more relevant across shopping missions. His tone was cautious but constructive, highlighting market share gains, better price perception, improved availability, and the addition of a new e-commerce leader to speed execution.

Paulo Garcia highlighted Mexico’s 3.1% revenue growth, 10 basis points of gross margin expansion to 24.1%, and flat 9.6% EBITDA margin, while Central America’s 3.6% revenue growth came with a 110 basis point gross margin contraction to 23.4% and EBITDA margin of 8.4%. At the consolidated level, he noted gross margin of 24.0%, SG&A at 17.4% of sales, EBITDA margin of 9.4%, and net income margin of 4.4%. He also cited MXN 90.3 billion in operating cash flow, MXN 39.3 billion in capex, MXN 38.6 billion returned to shareholders, and MXN 30.1 billion in cash, and said full-year SG&A growth should still be high single digit in constant terms even as sales guidance was cut.

There was no live analyst Q&A in the transcript, but management preemptively addressed the main concerns: softer consumer demand, weaker traffic and smaller baskets, and the ongoing impact of seller-related issues in marketplace, especially in Central America and Costa Rica. They said Costa Rica remains affected by deflation and trade-down behavior, and that recovery there will depend on improved execution, better price perception, and more private brand penetration. They also explained that marketplace recovery is progressing, but is not yet where they want it to be.