Walmart (WMT) stock was stronger today after its Mexican arm reported a surge in revenues.
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Walmart de México y Centroamérica revealed a revenue increase of 8.3% in the second quarter and 7.4% for the first half of the year.
E-Commerce Gains
The company said it had made market share gains, had been “competitive on price”, expanded the availability of private brands and had accelerated e-commerce growth.
It reported same-store sales growth of 4.4% in Mexico and 4.0% in Central America for the second quarter. E-commerce gross merchandise value (GMV) saw a significant increase, with Mexico experiencing a 20% growth and Central America a remarkable 49% growth compared to the previous year.
However, it also reported that operating income decreased by 4.0% and net income by 10.3% for the quarter.
This is important given Walmart’s international reach and importance in terms of group revenues.
Looking ahead, Walmart de México y Centroamérica said it remained focused on enhancing its digital capabilities and customer engagement, while “navigating the dynamic retail environment.” It added that it was optimistic about the company’s strategic initiatives and their potential to drive long-term growth.
Mexican Magic
Earlier this year it announced a $6 billion investment to open additional stores across the country. It already has 3,200 stores in operation across nearly 700 municipalities in all 32 Mexican states.
Walmart’s Mexican arm recently revealed record in-store and online sales during Mexico’s Hot Sale, a nine-day promotional period that began in late May. An LSEG poll of analysts forecasts Walmex will post a 9% revenue and 5% profit jump from a year earlier.
Analysts said retailers, such as Walmart, have rolled out strategies inviting consumers to shift habits rather than cut back on purchases. For instance, they have been promoting cheaper store-brand products, offering loyalty programs and using smaller packaging.
However, there are shadows over the Mexican horizon with analysts pointing to the country’s headline inflation rate, which is outside the central bank’s target range of 2% to 4%.
There are also concerns over the potential impact of Trump tariffs.
As can be seen below, macroeconomic uncertainty is a key risk for the stock.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 28 Buy ratings. Its highest price target is $120. WMT stock’s consensus price target is $111.33, implying a 17.20% upside.
