Walmex Jumps as Profit Surge Signals Vigor of Mexican Shoppers

Wal-Mart de Mexico SAB, the nation’s biggest retailer, climbed after earnings beat analysts’ estimates as shoppers boost spending.

Shares advanced 2.4 percent to 44.35 pesos at 9:42 a.m. in Mexico City, contributing the most to the gain in the IPC stock index, which added 0.3 percent.

The company known as Walmex said late Tuesday that net income rose by about 22 percent last quarter, beating estimates by analysts surveyed by Bloomberg. The company is well-positioned to benefit from the strength of Mexico’s economy, Chief Executive Officer Enrique Ostale said on a conference call with analysts.

“Positive momentum could continue,” Credit Suisse Group AG’s analysts led by Antonio Gonzalez, who have a buy recommendation on Walmex, wrote in a note Wednesday. The results were “very strong,” they wrote, while boosting their share-price estimate by 24 percent to 47 pesos.

Mexico’s retail sales surged by the most in three years in August as a rebound in consumer spending accelerated, according to data from Mexico’s national statistics institute. The lowest inflation rate in almost five decades is boosting purchasing power and helping to prop up the economy even as falling oil output and sluggish manufacturing exports are leading economists to ratchet back their 2015 growth forecasts.

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