Wal-Mart de Mexico SAB, the nation’s biggest retailer, fell the most in almost three years on the Mexico City exchange after JPMorgan Chase & Co. said profit margins probably will be squeezed for the rest of the year.
The company known as Walmex led declines on the benchmark index, falling 4.5 per cent to 37.88 pesos in Mexico City, the biggest loss since August 2012. The IPC lost 1.6 per cent.
Walmex late Tuesday reported adjusted earnings per share of 31 centavos for the second quarter, shy of the 32 centavos average estimate in a Bloomberg survey. JPMorgan analyst Andrea Teixeira wrote in a note to clients that profit margins narrowed as the company made “investments in lower prices to reignite” store traffic.
“Dim earnings growth should disappoint the market,” Teixeira wrote late yesterday. She kept her neutral stance on the stock, saying she was “waiting for a better entry point.”
Bloomberg News, edited by ESM