By Sarah Morland and Rafael Escalera Montoto

MEXICO CITY (Reuters) -Walmart’s Mexico and Central America unit, known as Walmex, reported a 7% dip in its first-quarter net profit on Tuesday, coming in below analysts’ expectations

Net profit fell to 12.32 billion pesos ($602.1 million) for the first three months of 2025, short of a 13.10 billion peso forecast from analysts polled by LSEG, even as revenue exceeded forecasts with a 7% jump.

Revenue rose to 240.97 billion pesos, above a 238.57 billion pesos forecast.

Walmex Chief Executive Officer Ignacio Caride said in a video message the quarter was hit by challenging macroeconomic conditions and negative comparative effects, such as the Semana Santa holiday taking place in the second quarter instead of the first.

"Despite the political noise and uncertainty, we are focused on the things we can control," Caride said. "We remain optimistic that we will begin to see a gradual increase in consumption over the rest of the year."

The company reported a 1.4% rise in same-store sales in Mexico and 1.9% growth in Central America. It added 17 stores in Mexico and three in Central America.

"In the coming quarters we should see an increase in revenues that will also allow us to leverage expenses and improve results," Walmex said in a filing, adding it expects capital spending to rise to 41.8 billion pesos this year, compared to the 34.8 billion it spent in 2024.

Expanding its e-commerce capacities would be a key priority for the year, Walmex said, adding that its mobile phone service Bait reached 19.8 million active users and generated some 2.3 billion pesos in revenue during the quarter.

Walmex said it was also preparing for a possible change in Mexico’s labor laws, as the government contemplates reducing the country’s legal working week from 48 hours to 40 hours.

Walmex, which operates Walmart (NYSE: WMT ) and Sam’s Club stores as well as low-cost supermarket chain Bodega Aurrera, is one of Mexico’s largest private employers.