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Mexican retailer Comerci 2nd-quarter profit soars on Costco sale
July 25, 2012 / 11:49 PM / 5 years ago

Mexican retailer Comerci 2nd-quarter profit soars on Costco sale

MEXICO CITY, July 25 (Reuters) - Comercial Mexicana on Wednesday said its second-quarter profit soared more than 1,800 percent after the warehouse club operator Costco Wholesale Corp bought out its stake from the Mexican retailer, known locally as Comerci.

In June, Comerci agreed to sell its 50 percent stake in Costco’s Mexico unit for 10.7 billion pesos.

After the sale, Comerci said second-quarter profit climbed to 5.38 billion pesos ($403 million) in the April-June period, up from 278 million pesos in the same period a year earlier.

Without the windfall from the Costco sale, the company said net profit would have been 312 million pesos, up just 12.2 percent from the second quarter in 2011.

The deal with Costco will help Comerci pay down debt.

Comerci, which operates the upscale City Market grocery stores as well as discount stores and restaurants, agreed to a debt restructuring deal with creditors in 2010 after heavy losses on currency derivatives led it to default on obligations in late 2008.

The Mexican retailer also said revenue rose 7.4 percent to 11.5 billion pesos in the second quarter, helped by higher supermarket sales.

$1 = 13.3396 pesos at end June Reporting by Elinor Comlay and Mica Rosenberg; editing by M.D. Golan

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