Wal mart de Mexico B de C : Results 2Q19 to the MSE

Wal-Mart de México, S.A.B. de C.V.	Consolidated
Ticker:	WALMEX	Quarter: 2 Year: 2019

Quarterly Financial Information

[105000]	Management commentary..................................................................................................................................	2
[110000]	General information about financial statements ...........................................................................................	13
[210000]	Statement of financial position, current/non-current.....................................................................................	15
[310000]	Statement of comprehensive income, profit or loss, by function of expense ...........................................	17
[410000]	Statement of comprehensive income, OCI components presented net of tax.........................................	18
[520000]	Statement of cash flows, indirect method ......................................................................................................	20
[610000]	Statement of changes in equity - Accumulated Current ..............................................................................	22
[610000]	Statement of changes in equity - Accumulated Previous ............................................................................	25
[700000]	Informative data about the Statement of financial position .........................................................................	28
[700002]	Informative data about the Income statement...............................................................................................	29
[700003]	Informative data - Income statement for 12 months.....................................................................................	30
[800001]	Breakdown of credits.........................................................................................................................................	31
[800003]	Annex - Monetary foreign currency position..................................................................................................	33
[800005]	Annex - Distribution of income by product .....................................................................................................	34
[800007]	Annex - Financial derivate instruments ..........................................................................................................	35
[800100]	Notes - Subclassifications of assets, liabilities and equities .......................................................................	39
[800200]	Notes - Analysis of income and expense.......................................................................................................	43
[800500]	Notes - List of notes ..........................................................................................................................................	44
[800600]	Notes - List of accounting policies ..................................................................................................................	66
[813000]	Notes - Interim financial reporting ...................................................................................................................	77

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Wal-Mart de México, S.A.B. de C.V.	Consolidated
Ticker:	WALMEX	Quarter: 2 Year: 2019

[105000] Management commentary

Management commentary [text block]

We are working together as a team and our results are largely driven by the efforts we are doing around our five strategic priorities. Which are:

• To maintain market leading growth
• To continue to build and implement a winning omnichannel strategy
• To drive a strong EDLC mentality, focusing on productivity to reinvest in our business
• To evolve our way of working, innovat ing faster and with data analytics capabilities
• And to inspire and satisfy our associates, developing an enterprise agile culture

We had a great quarter with strong top and bottom line results.

Disclosure of nature of business [text block]

Walmart de México y Centroamérica is a leading retail sector companies in the region .

As of June 30, 2019, it operated 3,291 units in 6 countries (Costa Rica, Guatemala, Honduras, El Salvador, México, and Nicaragua), including self - service stores, membership clubs and omnichannel sales.

Walmart shares trade in the Mexican Stock Exchange since 1977; the ticker symbol is

W ALM EX .

Disclosure of management's objectives and its strategies for meeting those

objectives [text block]

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Wal-Mart de México, S.A.B. de C.V.	Consolidated
Ticker:	WALMEX	Quarter: 2 Year: 2019

The objective of the Company is to double total sales in 10 years and to leverage operating expenses to reinvest in the business.

Sales growth will come from:

• Same store sales
• Sales from new stores
• eCommerce

Disclosure of entity's most significant resources, risks and relationships [text block]

The Company is exposed to the effects of future events that could affect the purchasing power and/or buying habits of the population . These events may be economic, political or social in nature and some of the most important are described below:

I . Changes in exchange rates. Exchange rate fluctuations tend to put upward pressure on inflation and reduce the population's purchasing power, which could ultimately adversely affect the Company's sales, in particular, due to the purchas e of import of goods.

1. . Competition . The retail sector has become very competitive in recent years, which has led to the need for all the players in the market to constantly look for ways to set

themselves apart from the competition. This puts the Company's market share at risk . Other factors affecting the Company's market share could be the business expansion of its competitors and the possible entrance of new competitors into the market .

1. . Inflation . A significant increase in inflation rates could have a dir ect effect on the purchasing power of the Company's customers and the demand for its products and services, as well as employment and salaries.

IV . Changes in government regulations. The Company is exposed to the changes in different laws and regulations, whic h, after becoming effective, they could affect the Company's operating results, such as an impact on sales, expenses for payroll indirect taxes and changes in applicable rates. Currently, the level of scrutiny and discretion by the tax authorities has greatly increased . Mexican legal courts have changed their position favoring those authorities ignoring violations of form and procedure.

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Wal-Mart de México, S.A.B. de C.V.	Consolidated
Ticker:	WALMEX	Quarter: 2 Year: 2019

Disclosure of results of operations and prospects [text block]

Note: The percentages of sales growth related to Central America are determined on a constant currency basis.

During the second quarter, total revenue grew 5.2%: 6.5% in Mexico and 4.9% in Central America .

For the first half of the year, Mexico grew total revenue by 6.1% and Central America by 3.5%, which resulted in 4.9% consolidated revenue growth .

Consistent same - store sales performance in Mexico continues to be our main growth driver.

We saw traffic growth of more than 2% in our stores as well as higher average baskets, which together contributed to the strong same - store sales performance.

During the quarter, same - store sales in Mexico grew 5.4% and 1.7% in Central America .

The two- year stack for same -store sales growth in the first half of the year was 13.3% in Mexico and 4.0% in Central America .

PERFORMANCE BY FORMAT

All regions posted strong growth . The South and North regions had the highest same - store sales growth, followed by the Center and Metro regions, which also delivered solid growth considering the competitive environment in those areas.

Our operations team is doing a great job . They are focused on providing a seamless shopping experience, while managing expenses and inventory in a disciplined way. It is very exciting to see how our customers are responding to the improvements we are maki ng at our stores.

In Sam's, we had our "Open House" event where we invited customers to shop at the clubs and online without a membership so they can see firsthand the exciting merchandise and the value they can find at Sam's Club .

Walmart delivered strong growth on the back of great execution of seasonal programs. By offering a compelling shopping experience and great prices at key events such as Spring Vacations and Mothers' and Fathers' Day, we continue to win our customers' prefe rence.

During the quarter, we reopened the Walmart Villacoapa store in Mexico City. This store had suffered severe damage after the 2017 earthquake, so it was demolished and rebuilt entirely. We reached record high traffic and sales on the week of the op ening, it was very exciting to see our customers coming back to our store.

In Bodega we are focused on providing great value for customers through lower prices, especially within our private brand offerings. During May, we had an event dedicated to private brand merchandise called "Feria de Nuestras Marcas", where we achieved over 30% sales growth .

Our Superama customers continue to prefer our selection of Fresh items that offer great quality at low prices. Easter vacations and the "BBQ Masters" campaign a re examples of

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Wal-Mart de México, S.A.B. de C.V.	Consolidated
Ticker:	WALMEX	Quarter: 2 Year: 2019

how Superama is differentiating itself from competitors by focusing on Fresh departments and developing new in - store events.

In Central America, we are working to make every day easier for busy families. Our focus is not just to save our customers money, but to save them time too.

In line with this, we launched the first store pickup pilot in Guatemala, a service that will allow us to serve customers in ways that are most convenient for them.

To further improve our price positioning, we are redefining the price gap methodology for the Fresh departments and we relaunched our private brands offering .

In terms of sales, we drove same -store sale growth in all the countries, and we widened our gap vs. the market despite a challenging environment .

Honduras delivered the highest growth, followed by Nicaragua and El Salvador. Costa Rica and Guatemala were a bit softer, as a weak macroeconomic environment in the region keeps pressuring customers' budgets and impacting economic conditions in general.

PERFORMANCE BY DIVISION

Food and Consumables had the highest growth followed by Apparel, where sales recovered from the external and weather - related headwinds experienced in the first quarter. General Merchandise was next as it faced a tough comparison ba se from the sales related to the World Cup events last year.

Another highlight of the quarter was the second edition of our omnichannel event, Hot Days. By leveraging our strengths, we were able to take an online event to the physical world, and drive sales across all merchandise divisions.

During the event, we introduced Cashi as a commercial activity tool for the first time. The response from our customers was great . They are really appreciating how we are providing them access to promotions, digital pa yments and services without the need for a bank card .

Remember that Cashi is currently in a minimum viable product phase, which means we are testing different features and learning from our customers' response. We are in the final negotiations with potential financial services partners and we expect to reach an agreement by the end of the year. This would be an important milestone for Cashi, as it will enable features that are key for our customers, such as P2P transfers.

On the 2Q19, we outpaced the sel f- service and clubs segment measured by ANTAD by 110 bps. With this result, we have led the market's growth for 18 consecutive quarters.

We continue to grow the business as we execute our strategic plan .

NEW STORES

During the quarter, we opened 32 new st ores with 24 in Mexico and 8 in Central America . This compares to 30 stores opened during the 2Q18.

New stores contributed 1.8% to total growth, which is within the guidance we shared for the year.

OMNICHANNEL

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