Retail warehouse stores operator PriceSmart,
Inc . ( PSMT ) recently
reported second quarter fiscal 2013 results along with net sales
and comparable sales figures for the month of Mar 2013.
PriceSmart reported adjusted earnings (excluding special items)
of 82 cents per share in the second quarter of fiscal 2013 (ended
Feb 28, 2013), surpassing the Zacks Consensus Estimate of 80 cents
by 2.5%. Earnings grew 22.4% from the prior-year quarter earnings
of 67 cents, as lukewarm revenue growth was offset by operating
The company reported total revenue of $607.4 million in the
second quarter, up 10.8% from the prior-year quarter. Net
warehouse club sales increased 10.1% to $591.9 million in the
quarter. Revenues, however, lagged the Zacks Consensus Estimate of
$614 million. We believe the lesser number of selling days in the
quarter versus last year may have hurt overall top line growth.
The company had 30 operating clubs at the end of Feb 28, 2013
compared with 29 in the prior-year period. Operating income grew
20.5% in the quarter to $36.5 million.
The company has cash and cash equivalents of $101.2 million as
of Feb 28, 2013 compared with $84.4 million as of Nov 30, 2012.
March 2013 Results
Concurrent with second quarter results, PriceSmart also
announced net and comparable warehouse club sales for the month of
March. Net warehouse club sales grew 11.5% to $192.3 million for
the month. Further, PriceSmart reported 7.9% year-over-year
increase in comparable warehouse sales for 29 warehouse clubs for
the four weeks ended Mar 31, 2013.
PriceSmart had previously reported an 8.9% year-over-year
increase in comps and 7.8% top line growth for the month of Feb
2013, much below its trend of reporting double-digit growth. Sales
in the month were hurt by one less selling day in February this
year as the previous year was a leap year.
PriceSmart is involved in the operation of membership shopping
warehouses in international markets. The company sells good-quality
basic consumer products at affordable prices. PriceSmart has been
reaping the benefits of a shift in consumer preference. Consumers
are shifting toward lower-priced brands and private-label
merchandise sold by the company due to slow economic recovery, low
employment level and reduced consumer spending. This business model
helps PriceSmart to consistently generate strong sales, earn
profits and offset low margins.
Other Stocks to Consider
PriceSmart carries a Zacks Rank #4 (Sell). Other stocks in the
retail/discount industry that are worth considering include
Sears Holdings Corporation ( SHLD ) - Zacks Rank #1
(Strong Buy) and Costco Wholesale Corporation ( COST ) - Zacks Rank #2
(Buy). In the broader consumer staples sector, Flower
Foods, Inc ( FLO ) carries Zacks
Rank #1 (Strong Buy).COSTCO WHOLE CP (COST): Free Stock Analysis
ReportFLOWERS FOODS (FLO): Free Stock Analysis ReportPRICESMART INC (PSMT): Free Stock Analysis
ReportSEARS HLDG CP (SHLD): Free Stock Analysis
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