PriceSmart's July Comps Slightly Soft - Analyst Blog


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Retail warehouse stores operator, PriceSmart, Inc . ( PSMT ), recently reported net sales and comparable sales figures for the month of Jul 2013.

Jul 2013 Results

Net warehouse club sales grew 11.9% to $188.5 million for the month. Further, PriceSmart reported 8.9% year-over-year increase in comparable warehouse sales (comps) for 29 warehouse clubs for the four weeks ended Jul 28, 2013. PriceSmart's comps fell slightly short of the 9%+ growth witnessed every month since April this year. Though comps are showing some improving trends from the slow growth witnessed in the first three months of the calendar year, they are still below PriceSmart's past trend of double-digit growth.

PriceSmart is involved in the operation of membership shopping warehouses in international markets. It had 31 warehouse clubs in operation at the end of Jul 2013.

PriceSmart sells good-quality basic consumer products at affordable prices. Slow economic recovery and low employment levels have led the consumers to shy away from high-priced brands. The company has thus, been able to reap the benefits of this recent trend with its lower-priced brands and the private-label merchandise.

Last month, PriceSmart announced mixed fiscal third-quarter 2013 results. While earnings of 61 cents per share missed the Zacks Consensus Estimate of 64 cents by 4.7%, revenues beat the same. We believe that better-than-expected top-line performance was offset by lower gross margins which resulted in the earnings miss.

Other Stocks to Consider

PriceSmart carries a Zacks Rank #3 (Hold). Other stocks in the retail/discount industry that are worth considering include Fred's Inc. ( FRED ), Ross Stores Inc. ( ROST ) and The Gap, Inc. ( GPS ). All these companies carry a Zacks Rank #2 (Buy).

FREDS INC (FRED): Free Stock Analysis Report

GAP INC (GPS): Free Stock Analysis Report

PRICESMART INC (PSMT): Free Stock Analysis Report

ROSS STORES (ROST): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: FRED , GPS , PSMT , ROST

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