San Diego-based retail warehouse stores operator,
) recently announced net sales for September 2012. The company
reported 14.1% growth in net sales to $167.0 million for the month,
continuing with its trend of reporting double-digit growth.
PriceSmart reported 10.0% year-over-year increase in comparable
warehouse sales for 28 warehouse clubs for the four weeks ended
September 30, 2012.
The company had previously reported a 12.3% year-over-year increase
in net sales for the month of August 2012. For its third quarter of
2012, PriceSmart reported 17.4% growth in net sales. However, the
company's earnings of 52 cents per share missed the Zacks Consensus
Estimate by 8 cents in the third quarter of 2012.
The company had 29 warehouse clubs in operation at the end of
September 2012, same as the year-ago period.
PriceSmart, which competes with
Family Dollar Stores Inc.
), is involved in the operation of membership shopping warehouses
in international markets. The company sells basic consumer products
of good quality at low 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, which offset low margins and earn profits.
The company is scheduled to release its fourth quarter and fiscal
2012 results on October 30, 2012. The Zacks Consensus
Estimates for the fourth quarter and fiscal 2012 are pegged at 53
cents and $2.21 per share, respectively.
We appreciate the double-digit growth in sales achieved by the
company and we expect the trend to continue owing to the upcoming
holiday season. However, volatile foreign exchange is matter of
concern. PriceSmart carries a Zacks #3 Rank in the near term (Hold
rating). We currently have a Neutral recommendation on the
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