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PriceSmart (PSMT) Q4 Earnings & Sales Beat Estimates, Up Y/Y

PriceSmart, Inc.PSMT reversed the preceding quarter's earnings miss of 11.6% with a 4.4% beat in the fourth quarter of fiscal 2018. Notably, this was the first time in the trailing five quarters that this operator of membership warehouse clubs has surpassed expectations. The top line also came ahead of the consensus mark and increased on a year-over-year basis.

Analysts believe that the company's better-than-expected results may provide some cushion to this Zacks Rank #3 (Hold) stock, which has gained a meagre 1.8% compared with the industry 's rally of 10.7% in the past three months.

In the quarter under review, the company posted quarterly earnings of 71 cents a share, which outpaced the Zacks Consensus Estimate of 68 cent and increased around 11% from the prior-year quarter figure.

Including the negative impact of 15 cents on account of results from operations and costs related to the Aeropost buyout and positive impact of 6 cents attributable to U.S. Tax reform, quarterly earnings came in at 62 cents, down couple of cents from the prior-year quarter.

PriceSmart, Inc. Price, Consensus and EPS Surprise

PriceSmart, Inc. Price, Consensus and EPS Surprise | PriceSmart, Inc. Quote

Let's Delve Deep

Total sales climbed 6% to $777.9 million from $733.5 million in the prior-year period. As of August 2018, the company had 41 warehouse clubs in operation compared with 39 clubs in operation as of August 2017. Certainly, the company's strategy to sell limited products at lower prices has helped it to generate member loyalty and higher sales.

While net merchandise sales rose 4.3% year over year to $741.3 million, export sales surged 50.4% to $13.3 million. Meanwhile, membership income increased 6% to $12.9 million. Other revenues and income came in at $10.3 million compared with $1.5 million in the year-ago quarter. Comparable net merchandise sales for warehouse clubs grew 0.2%.

Operating income declined 11.8% to $27.2 million, while operating margin contracted 60 basis points to 3.7%. Operating margins might have been hurt by higher SG&A expenses, as a percentage of total revenues, which came in at 13.5% compared with 12.2% in the year-ago period.

Other Financial Aspects

PriceSmart ended the quarter with cash and cash equivalents of $93.5 million and long-term debt (including current portion) of $102.6 million. The company's shareholders' equity was $758 million, excluding non-controlling interests of $636,000.

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Dollar General Corporation DG has a long-term earnings growth rate of 13.6% and a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Target Corporation TGT has a long-term earnings growth rate of 18.1% and a Zacks Rank #2.

Burlington Stores BURL delivered an average positive earnings surprise of 11.4% in the trailing four quarters. It has a long-term earnings growth rate of 18.1% and a Zacks Rank #2.

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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.


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

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