PriceSmart Earnings Fall Flat

PriceSmart Inc. (NASDAQ: PSMT) reported its fiscal third-quarter financial results after the markets closed on Thursday. The company said that it had $0.55 in earnings per share (EPS) on $704.3 million in revenue. These results were somewhat mixed when compared to consensus estimates. The long and short of the matter was that the company made the top-line estimates and missed the bottom-line estimates.

In the same period of last year, PriceSmart posted EPS of $0.70 and $697.1 million in revenue.

The company also announced that for the month of June, net warehouse club sales increased 1.8% to $221.1 million, from $217.2 million in the same period of last year. For the 10 months ended June 30, 2016, net warehouse club sales increased 4.2% to $2.36 billion, from $2.26 billion for the 10 months ended in June 2015. There were 38 warehouse clubs in operation at the end of June 2016, up by one from the end of June 2015.

For the four weeks ended June 26, comparable warehouse sales for the 36 warehouse clubs open at least 13.5 full months decreased 1.9%, compared to the same four-week period last year. For the 43 week period ended June 26, comparable warehouse sales decreased 0.9%, compared to the comparable period a year ago.

During this quarter, comparable warehouse sales were negatively affected by the devaluation of the Colombian peso from the year ago period. Six warehouse clubs in Colombia are in the calculation for comparable warehouse sales. Excluding those warehouse clubs, the four-week and 30-week comparable warehouse sales for the other 30 warehouse clubs open at least 13.5 full months decreased 0.1% and increased 2.2%, respectively.

On the books, PriceSmart cash and cash equivalents totaled $202.62 million at the end of the quarter, compared to $157.1 million at the end of the previous fiscal year.

Shares of PriceSmart were trading down more than 9% at $82.77 on Friday, with a consensus analyst price target of $102.00 and a 52-week trading range of $68.51 to $103.59.

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