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PriceSmart (PSMT) Appears Strong on Expansion Strategies
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Shares of PriceSmart, Inc. (PSMT - Free Report) have increased 45.7% in the past three months, thanks to the company’s impressive growth strategies. The growth strategy covers opening warehouse clubs in its existing markets, exploring new markets including South America, and investing in digital transformation and omni-channel capabilities. These factors are expected to continue driving the company’s same-store sales. This membership-shopping warehouse club operator has outperformed the industry’s 15.5% gain and broader Retail-Wholesale sector’s 9.9% growth.
Recently, the company shared plans to progress with the construction of its 48th warehouse club in Guatemala City, Guatemala, and the 49th warehouse club in Portmore, Jamaica. The Guatemala club is likely to be inaugurated in fall next year, whereas the Jamaica one is slated to open its doors in spring 2022. Notably, the latest clubs will be the fifth one in Guatemala and second in Jamaica. The new club in Guatemala will be built on the successful opening and sturdy performance of the fourth club introduced last year. Management further cited that expansion of its business model and warehouse clubs in Jamaica look impressive.
Earlier this month, the company also announced the grand opening of a warehouse club in Bogota, Colombia on Dec 4. We note that expansion via club openings provides growth opportunities via incremental membership, higher net merchandise sales and services, and enhanced shopping experience to members. These openings also boost same-store sales through increasing number of member transactions and higher average ticket.
Now speaking of PriceSmart’s omni-channel endeavors, it is progressing well with the technology-enabled shopping like the Click & Go curbside and delivery service. It remains focused on driving efficiencies across its new sales channels to boost value for members. The company also uses advanced analytics to better understand members and their shopping patterns in order to improve experience. Management believes that Click & Go, coupled with its other online capabilities, will continue to help it efficiently cater to its members in the long run.
Additionally, PriceSmart continues to boost members’ value proposition by expanding its product portfolio and housing more fresh food and offering new services like optical and affinity programs. Moreover, its private label brand recognition is impressive. Also, the company has added the capability for members to have some large ticket products delivered directly from its distribution centers, warehouse clubs, or vendors. Hence, members can order products online and pick up the same at any of its clubs or have products shipped directly to their homes. These product offering are likely to continue in fiscal 2021.
L Brands , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 13%.
Target (TGT - Free Report) has an expected long-term earnings growth rate of 8.5% and currently flaunts a Zacks Rank #2 (Buy).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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PriceSmart (PSMT) Appears Strong on Expansion Strategies
Shares of PriceSmart, Inc. (PSMT - Free Report) have increased 45.7% in the past three months, thanks to the company’s impressive growth strategies. The growth strategy covers opening warehouse clubs in its existing markets, exploring new markets including South America, and investing in digital transformation and omni-channel capabilities. These factors are expected to continue driving the company’s same-store sales. This membership-shopping warehouse club operator has outperformed the industry’s 15.5% gain and broader Retail-Wholesale sector’s 9.9% growth.
Recently, the company shared plans to progress with the construction of its 48th warehouse club in Guatemala City, Guatemala, and the 49th warehouse club in Portmore, Jamaica. The Guatemala club is likely to be inaugurated in fall next year, whereas the Jamaica one is slated to open its doors in spring 2022. Notably, the latest clubs will be the fifth one in Guatemala and second in Jamaica. The new club in Guatemala will be built on the successful opening and sturdy performance of the fourth club introduced last year. Management further cited that expansion of its business model and warehouse clubs in Jamaica look impressive.
Earlier this month, the company also announced the grand opening of a warehouse club in Bogota, Colombia on Dec 4. We note that expansion via club openings provides growth opportunities via incremental membership, higher net merchandise sales and services, and enhanced shopping experience to members. These openings also boost same-store sales through increasing number of member transactions and higher average ticket.
Now speaking of PriceSmart’s omni-channel endeavors, it is progressing well with the technology-enabled shopping like the Click & Go curbside and delivery service. It remains focused on driving efficiencies across its new sales channels to boost value for members. The company also uses advanced analytics to better understand members and their shopping patterns in order to improve experience. Management believes that Click & Go, coupled with its other online capabilities, will continue to help it efficiently cater to its members in the long run.
Additionally, PriceSmart continues to boost members’ value proposition by expanding its product portfolio and housing more fresh food and offering new services like optical and affinity programs. Moreover, its private label brand recognition is impressive. Also, the company has added the capability for members to have some large ticket products delivered directly from its distribution centers, warehouse clubs, or vendors. Hence, members can order products online and pick up the same at any of its clubs or have products shipped directly to their homes. These product offering are likely to continue in fiscal 2021.
Key Picks in Retail
Tapestry (TPR - Free Report) has a long-term earnings growth rate of 10% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
L Brands , also a Zacks Rank #1 stock, has a long-term earnings growth rate of 13%.
Target (TGT - Free Report) has an expected long-term earnings growth rate of 8.5% and currently flaunts a Zacks Rank #2 (Buy).
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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