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PriceSmart (PSMT) Displays Decent Sales Performance in July

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PriceSmart, Inc. (PSMT - Free Report) is witnessing decent sales performance. The company’s net merchandise sales rose 2.6% to $248.9 million in July 2018 from the year-ago period. Meanwhile, net merchandise sales jumped 5% to $2,805 million from the year-ago period for the eleven months ended Jul 31, 2018. As of Jul 31, 2018, PriceSmart had 41 warehouse clubs in operation.

Further, comparable merchandise sales for the 39 warehouse clubs increased 0.2% for the four weeks ended Jul 29, 2018. Also, comparable merchandise sales rose 2.6% for the 47-week period ended Jul 29, 2018 compared with the 47-week period a year ago.

Notably, PriceSmart’s comparable-store sales performance exhibited a decent run, increasing 2.7% during the third quarter of fiscal 2018. This was the sixth straight quarter of overall comparable-store sales growth. Notably, the company registered 4.6% jump in transactions and a 0.9% rise in average ticket during the quarter under review. In the second and first quarter of fiscal 2018, comparable-store sales have improved 4.1% and 2.2%, respectively. We note that the metric has increased 1.5% during fiscal 2017.

In the third quarter, net merchandise sales rose 5.6% year over year to $750.5 million, driven by a 4.6% jump in transactions and a 0.9% rise in average ticket, while comparable net merchandise sales registered growth of 2.7%. .

However, we note that so far in the year shares of PriceSmart have not only declined but also underperformed the industry in the past six months. This Zacks Rank #5 (Strong Sell) stock has declined roughly 5.3%, while the industry has advanced 18.1% in the said time frame. Even estimates have been witnessing a downtrend.

The company posted a negative earnings surprise of 11.6% in third-quarter fiscal 2018. This was the fourth time in the trailing five quarters that this operator of membership warehouse clubs has missed expectations. We also note that the bottom-line has been declining for quite some time now, in spite of increase in the top line.

Stocks to Consider

Some better-ranked companies in the retail space includes Kering SA (PPRUY - Free Report) , American Eagle Outfitters Inc. (AEO - Free Report) and Boot Barn Holdings, Inc. (BOOT - Free Report) .

Kering has a long-term earnings growth rate of 12% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

American Eagle Outfitters has a long-term earnings growth rate of 8% and sports a Zacks Rank #2 (Buy).

Boot Barn Holdings has a long-term earnings growth rate of 20.7% and sports a Zacks Rank #2.

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