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PriceSmart (PSMT) Q4 Earnings & Sales Beat Estimates, Up Y/Y
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PriceSmart, Inc. (PSMT - Free Report) 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
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.
Target Corporation (TGT - Free Report) has a long-term earnings growth rate of 18.1% and a Zacks Rank #2.
Burlington Stores (BURL - Free Report) 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.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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PriceSmart (PSMT) Q4 Earnings & Sales Beat Estimates, Up Y/Y
PriceSmart, Inc. (PSMT - Free Report) 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.
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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.
3 Picks You Can’t Miss
Dollar General Corporation (DG - Free Report) 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 - Free Report) has a long-term earnings growth rate of 18.1% and a Zacks Rank #2.
Burlington Stores (BURL - Free Report) 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.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>