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PriceSmart Continues to Showcase Soft Comps Performance
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PriceSmart, Inc.’s (PSMT - Free Report) comparable-store sales performance have exhibited a dismal run. Comparable merchandise sales for the 39 warehouse clubs decreased 1.3% for the four-week period (ended Oct 28, 2018). The metric also declined 1.5% for the eight-week period (ended Oct 28, 2018) compared with the eight-week period in 2017. In the preceding month, the metric fell 1.7%.
Looking at the quarterly performance, we note that comparable-store sales growth rate has sharply decelerated. The metric inched up 0.2% in the fourth quarter of fiscal 2018, following an increase of 2.7%, 2.2% and 4.1% in each of the preceding three quarters.
PriceSmart reported soft net merchandise sales for October, following a 2.8% increase in the preceding month. Notably, the company’s net merchandise sales in October declined 0.8% to $244.9 million from $246.8 million registered in the year-ago period.
These apart, contraction in operating margin due to higher SG&A expenses is an added concern for PriceSmart. Notably, increase in SG&A is hurting the company’s operating margin, which contracted 60 basis points to 3.7% in the fourth quarter. Rise in SG&A expenses can be attributed to the Aeropost acquisition and the opening of new clubs.
Meanwhile, shares of the company have underperformed the industry in the past three months. This Zacks Rank #4 (Sell) stock has lost roughly 17% compared with the industry’s 3.2% decline. Also, the Zacks Consensus Estimate for fiscal 2019 moved south 50 cents to $2.70 over the past 30 days.
Nevertheless, the company posted a positive earnings surprise of 4.4% in the fourth quarter. The top line also came ahead of the consensus mark and grew on a year-over-year basis. Certainly, PriceSmart’s strategy to sell limited products at lower prices helped it to generate member loyalty and higher sales. As of Oct 31, 2018, PriceSmart had 41 warehouse clubs in operation.
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 20.8% and a Zacks Rank #2.
Target Corporation (TGT - Free Report) has a long-term earnings growth rate of 6.7% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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PriceSmart Continues to Showcase Soft Comps Performance
PriceSmart, Inc.’s (PSMT - Free Report) comparable-store sales performance have exhibited a dismal run. Comparable merchandise sales for the 39 warehouse clubs decreased 1.3% for the four-week period (ended Oct 28, 2018). The metric also declined 1.5% for the eight-week period (ended Oct 28, 2018) compared with the eight-week period in 2017. In the preceding month, the metric fell 1.7%.
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Looking at the quarterly performance, we note that comparable-store sales growth rate has sharply decelerated. The metric inched up 0.2% in the fourth quarter of fiscal 2018, following an increase of 2.7%, 2.2% and 4.1% in each of the preceding three quarters.
PriceSmart reported soft net merchandise sales for October, following a 2.8% increase in the preceding month. Notably, the company’s net merchandise sales in October declined 0.8% to $244.9 million from $246.8 million registered in the year-ago period.
These apart, contraction in operating margin due to higher SG&A expenses is an added concern for PriceSmart. Notably, increase in SG&A is hurting the company’s operating margin, which contracted 60 basis points to 3.7% in the fourth quarter. Rise in SG&A expenses can be attributed to the Aeropost acquisition and the opening of new clubs.
Meanwhile, shares of the company have underperformed the industry in the past three months. This Zacks Rank #4 (Sell) stock has lost roughly 17% compared with the industry’s 3.2% decline. Also, the Zacks Consensus Estimate for fiscal 2019 moved south 50 cents to $2.70 over the past 30 days.
Nevertheless, the company posted a positive earnings surprise of 4.4% in the fourth quarter. The top line also came ahead of the consensus mark and grew on a year-over-year basis. Certainly, PriceSmart’s strategy to sell limited products at lower prices helped it to generate member loyalty and higher sales. As of Oct 31, 2018, PriceSmart had 41 warehouse clubs in operation.
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.
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 20.8% and a Zacks Rank #2.
Target Corporation (TGT - Free Report) has a long-term earnings growth rate of 6.7% and a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>