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PriceSmart's (PSMT) Q1 Earnings & Revenues Increase Y/Y

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PriceSmart, Inc. delivered first-quarter fiscal 2020 results, wherein the top and bottom lines increased year over year. Also, comparable net merchandise sales (comps) increased despite foreign currency headwinds.

The company reported quarterly earnings of 64 cents a share. In the prior-year quarter, it reported earnings of 48 cents a share, which included the negative impact of 13 cents a share from the separation related costs associated with the resignation of its chief executive officer. The increase in bottom line can be attributed to growth in revenues.

Total revenues grew 4.1% to $811.9 million from $779.6 million reported in the prior-year quarter. Net merchandise sales rose 4.2% to $778.7 million, including adverse currency impacts of about 1.6%. Export sales improved 1% to $8.3 million, while membership income increased 7.9% to $13.7 million. Other revenues and income came in at $11.2 million compared with $11.3 million in the year-ago quarter.

PriceSmart, Inc. Price, Consensus and EPS Surprise

Comparable net merchandise sales for the 41 warehouse clubs increased 1%. The metric was adversely impacted by currency rate fluctuations to the tune of $11.3 million or 1.5%.

Warehouse club and other operations expenses came in at $79.4 million, up 6.9% from the year-ago quarter.

General and administrative expenses decreased 5.3% to roughly $25.9 million. Pre-opening expenses came in at $953,000, up from $15,000 in the year-ago quarter.

Other Financial Aspects

PriceSmart, which operates 45 warehouse clubs, ended the quarter with cash and cash equivalents of $111.4 million and long-term debt (including current portion) of $111.8 million. The company’s shareholders’ equity was $816.8 million, excluding non-controlling interests.

Notably, shares of this operator of membership warehouse clubs have increased approximately 20% in the past six months compared with the industry’s growth of 12.4%.

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