PriceSmart (NASDAQ:PSMT), Inc. PSMT continued with its soft comparable net merchandise sales (comps) performance during the month of June. Apparently, comps for the four weeks ended Jun 28, 2020 decreased 4.9% for 41 warehouse clubs. Comps were hurt by foreign currency fluctuations to the tune of $7.1 million or 3.1%. This was the third straight month of comps decline. Prior to this, comps had fallen 6.7% and 19.2% in the months of May and April, respectively. However, we note that the rate of decline has decelerated on a sequential basis.
Management highlighted that the company registered sturdy comps performance in Caribbean and Colombian markets. However, comps in Central America were not as strong, owing to the coronavirus cases and related restrictions.
Again, net merchandise sales during the month under review were down 1.5% to $249.2 million from $253.1 million in the year-ago period. Currency-rate fluctuations negatively impacted the metric by $7.8 million or 3.1%. Net merchandise sales had declined 1.9% and 10.9% in the months of May and April, respectively. This San Diego, CA-based company informed that roughly 70 club days were estimated to have been lost on account of closures in the last month, where in-club shopping was not permitted.
Nonetheless, the company’s CEO, Sherry S. Bahrambeygui said "We have seen sequential improvement in net merchandise sales over the past two months despite the increasing impact of the global pandemic in our markets.”
PriceSmart pointed that it is facing challenges owing to the restrictions imposed by the government. This includes temporary club closures, limitations on the operations of clubs, restrictions on segments of the population permitted to shop on particular days, and limits on the number of people that can be in a club at a time.
Undoubtedly, the company has been working to brave such challenges and is evaluating ways for convenient shopping. Impressively, management rolled out the 'Click and Go' contactless online ordering and curbside pickup service to all markets. Sales from this service accounted for 2.7% of total net merchandise sales during the month under review.
Encouragingly, net merchandise sales grew 3.6% to $2,668 million for fiscal year to date, which includes the ten months ended Jun 30. The metric was hurt by foreign currency fluctuations to the tune of $42.2 million or 1.6%. However, comps decreased 1.1% from the year-ago period for the 43-week period ended Jun 28. Foreign currency fluctuations adversely impacted comps by $40.1 million or 1.6%.
Over the past three months, shares of this membership shopping warehouse club operator have declined 9.7% against the industry’s growth of 7.7%.
Key Picks in Retail
Sprouts Farmers (NASDAQ:SFM) Market SFM has a trailing four-quarter positive earnings surprise of 37.2%, on average. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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