PriceSmart, Inc. (NASDAQ:PSMT) delivered fourth-quarter fiscal 2019 results, wherein the bottom line declined but the top line increased year over year. Moreover, comparable net merchandise sales (comps) increased despite foreign currency headwinds.
The company reported quarterly earnings of 67 cents a share, down 5.6% from adjusted figure of 71 cents in the year-ago period.
The prior-year quarterly figure doesn’t include the adverse impact of 15 cents a share pertaining to the results of operations and costs associated with the acquisition of Aeropost. It also excluded the favorable impact of 6 cents a share related to U.S. tax reform. Considering these, the prior-year figure would have been 62 cents a share.
PriceSmart, Inc. Price, Consensus and EPS Surprise
Total revenues grew 3% to $801.3 million from $777.9 million in the prior-year quarter. Net merchandise sales rose 3.7% to $768.9 million, including adverse currency impacts of about 2.7%. While export sales declined 42.3% to $7.7 million, membership income increased 4.2% to $13.4 million. Other revenues and income came in at $11.3 million compared with $10.3 million in the year-ago quarter.
Comparable net merchandise sales for the 41 warehouse clubs increased 1.5%. The metric was adversely impacted by currency rate fluctuations to the tune of $19.9 million or 2.7%.
Operating income declined 17.6% to $32 million, while operating margin contracted 50 basis points to 4%. Operating margins were hurt by higher expenses. Warehouse club and other operations expenses came in at $79.7 million, up 8% from the year-ago quarter.
General and administrative expenses decreased 2.8% to roughly $24.6 million. Pre-opening expenses came in at $967,000, up from $50,000 in the year-ago quarter.
Other Financial Aspects
PriceSmart, which operates 43 warehouse clubs, ended the quarter with cash and cash equivalents of $102.7 million and long-term debt (including current portion) of $89.6 million. The company’s shareholders’ equity was $797.4 million, excluding non-controlling interests.
Notably, shares of this operator of membership warehouse clubs have increased approximately 18% in the past three months against the industry’s growth of 11.4%.
3 Key Picks
Burlington Stores, Inc (NYSE:BURL) currently has a long-term earnings growth rate of 15.9% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dollar General Corporation (NYSE:DG) , a Zacks Rank #2 (Buy) stock, has a long-term earnings growth rate of 9.6%.
Costco Wholesale Corporation (NASDAQ:COST) presently has a long-term earnings growth rate of 8.5% and a Zacks Rank #2.
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