PriceSmart Whiffs on Earnings

PriceSmart (Nasdaq: PSMT  ) reported earnings on Jan. 6. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 30 (Q1), PriceSmart met expectations on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue increased significantly, and earnings per share dropped.

Margins dropped across the board.

Revenue details
PriceSmart logged revenue of $468 million. The five analysts polled by S&P Capital IQ expected a top line of $468 million. Sales were 24% higher than the prior-year quarter's $386 million

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
EPS came in at $0.47. The four earnings estimates compiled by S&P Capital IQ anticipated $0.58 per share. GAAP EPS of $0.47 for Q1 were 6.1% lower than the prior-year quarter's $0.50 per share.

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 15.6%, 130 basis points worse than the prior-year quarter. Operating margin was 5.1%, 80 basis points worse than the prior-year quarter. Net margin was 2.9%, 100 basis points worse than the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $530 million. On the bottom line, the average EPS estimate is $0.72.

Next year's average estimate for revenue is $2.0 billion. The average EPS estimate is $2.57.

Investor Sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 338 members out of 348 rating the stock outperform, and 10 members rating it underperform. Among 85 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 80 give PriceSmart a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on PriceSmart is buy, with an average price target of $74.25.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of PriceSmart. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On January 09, 2012, at 8:17 PM, singulardedicate wrote:

    So is PriceSmart value priced as a result?

    Have they increased prices to consumers to over increased costs?

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11/25/2014 3:59 PM
PSMT $96.05 Down -0.52 -0.54%
PriceSmart CAPS Rating: ****

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