The Gory Details of PriceSmart's Earnings Miss

PriceSmart (Nasdaq: PSMT  ) reported earnings on July 9. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 31 (Q3), PriceSmart met expectations on revenue and whiffed on earnings per share.

Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share contracted.

Margins dropped across the board.

Revenue details
PriceSmart tallied revenue of $506.8 million. The six analysts polled by S&P Capital IQ expected to see a top line of $508.4 million on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $429.4 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.52. The six earnings estimates compiled by S&P Capital IQ forecast $0.60 per share. GAAP EPS of $0.52 for Q3 were 3.7% lower than the prior-year quarter's $0.54 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 15.9%, 10 basis points worse than the prior-year quarter. Operating margin was 5.0%, 10 basis points worse than the prior-year quarter. Net margin was 3.1%, 70 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $515.5 million. On the bottom line, the average EPS estimate is $0.59.

Next year's average estimate for revenue is $2.05 billion. The average EPS estimate is $2.33.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 503 members out of 520 rating the stock outperform, and 17 members rating it underperform. Among 117 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 109 give PriceSmart a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on PriceSmart is outperform, with an average price target of $74.75.

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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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