On Thursday, PriceSmart (NASDAQ:PSMT) will release its quarterly report, and investors aren't all that encouraged by what they've seen from the international warehouse store operator. Even as domestic counterparts Costco (NASDAQ:COST) and Wal-Mart (NYSE:WMT) have managed to hold their own from a share-price perspective, PriceSmart has suffered substantial declines, and many shareholders appear to have lost confidence in the company even as its growth prospects remain sizable.

U.S. shoppers are familiar with the warehouse club format that Costco and Wal-Mart's Sam's Club locations offer them. Internationally, PriceSmart uses the same strategy, with stores in Latin America and the Caribbean seeking to use the same membership model to produce profit while offering rock-bottom margins on merchandise. Yet PriceSmart hasn't yet seen the same level of customer loyalty that Costco has, and that could weigh on its future pace of growth. Let's take an early look at what's been happening with PriceSmart over the past quarter and what we're likely to see in its report.

Psmt
Source: PriceSmart.

Stats on PriceSmart

Analyst EPS Estimate

$0.69

Change From Year-Ago EPS

13.1%

Revenue Estimate

$624.46 million

Change From Year-Ago Revenue

9.2%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

Which way will PriceSmart earnings go this quarter?
Investors have had mixed views on PriceSmart earnings recently, reducing their May-quarter estimates by a nickel per share but boosting their full-year fiscal 2015 projections slightly. The stock has focused on PriceSmart's near-term woes, though, falling 18% since early April.

PriceSmart's previous-quarter results show the challenges that the international warehouse store operator faces. From an overall revenue standpoint, PriceSmart had a good quarter, with growth of 11% sending net income up by almost 14%. But many analysts are worried that nearly all of PriceSmart's growth is coming from new store locations, as same-store sales were up only 1.9% in March.

Even with those concerns, though, PriceSmart is using largely the same script that Costco has followed to great success. Membership renewal rates are around 85%, showing that most customers continue to pay annual membership fees that add to PriceSmart's raw profit. The more memberships it can generate, the easier it is for PriceSmart to offer goods at the lowest prices possible, beginning a positive feedback loop.

One issue that PriceSmart has to deal with is the relative political instability in the regions in which it operates. Latin America's economic prospects are substantial, with ample natural resources in many nations enticing potential customers from across the globe. Yet with those growing economies comes the temptation for leaders to twist economic opportunities for their own personal gain, and that risk could endanger PriceSmart's business in those areas if the wrong leader comes into power. Nevertheless, those risks aren't stopping PriceSmart from opening new stores in countries including Colombia and Honduras.

Brazil could be the next fighting ground for PriceSmart. Wal-Mart has entered the Brazilian market, with more than 550 locations in the country, and it has seen reasonably good trends for same-store sales and overall revenue. Right now, PriceSmart doesn't have any Brazilian stores, but some believe that Costco should make a bid for PriceSmart to join forces and coordinate their efforts to capture the South American nation's market.

In the PriceSmart earnings report, watch to see exactly where the company's best results come from. If it appears that newly opened stores are a good path to profits, then PriceSmart could easily keep expanding at a healthy pace for years to come.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends PriceSmart. It recommends and owns shares of Costco Wholesale. 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.