What's In The Offing For PriceSmart (PSMT) In Q3 Earnings?
Zacks Investment Research | Jun 30, 2019 09:15PM ET
PriceSmart, Inc. (NASDAQ:PSMT) is slated to report third-quarter fiscal 2019 results on Jul 10. In the last four quarters, this San Diego, CA-based operator of membership shopping warehouse clubs outperformed the Zacks Consensus Estimate by an average of 20.7%. Let’s delve deeper into the factors that are likely to influence the results.
How Are Estimates Shaping Up?
The Zacks Consensus Estimate for earnings for the quarter under review is pegged at 46 cents compared with 61 cents reported in the year-ago quarter. We note that the Zacks Consensus Estimate has remained unchanged in the past 30 days. The Zacks Consensus Estimate for revenues is pegged at $803.8 million, indicating an increase of roughly 2.8% from the year-ago quarter.
Factors Playing Key Role
PriceSmart has been grappling with soft comparable warehouse sales performance for quite some time now. We note that comparable warehouse sales in May fell 0.9%, following a decline of 0.5% in April. The impact of adverse currency fluctuations on comparable warehouse sales cannot be ignored which hurt the metric by 3.9% during the month of May.
Additionally, PriceSmart has been battling cost-related hurdles. During the second quarter of fiscal 2019, warehouse club and other operations expenses increased by 5.2%, while general and administrative expenses surged 23.3%. Persistence of these headwinds remains a threat to margins.
Certainly, PriceSmart’s strategy to sell limited products at lower prices helped it in generating member loyalty. Moreover, this operator of membership warehouse clubs’ healthy membership renewal rate reflects its strength. The company also focuses on increasing the number of private label products. Moreover, the company has been concentrating on adding local and regional distribution centers to augment smooth flow of merchandise. Apart from these, the company is experimenting new small warehouse club format.
What the Zacks Model Unveils
Our proven model does not conclusively show that PriceSmart is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.