PriceSmart (PSMT) Witnesses 5.9% Y/Y Decline in March Comps

Zacks Equity Research
·4-min read

PriceSmart, Inc. PSMT reported soft comparable net merchandise sales (comps) for March, after witnessing an increase in the metric in the prior two months. Apparently, comps for the four weeks ended Mar 28, 2021, tumbled 5.9% year over year for 45 warehouse clubs. Comps were hurt by foreign-currency fluctuations to the tune of $4.1 million or 1.4%. We note that comps increased 2.8% each in the preceding two months.

Management notified that last March, comps increased 15.7% as members were stocking up on merchandise in the wake of the pandemic. The coronavirus badly hit the company’s sales in April and May 2020. Nonetheless, the company has been focused on offering a great experience to the members. Encouragingly, its Click & Go service, including curbside pickup and delivery, accounted for nearly 3% of the overall net merchandise sales for March 2021.

Despite the pandemic-led surge in buying last March, net merchandise sales in the month under review inched up 0.5% to $307.6 million from $306.1 million in the year-ago period. However, currency rate fluctuations negatively impacted the metric by $4.4 million or 1.5%.

Encouragingly, fiscal year to date including seven months ended Mar 31, 2021, net merchandise sales rose 4.5% to $2,044.4 million from $1,956.5 million in the year-ago period. Foreign currency fluctuations hurt the metric by 3% or $59.1 million. For the 30-week period ended Mar 28, 2021, comps jumped 1.1% year over year, with foreign-currency fluctuations adversely affecting comps by 3% or $57.3 million.

What’s More?

Recently, PriceSmart reported a stellar performance in second-quarter fiscal 2021. It posted quarterly earnings per share of 92 cents, which jumped 8.2% year over year. Moreover, total revenues for the quarter edged up 3.4% to $937.6 million. We note that net merchandise sales grew 3.1% to $898.4 million. However, currency rate fluctuations negatively impacted net merchandise sales by $27.3 million or 3.2%. Also, comps rose 1.1% in the fiscal second quarter, with foreign currency rate fluctuations hurting the metric by $26.2 million or 3%.

PriceSmart’s quarterly results were buoyed by solid omni-channel efforts to improve service and deliver great convenience to members. Management is encouraged about the Usaquen Club, which is believed to fuel sales, offer greater convenience and strengthen the company’s footprint. It has also launched its first two PriceSmart Pharmacies in Costa Rica and expects launching more PriceSmart Pharmacies by the end of this year. Currently, the company operates 47 warehouse clubs across 12 countries and one U.S. territory.


A glimpse at the company’s price performance reveals that shares of this membership-shopping warehouse club operator have increased 25.9% in the past six months compared with the industry’s 10.5% gain.

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