Yahoo Finance PriceSmart's (PSMT) Comps Rise for Fifth Straight Month
PriceSmart, Inc. PSMT comparable warehouse sales (comps) for the four weeks ended Oct 27, 2019 for 41 warehouse clubs increased 1.4%, thereby marking the fifth straight month of comps improvement. This follows an increase of 0.9%, 1.1%, 1.6% and 1.9% in September, August, July and June, respectively. However, foreign currency exchange rate fluctuations adversely impacted comps by 1.9%.
Nevertheless, it seems that management’s efforts are gradually reaping benefits, as the company had witnessed dismal comps performance in the past. Notably, comps in the months of May, April and March had dropped 0.9%, 0.5% and 1%, respectively.
A clear reflection of the company’s endeavors is visible in the stock’s movement on the bourses. In the past three months, shares of this San Diego, CA-based company have gained 28.7% compared with the industry’s growth of 16.1%.
Net merchandise sales for the month of October grew 3.7% to $253.9 million from $244.9 million in the year-ago period. However, the metric was adversely impacted by currency rate fluctuations to the tune of $4.8 million or 1.9%. Prior to this, net merchandise sales had increased 1.2%, 4.5% and 2.8%, in the months of September, August and July, respectively.
PriceSmart’s strategy to sell limited products at low prices helped it gain member loyalty. Moreover, the company’s healthy membership renewal rate reflects its strength. This operator of membership warehouse clubs ended fourth-quarter fiscal 2019 with 1.6 million accounts, while membership income grew 4.2%.
The company has been focusing on adding local and regional distribution centers to augment smooth flow of merchandise. Moreover, it is experimenting with the new small warehouse club format.
Also, PriceSmart declared that it opened a new warehouse club in Panama City, Panama on Oct 24, 2019. This brings the total number of warehouse clubs in operation to 44.
PriceSmart is constructing and plans to open warehouse clubs in San Cristobal, Guatemala, in November 2019. The company is building a new warehouse club in Liberia, Costa Rica and intends to open the same in the summer next year. It is also constructing and plans to open new warehouse clubs in Bogota, Colombia in the fall next year. It plans to build and inaugurate new warehouse clubs in Portmore, Jamaica and Bucaramanga, Colombia in the fall next year.
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