David Hernandez
Long/short equity, medium-term horizon, growth at reasonable price, ETF investing

PriceSmart's Short-Term Issues Present Great Opportunity

Comp Sales

PriceSmart (NASDAQ:PSMT) is a warehouse retailer with locations throughout the Caribbean and Central America. In Q3 2014, PriceSmart reported comparable sales growth of 2.9%. The 2.9% growth rate was significantly below the company's total sales growth of 7.6%. Recently, investors have become worried about the company's slowing growth. This sentiment hasn't been helped by the company's disclosure of June sales figures. Total sales grew 4% but comparable sales only grew 1%. The lackluster growth has investors worried about the company's future growth prospects. However, comparable sales growth is being impacted by two entirely different factors.

PriceSmart's new stores have been cannibalizing older stores. This is causing comparable sales to significantly lag total sales growth. On the ...

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