Earnings Preview: PriceSmart Inc.

| About: PriceSmart, Inc. (PSMT)

PriceSmart, Inc. (NASDAQ:PSMT) owns and operates membership shopping warehouse clubs in the United States, Latin America, and the Caribbean. Its warehouse clubs sell perishable foods and consumer goods at low prices to individuals and businesses, as well as offer ancillary services, including food courts, tire centers, and photo centers.

It is scheduled to report its Q3 2012 results on July 9, 2012, after the bell.

Technical Overview


The stock has a market capitalization of $2.04 billion, and is currently trading at $67.51 with a 52 week range of $51.37 - $84.32. The stock performance year to date: -2.58%. It is currently trading above 20 SMA, but below 50 and 200SMA.

Key Metrics

  • Trailing P/E: 32.15
  • Forward P/E: 23.60
  • Price/Sales: 1.05
  • Price/Book: 5.23
  • PEG Ratio: 1.84
  • Total Debt: 86.01M
  • Annual dividend yield: 0.90%
  • Return on Equity: 17.25%
  • Return on Assets: 9.19%

Recent EPS Actuals vs. Estimates

The company has failed to meet analysts' estimates in the last three quarters. In the last quarter, PriceSmart reported $0.67 EPS, failing to meet analysts' estimates of $0.69.

The consensus EPS is $0.60 based on 5 analysts' estimates, up from $0.55 a year ago. Revenue estimates are $510.68 million, up from $431.15 million a year ago. Analysts' median target price for the stock is $83.50.

Average recommendation: Overweight

Source: Marketwatch

Latest Developments

  • On March 19, 2012, PriceSmart, Inc. announced that on March 15, 2012 it acquired approximately 12,000 square meters of land in North Cali, Colombia, upon which it intends to construct and operate a new PriceSmart Warehouse Club, which would be its third in Colombia.
  • On February 10, 2012, PriceSmart, Inc. announced that on January 9, 2012 it entered into an agreement to acquire approximately 16,038 square meters of property located in La Union, Cartago, Costa Rica, upon which PriceSmart anticipates constructing its sixth Membership Warehouse Club in Costa Rica.

Competitors

PriceSmart Inc. operates in the discount, variety stores industry. The company could be compared to Costco Wholesale Corporation (NASDAQ:COST), Dillard's Inc. (NYSE:DDS), Fred's, Inc. (NASDAQ:FRED), and Wal-Mart (NYSE:WMT). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one year period.

click image to enlarge

PSMT ChartClick to enlarge

PSMT data by YCharts

Competitors' Latest Developments

  • On June 15, 2012, Controladora Comercial Mexicana SAB de CV announced that it has reached an agreement to sell its entire stake in Costco de Mexico SA de CV to Costco Wholesale Corp at a total value of MXN 10,650 million.
  • On June 12, 2012, The Economic Times reported that Wal-Mart plans to break ties with companies that supply products to its stores if they are involved in any kind of corrupt practices, making it the first retail company to undertake such a stringent initiative in India.
  • On June 11, 2012, Reuters reported that New York City's pension funds became the latest group to file a derivative lawsuit against Wal-Mart based on reported allegations of bribery in Mexico and a possible cover-up by Wal-Mart officials.
  • On May 24, 2012, Fred's Inc. announced that for the second quarter of 2012, it expects total sales to increase in the range of 4% to 6%, comparable store sales to be approximately flat versus a decrease of 0.4%.
  • On May 23, 2012, Dillard's, Inc announced that the Board of Directors declared a cash dividend of $0.05 per share on the Class A and Class B Common Stock of the Company payable August 1, 2012 to shareholders of record as of June 29, 2012.
  • On May 18, 2012, Fred's Inc. announced that its Board of Directors has declared a quarterly cash dividend of $0.06 per share. The dividend is payable on June 15, 2012, to shareholders of record as of June 1, 2012.
  • On May 17, 2012, Wal-Mart announced that for second quarter of 2013, it expects diluted earnings per share (NYSEARCA:EPS) from continuing operations to range between $1.13 and $1.18.
  • On May 8, 2012, Robbins Geller Rudman & Dowd LLP announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Middle District of Tennessee on behalf of purchasers of Wal-Mart.
  • On May 3, 2012, Fred's Inc. announced that for the first quarter of 2012, it expects earnings per diluted share to be in the range from $0.26 to $0.28.
  • On May 2, 2012, Reuters reported that Wal-Mart has agreed to pay $4.8 million in back wages and damages to thousands of employees for unpaid overtime after a probe by the U.S.
  • On April 25, 2012, Newman Ferrara LLP announced that it has begun an investigation into whether certain officers and directors of Wal-Mart violated the Foreign Corrupt Practices Act in connection with alleged bribery payments at the company's Mexican subsidiary.
  • On April 25, 2012, Law Offices of Howard G. Smith announced that it is investigating potential claims on behalf of shareholders of Wal-Mart concerning possible breaches of fiduciary duties by the company or its fiduciaries.
  • On April 23, 2012, Wal-Mart announced that Kendall Law Group, a national securities firm led by a former federal judge with attorneys that include a former U.S. Attorney, is investigating the company. The investigation concerns violations of the Foreign Corrupt Practices Act by certain Wal-Mart officers and directors y.
  • On April 23, 2012, Shareholder Rights Law Firm Johnson & Weaver, LLP announced that it is investigating whether certain officers and directors of Wal-Mart Stores breached their fiduciary duties and committed violations of the Foreign Corrupt Practices Act ("FCPA").
  • On April 23, 2012, Former United States Securities and Exchange Commission attorney Willie Briscoe, founder of The Briscoe Law Firm, PLLC, and the securities litigation firm of Powers Taylor, LLP announced that the firms are investigating legal claims against the officers and Board of Directors of Wal-Mart for potential breaches of fiduciary duties and violations of the Foreign Corrupt Practices Act (OTCPK:FCPA).
  • On March 21, 2012, Fred's Inc. announced that for first quarter of 2012, it expects sales to increase in the range of 3% to 5%. Comparable store sales to be approximately flat compared to an increase of 1% in the first quarter last year.
  • On February 16, 2012, Fred's Inc. announced that the Board of Directors has increased the company's quarterly cash dividend 20% to $0.06 per share from the previous rate of $0.05 per share.
  • On February 2, 2012, Fred's Inc. announced that fourth quarter of 2011, it still anticipates earnings to be at the low end to midpoint of projected range of $0.23 to $.027 per diluted share, reflecting an offsetting benefit from ongoing control of expenses.
  • On January 5, 2012, Fred's Inc. announced that for the fourth quarter of 2011, it expects earnings to be at the low to midpoint of the projected range $0.23 to $.027 per diluted share.

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.