PSMT
$82.34
Pricesmart
$1.25
1.54%
Earnings Details
3rd Quarter May 2016
Thursday, July 07, 2016 4:00:34 PM
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Summary

Pricesmart (PSMT) Recent Earnings

Pricesmart (PSMT) reported 3rd Quarter May 2016 earnings of $0.55 per share on revenue of $704.3 million. The consensus earnings estimate was $0.70 per share on revenue of $723.3 million. Revenue grew 1.0% on a year-over-year basis.

Pricesmart Inc Pricesmart Inc, through its subsidiaries, is engaged in the ownership and operation of membership shopping warehouse clubs under the trade name PriceSmart in Central America and the Caribbean.

Results
Reported Earnings
$0.55
Earnings Whisper
-
Consensus Estimate
$0.70
Reported Revenue
$704.3 Mil
Revenue Estimate
$723.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

PriceSmart Announces Third Quarter Results of Operations and June Sales

SAN DIEGO, CA--(Marketwired - Jul 7, 2016) - PriceSmart, Inc. (PSMT) today announced its results of operations for the third quarter of fiscal year 2016 which ended on May 31, 2016.

For the third quarter of fiscal year 2016, net warehouse club sales increased 1.4% to $684.5 million from $675.3 million in the third quarter of fiscal year 2015. Total revenues for the third quarter of fiscal year 2016 were $704.3 million compared to $697.1 million in the comparable period of the prior year. The Company had 38 warehouse clubs in operation as of May 2016 compared to 36 warehouse clubs in operation as of May 2015.

The Company recorded operating income during the quarter of $27.5 million, as compared to operating income of $33.5 million in the prior year. Net income was $16.8 million, or $0.55 per diluted share, in the third quarter of fiscal year 2016 as compared to $21.2 million, or $0.70 per diluted share, in the third quarter of fiscal year 2015.

For the first nine months of fiscal year 2016, net warehouse club sales increased 4.4% to $2,134.4 million from $2,043.8 million in the first nine months of fiscal year 2015. Total revenues for the first nine months of the fiscal year 2016 increased 4.3% to $2,194.1 million from $2,103.4 million in the same period of the prior year. For the first nine months of fiscal year 2016, the Company recorded operating income of $103.9 million and net income of $66.5 million, or $2.19 per diluted share. During the nine month period in fiscal year 2015, the Company recorded operating income of $111.5 million and net income of $66.7 million, or $2.20 per diluted share.

The Company also announced that for the month of June 2016, net warehouse club sales increased 1.8% to $221.1 million, from $217.2 million in June a year earlier. For the ten months ended June 30, 2016, net warehouse club sales increased 4.2% to $2,355.4 million, from $2,261.0 million for the ten months ended June 30, 2015. There were 38 warehouse clubs in operation at the end of June 2016 and 37 warehouse clubs in operation at the end of June 2015.

For the four weeks ended June 26, 2016, comparable warehouse sales for the 36 warehouse clubs open at least 13 1/2 full months decreased 1.9%, compared to the same four-week period last year. For the forty-three week period ended June 26, 2016, comparable warehouse sales decreased 0.9%, compared to the comparable forty-three week period a year ago.

Comparable warehouse sales were negatively impacted by the devaluation of the Colombian peso from the year ago period. Six warehouse clubs in Colombia are in the calculation for comparable warehouse sales. Excluding those warehouse clubs, the four-week and thirty-week comparable warehouse sales for the other 30 warehouse clubs open at least 13 1/2 full months decreased 0.1% and increased 2.2%, respectively.

PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00a.m. Pacific time) on Friday, July 8, 2016, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (877) 852-6561 toll free, or (719) 325-4765 for international callers and entering participant code 2945542. A digital replay will be available through July 31, 2016, following the conclusion of the call by dialing (888) 203-1112 for domestic callers, or (719) 457-0820 for international callers, and entering replay passcode 2945542.

About PriceSmart

PriceSmart, headquartered in San Diego, owns and operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, selling high quality merchandise at low prices to PriceSmart members. PriceSmart now operates 38 warehouse clubs in 12 countries and one U.S. territory (six each in Costa Rica and Colombia; five in Panama, four in Trinidad; three each in Guatemala, the Dominican Republic and Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, Jamaica and the United States Virgin Islands).

This press release may contain forward-looking statements concerning the Company’s anticipated future revenues and earnings, adequacy of future cash flow, proposed warehouse club openings, the Company’s performance relative to competitors, the outcome of tax proceedings and related matters. These forward-looking statements include, but are not limited to, statements containing the words expect, believe, will, may, should, project, estimate, anticipated, scheduled, and like expressions, and the negative thereof. These forward-looking statements include, but are not limited to, statements containing the words "expect," "believe," "will," "may," "should," "project," "estimate," "anticipated," "scheduled," and like expressions, and the negative thereof. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the following risks: our financial performance is dependent on international operations, which exposes us to various risks; any failure by us to manage our widely dispersed operations could adversely affect our business; we face significant competition; future sales growth depends on our ability to successfully open new warehouse clubs and grow sales in our existing locations; we might not identify in a timely manner or effectively respond to changes in consumer preferences for merchandise, which could adversely affect our relationship with members, demand for our products and market share; although we have begun to offer limited online shopping to our members, our sales could be adversely affected if one or more major international online retailers were to enter our markets or if other competitors were to offer a superior online experience; our profitability is vulnerable to cost increases; we face difficulties in the shipment of and inherent risks in the importation of, merchandise to our warehouse clubs; we are exposed to weather and other natural disaster risks; general economic conditions could adversely impact our business in various respects; we are subject to risks associated with possible changes in our relationships with third parties with which we do business, as well as the performance of such third parties; we rely extensively on computer systems to process transactions, summarize results and manage our business; failure to adequately maintain our systems and disruptions in our systems could harm our business and adversely affect our results of operations; we could be subject to additional tax liabilities; a few of our stockholders own approximately 26.0% of our voting stock as of May 31, 2016, which may make it difficult to complete some corporate transactions without their support and may impede a change in control; failure to attract and retain qualified employees, increases in wage and benefit costs, changes in laws and other labor issues could materially adversely affect our financial performance; we are subject to volatility in foreign currency exchange rates; we face the risk of exposure to product liability claims, a product recall and adverse publicity; any failure to maintain the security of the information relating to our company, members, employees and vendors that we hold, whether as a result of cybersecurity attacks on our information systems, failure of internal controls, employee negligence or malfeasance or otherwise, could damage our reputation with members, employees, vendors and others, could cause us to incur substantial additional costs and to become subject to litigation and could materially adversely affect our operating results; we are subject to payment related risks; changes in accounting standards and assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results of operations; we face increased public company compliance risks and compliance risks related to our international operations; if remediation costs or hazardous substance contamination levels at certain properties for which we maintain financial responsibility exceed management’s current expectations, our financial condition and results of operations could be adversely impacted. The risks described above as well as the other risks detailed in the Company’s U.S. Securities and Exchange Commission ("SEC") reports, including the Company’s Annual Report on Form 10-K filed for the fiscal year ended August 31, 2015 filed on October 29, 2015 pursuant to the Securities Exchange Act of 1934. We assume no obligation and expressly disclaim any duty to update any forward-looking statement to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events.

 
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED -- AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
   
     
     
     
 
 
   
     
     
     
 
 
  Three Months Ended
    Nine Months Ended
 
 
  May 31,
    May 31,
    May 31,
    May 31,
 
 
  2016
    2015
    2016
    2015
 
Revenues:
   
     
     
     
 
Net warehouse club sales
  $
684,547     $
675,314     $
2,134,365     $
2,043,849  
Export sales
    7,091
      9,465
      21,872
      24,126
 
Membership income
    11,475
      11,189
      34,226
      32,202
 
Other income
    1,149
      1,135
      3,661
      3,244
 
Total revenues
    704,262       697,103       2,194,124       2,103,421  
Operating expenses:
     
       
       
       
 
Cost of goods sold:
     
       
       
       
 
Net warehouse club
    590,500       578,868       1,832,183       1,743,772  
Export
    6,742
      8,992
      20,799
      22,953
 
Selling, general and administrative:
     
       
       
       
 
Warehouse club operations
    62,745
      60,754
      188,348
      179,006
 
General and administrative
    16,439
      14,214
      48,086
      41,681
 
Pre-opening expenses
    13
      33
      389
      3,411
 
Loss/(gain) on disposal of assets
    334
      724
      399
      1,087
 
Total operating expenses
    676,773       663,585       2,090,204       1,991,910  
Operating income
    27,489
      33,518
      103,920
      111,511
 
Other income (expense):
     
       
       
       
 
Interest income
    322
      283
      780
      813
 
Interest expense
    (1,571
)
    (1,615
)
    (4,480
)
    (4,759
)
Other income (expense), net
    (222
)
    (311
)
    (1,018
)
    (4,602
)
Total other income (expense)
    (1,471
)
    (1,643
)
    (4,718
)
    (8,548
)
Income before provision for income taxes and income (loss) of unconsolidated affiliates     26,018
      31,875
      99,202
      102,963
 
Provision for income taxes
    (9,168
)
    (10,750 )
    (33,113
)
    (36,378
)
Income (loss) of unconsolidated affiliates
    (13
)
    70
      362
      92
 
Net income
    16,837
    $
21,195
    $
66,451
      66,677
 
Net income per share available for distribution:
     
       
       
       
 
Basic net income per share
  $
0.55
    $
0.70
    $
2.19
    $
2.20
 
Diluted net income per share
  $
0.55
    $
0.70
    $
2.19
    $
2.20
 
Shares used in per share computations:
     
       
       
       
 
Basic
    29,951
      29,883
      29,918
      29,834
 
Diluted
    29,955
      29,888
      29,923
      29,841
 
Dividends per share
  $
--
    $
--
    $
0.70
    $
0.70
 
 
 
 
 
PRICESMART, INC.
 
CONSOLIDATED BALANCE SHEETS
 
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
 
 
   
     
 
 
   
     
 
 
   May 31,
     
 
 
  2016
    August 31,
 
 
  (Unaudited)
    2015
 
ASSETS
   
     
 
Current Assets:
   
     
 
Cash and cash equivalents
  $
202,616
    $
157,072
 
Short-term restricted cash
    518
      61
 
Receivables, net of allowance for doubtful accounts of $0 as of May 31, 2016 and August 31, 2015, respectively
    5,949
      9,662
 
Merchandise inventories
    253,778
      267,175
 
Prepaid expenses and other current assets
    18,030
      22,535
 
Total current assets
    480,891
      456,505
 
Long-term restricted cash
    2,618
      1,464
 
Property and equipment, net
    456,584
      433,040
 
Goodwill
    35,652
      35,871
 
Deferred tax assets
    15,009
      14,845
 
Other non-current assets (includes $3,889 and $4,129 as of May 31, 2016 and August 31, 2015, respectively, for the fair value of derivative instruments)
    48,271
      39,182
 
Investment in unconsolidated affiliates
    10,798
      10,317
 
Total Assets
  $
1,049,823     $
991,224
 
LIABILITIES AND EQUITY
     
       
 
Current Liabilities:
     
       
 
Short-term borrowings
  $
10,127
    $
6,606
 
Accounts payable
    245,096
      241,978
 
Accrued salaries and benefits
    18,502
      17,977
 
Deferred membership income
    21,127
      20,184
 
Income taxes payable
    5,425
      9,595
 
Other accrued expenses (includes $192 and $66 as of May 31, 2016 and August 31, 2015, respectively, for the fair value of foreign currency forward contracts)
    21,910
      23,558
 
Dividends payable
    10,629
      --
 
Long-term debt, current portion
    16,099
      17,169
 
Total current liabilities
    348,915
      337,067
 
Deferred tax liabilities
    1,879
      1,755
 
Long-term portion of deferred rent
    8,817
      6,595
 
Long-term income taxes payable, net of current portion
    1,044
      1,402
 
Long-term debt, net of current portion
    71,462
      73,365
 
Other long-term liabilities (includes $1,684 and $1,699 for the fair value of derivative instruments and $3,791 and $2,757 for post employment plans as of May 31, 2016 and August 31, 2015, respectively)
    5,475
      4,456
 
Total Liabilities
    437,592
      424,640
 
Equity:
     
       
 
Common stock, $0.0001 par value, 45,000,000 shares authorized; 31,214,715 and 30,977,764 shares issued and 30,394,175 and 30,184,584 shares outstanding (net of treasury shares) as of May 31, 2016 and August 31, 2015, respectively     3
      3
 
Additional paid-in capital
    409,979
      403,168
 
Tax benefit from stock-based compensation
    11,290
      10,711
 
Accumulated other comprehensive loss
    (106,431
)
    (101,512 )
Retained earnings
    328,804
      283,611
 
Less: treasury stock at cost; 820,540 shares as of May 31, 2016 and 793,180 shares as of August 31, 2015
    (31,414
)
    (29,397
)
Total Equity
    612,231
      566,584
 
Total Liabilities and Equity
  $
1,049,823     $
991,224
 
 
     
       
 

For further information, please contact John M. Heffner Principal Financial Officer and Principal Accounting Officer (858) 404-8826