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Pricesmart (PSMT)
NASDAQ:PSMT
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Pricesmart
(NASDAQ:PSMT)
80Outperform
Pricesmart (PSMT) vs. S&P 500 (SPY)
Market Cap
$2.82B
Dividend Yield1.29%
Average Volume (3M)299.29K
Price to Earnings (P/E)19.6
Beta (1Y)0.45
Revenue Growth8.65%
EPS Growth17.76%
CountryUS
Employees12,000
SectorConsumer Defensive
Sector Strength96
IndustryDiscount Stores
Share Statistics
EPS (TTM)1.45
Shares Outstanding30,754,145
10 Day Avg. Volume312,886
30 Day Avg. Volume299,293
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.51
Price to Cash Flow (P/CF)16.70
P/FCF Ratio16.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$100.00Price Target Upside4.16% Upside
Rating ConsensusHold
Number of Analyst Covering1
Pricesmart Business Overview & Revenue Model
Company DescriptionPriceSmart, Inc. (PSMT) is an American company that operates membership-based warehouse clubs in various countries across Central America, the Caribbean, and Colombia. The company offers a wide range of products, including groceries, electronics, apparel, home goods, and health and beauty products. PriceSmart's business model is similar to that of warehouse clubs in the United States, providing members with access to quality goods at competitive prices through bulk purchasing.
How the Company Makes MoneyPriceSmart makes money primarily through membership fees and the sale of goods in its warehouse clubs. Members pay an annual fee to gain access to the clubs, which provides a steady stream of revenue. Additionally, the company generates income from the sale of a diverse range of products, leveraging its buying power to secure favorable pricing and passing savings onto its members. PriceSmart's revenue model is bolstered by its ability to operate efficiently with low overhead costs and its strategic locations in emerging markets. The company's earnings are further supported by its focus on inventory management, supply chain optimization, and a strong emphasis on customer service.
Pricesmart Financial Statement Overview
Summary
Pricesmart shows strong revenue growth and profitability margins. The balance sheet is stable with low leverage and a high equity ratio. However, there are areas for improvement in net profit margin and ROE, indicating potential inefficiencies.Income Statement
Pricesmart's income statement shows a consistent upward trend in revenue, with a TTM revenue growth of 20.4% from the previous year. The gross profit margin for the TTM period is 37.96%, indicating strong profitability in its core operations. Net profit margin is slightly lower at 2.76%, reflecting some inefficiencies or increased costs. The EBIT margin stands at 4.44%, while the EBITDA margin is 5.61%, showing moderate operational efficiency.80
Positive
Balance Sheet
The balance sheet reveals a solid equity position with an equity ratio of 55.48%, emphasizing financial stability. The debt-to-equity ratio is low at 0.12, indicating low financial leverage. Return on equity (ROE) is modest at 11.93%, suggesting moderate profitability relative to shareholder equity.75
Positive
Cash Flow
Cash flow analysis shows a positive free cash flow growth rate but relatively low free cash flow to net income ratio of 0.30. Operating cash flow to net income is 1.48, demonstrating good cash generation from operations. However, the free cash flow growth is constrained by capital expenditures.70
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.01B | 4.91B | 4.41B | 4.07B | 3.62B | 3.33B | Gross Profit |
| 1.90B | 846.92M | 759.33M | 681.15M | 644.53M | 554.41M | EBIT |
| 222.25M | 220.94M | 184.52M | 99.43M | 90.44M | 62.88M | EBITDA |
| 296.99M | 297.00M | 278.25M | 235.94M | 223.80M | 183.94M | Net Income Common Stockholders |
| 138.26M | 138.88M | 109.20M | 104.53M | 97.96M | 78.11M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 63.05M | 225.53M | 331.06M | 248.87M | 252.29M | 345.99M | Total Assets |
| 530.10M | 2.02B | 2.01B | 1.81B | 1.71B | 1.66B | Total Debt |
| 61.02M | 249.63M | 278.18M | 273.87M | 267.29M | 329.96M | Net Debt |
| -2.03M | 124.26M | 38.19M | 36.16M | 65.23M | 30.48M | Total Liabilities |
| 217.72M | 899.73M | 898.57M | 817.33M | 789.58M | 824.09M | Stockholders Equity |
| 311.52M | 1.12B | 1.11B | 991.07M | 915.35M | 831.72M |
| Cash Flow | Free Cash Flow | ||||
| 41.59M | 39.04M | 114.82M | 1.17M | 13.99M | 158.95M | Operating Cash Flow |
| 205.02M | 207.59M | 257.33M | 121.83M | 127.17M | 259.27M | Investing Cash Flow |
| -174.64M | -175.45M | -222.08M | -74.76M | -116.72M | -131.21M | Financing Cash Flow |
| -93.11M | -150.03M | -41.05M | -12.21M | -95.14M | 75.56M |
Pricesmart Technical Analysis
Positive
96.01
Price Trends
88.40
Positive
89.78
Positive
88.49
Positive
Market Momentum
1.95
Negative
65.93
Neutral
93.56
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSMT, the sentiment is Positive. The current price of 96.01 is above the 20-day moving average (MA) of 88.90, above the 50-day MA of 88.40, and above the 200-day MA of 88.49, indicating a bullish trend. The MACD of 1.95 indicates Negative momentum. The RSI at 65.93 is Neutral, neither overbought nor oversold. The STOCH value of 93.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSMT.
Pricesmart Risk Analysis
Pricesmart disclosed 28 risk factors in its most recent earnings report. Pricesmart reported the most risks in the “Ability to Sell” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Pricesmart Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $2.82B | 19.56 | 12.42% | 1.29% | 8.65% | 17.76% | |
76 Outperform | $6.52B | 32.94 | 12.47% | ― | 8.04% | 10.75% | |
75 Outperform | $15.01B | 28.50 | 32.33% | ― | 2.67% | 2.72% | |
73 Outperform | $47.79B | 19.68 | 26.59% | 1.73% | -1.94% | 23.94% | |
65 Neutral | $20.47B | 18.20 | 15.89% | 2.47% | 4.96% | -32.41% | |
63 Neutral | $9.39B | 14.85 | 4.11% | 187.30% | 3.96% | 6.50% | |
61 Neutral | $17.13B | ― | 18.88% | ― | -9.88% | -205.57% |
* Consumer Defensive Sector Average
Performance Comparison
PSMT
Pricesmart
96.01
15.56
19.34%
DG
Dollar General
96.79
-43.20
-30.86%
DLTR
Dollar Tree
82.16
-40.40
-32.96%
KR
Kroger Company
72.98
18.54
34.06%
OLLI
Ollie's Bargain Outlet Holding
109.74
34.52
45.89%
BJ
Bj's Wholesale Club Holdings
115.06
40.14
53.58%
Pricesmart Earnings Call Summary
Earnings Call Date: Apr 9, 2025 | % Change Since: 11.91% | Next Earnings Date: Jul 9, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a strong performance in terms of revenue growth, membership expansion, and digital sales. However, concerns were raised over decreased gross margins, increased SG&A expenses, and potential impacts from global tariff challenges. The company's strategic investments in infrastructure and technology are expected to address some of these challenges.Highlights
Solid Revenue Growth
Net merchandise sales reached over $1.3 billion in Q2 and total revenue was almost $1.4 billion. For the first half, net merchandise sales were nearly $2.6 billion with total revenue exceeding $2.6 billion. Merchandise sales increased by 5.8% or 7% in constant currency.
Strong Regional Performance
In Colombia, net merchandise sales increased by 6.6% or 16% in constant currency. The Caribbean region saw a 6.4% increase or 8.6% in constant currency.
Membership Growth
Membership accounts grew by 4.1% to over 1.9 million accounts with a 12-month renewal rate of 87%. Platinum membership increased significantly from 9.6% to 14.5% of total membership.
Digital Sales Expansion
Net merchandise sales through digital channels increased by 19.3%, reaching a record high of $76.2 million or 5.7% of total net merchandise sales.
Efficient Cash Flow and Investments
Net cash used in investing activities decreased by $25.8 million, and there was a decrease in property and equipment expenditures by $40.7 million.
Effective Tax Rate Reduction
The effective tax rate decreased to 27.2% from 30.5% a year ago due to tax optimization initiatives.
Lowlights
Decreased Gross Margin
Total gross margins decreased by 10 basis points to 15.6% versus 15.7% in the prior year.
Increased SG&A Expenses
SG&A expenses increased to 12.4% of total revenues compared to 12.2% the previous year, primarily due to planned technology investments.
Tariff Challenges
Ongoing tariff challenges with potential cost pressures due to new US baseline tariffs and reciprocal tariffs from other countries.
Inventory and Cash Conversion Issues
Average inventory per club increased by approximately 9.4%, and inventory days on hand increased by approximately 3.1%.
Company Guidance
During the PriceSmart, Inc. earnings call for the second quarter of fiscal year 2025, several key metrics were highlighted. Net merchandise sales for the quarter reached over $1.3 billion with total revenue nearing $1.4 billion. The company experienced a net merchandise sales growth of 5.8% or 7% in constant currency, while comparable net merchandise sales increased by 6.7% or 7.9% in constant currency. Membership accounts grew by 4.1% to over 1.9 million, with a 12-month renewal rate of 87%. The second quarter also saw a gross margin decrease of 10 basis points to 15.6%, though in dollar terms, total gross margin rose by $10 million, or 5%. Operating income for the quarter increased by 2.6% to $65.3 million, and the effective tax rate dropped to 27.2% from 30.5% a year ago. Adjusted EBITDA reached $87 million, up from $84.1 million in the previous year. Finally, the company is focused on store expansion, with plans to open a new club in Guatemala, and is actively enhancing its supply chain and digital capabilities to support future growth.Pricesmart Corporate Events
Executive/Board Changes
PriceSmart Announces New CEO Appointment for 2025
Positive
Mar 3, 2025
On March 3, 2025, PriceSmart announced that Robert Price will step down as Interim CEO on August 31, 2025, transitioning to Executive Chairman of the Board. David Price, currently the Executive Vice President and Chief Transformation Officer, will assume the role of CEO on September 1, 2025. This leadership transition is expected to ensure continuity and uphold the company’s values, with David Price’s extensive experience within PriceSmart positioning him as a capable successor. The Board of Directors unanimously approved this succession plan, highlighting confidence in David Price’s leadership to continue expanding the business and enhancing shareholder value.
Shareholder MeetingsDividends
PriceSmart Holds Annual Stockholders Meeting, Announces Dividend
Positive
Feb 7, 2025
On February 6, 2025, PriceSmart, Inc. held its Annual Meeting of Stockholders virtually, where several key decisions were made. The Board of Directors was re-elected, the compensation for named executive officers for fiscal year 2024 was approved, and an amendment to the 2013 Equity Incentive Award Plan was sanctioned. Additionally, Ernst & Young LLP was ratified as the company’s independent auditor for the fiscal year ending August 31, 2025. The Board declared an annual cash dividend of $1.26 per share, payable in two installments, reflecting the company’s commitment to providing shareholder value despite economic uncertainties.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.