PriceSmart (PSMT, Financial) announced a 7% rise in comparable net merchandise sales for its 54 warehouse clubs that have been operational for more than 13.5 months. This growth pertains to the 13-week period ending on June 1, 2025, compared to the equivalent timeframe in the previous year. The company attributes this gain to strong performance across its established locations.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for Pricesmart Inc (PSMT, Financial) is $105.00 with a high estimate of $120.00 and a low estimate of $95.00. The average target implies an upside of 2.24% from the current price of $102.70. More detailed estimate data can be found on the Pricesmart Inc (PSMT) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, Pricesmart Inc's (PSMT, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Pricesmart Inc (PSMT, Financial) in one year is $103.40, suggesting a upside of 0.68% from the current price of $102.7. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Pricesmart Inc (PSMT) Summary page.
PSMT Key Business Developments
Release Date: April 10, 2025
- Total Revenue: Almost $1.4 billion for Q2 FY2025.
- Net Merchandise Sales: Over $1.3 billion for Q2 FY2025; increased by 5.8% or 7% in constant currency.
- Comparable Net Merchandise Sales: Increased by 6.7% or 7.9% in constant currency for Q2 FY2025.
- Gross Margin: Decreased 10 basis points to 15.6% of net merchandise sales.
- Operating Income: Increased 2.6% to $65.3 million for Q2 FY2025.
- Net Income: $43.8 million or $1.45 per diluted share for Q2 FY2025.
- Membership Accounts: Grew 4.1% to over 1.9 million accounts with a 12-month renewal rate of 87%.
- SGNA Expenses: Increased to 12.4% of total revenues for Q2 FY2025.
- Cash and Short-term Investments: $145.5 million in cash equivalents and restricted cash; $116.9 million in short-term investments.
- Net Cash Provided by Operating Activities: $126.4 million for the first six months of FY2025.
- Store Locations: 55 warehouse clubs in operation; opened 9th club in Costa Rica.
- Digital Sales: Increased 19.3% to $76.2 million, representing 5.7% of total net merchandise sales.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net merchandise sales increased by 5.8% in the second quarter, with a 7% increase in constant currency.
- Membership accounts grew by 4.1% to over 1.9 million, with a 12-month renewal rate of 87%.
- The company opened its 9th warehouse club in Costa Rica, contributing to its expansion strategy.
- Digital channel sales increased by 19.3%, reaching a record high of $76.2 million.
- The effective tax rate decreased to 27.2% from 30.5% a year ago, due to tax optimization initiatives.
Negative Points
- Total gross margins decreased by 10 basis points to 15.6% compared to the previous year.
- SGNA expenses increased to 12.4% of total revenues, primarily due to planned technology investments.
- The company faces challenges from ongoing tariff issues, particularly with products sourced from Asia.
- Average inventory per club increased by 9.4%, leading to higher inventory days on hand.
- Cash equivalents and short-term investments in certain countries are not readily convertible to US dollars, impacting liquidity.
