PriceSmart Q1 Profit Rises - Update

(RTTNews) - Discount warehouse club operator PriceSmart Inc. (PSMT), Thursday reported an increase in profit for the first quarter, driven largely by strong warehouse club sales.

Net warehouse club sales, which represents majority of revenues, increased 12.6 percent to $589.7 million from $523.6 million last year. The growth indicates that consumers preference for shopping at warehouse clubs, which are considerably less expensive than other retailers, amidst prevailing economic conditions.

Pricesmart has generated double-digit revenue growth for almost every quarter for last three years. The company operated 32 warehouse clubs as of December 2013 compared to 30 last year.

PriceSmart's total revenues for the quarter grew to $605.6 million from $535.3 million last year. Four analysts polled by Thomson Reuters had a consensus revenue estimate of $609.07 million.

San Diego, California-based PriceSmart's first-quarter profit rose to $21.4 million or $0.71 per share from $20.0 million or $0.66 per share in the same period last year. On average, four analysts expected earnings of $0.74 per share for the quarter. Analysts' estimates typically exclude special items.

For the four weeks ended December 29, 2013, Pricesmart said its comparable warehouse sales for the 29 warehouse clubs open at least 13 1/2 full months increased 6.7 percent. Net sales increased 10.7 percent to $280.8 million for December.

Total operating costs for the quarter rose to $573.2 million from $505.6 million last year.

PriceSmart also said that on Wednesday it acquired about 128,600 usable square feet of land in the southern area of Pereira, Colombia, upon which it plans to construct a new warehouse club that is currently planned to open in November 2014.

PSMT closed Thursday's trading at $107.59, down $2.76 or 2.50%, on the Nasdaq. The stock further dropped $0.70 or 0.65% in after-hours trade.