PriceSmart, Inc. PSMT witnessed a decline in comparable net merchandise sales (comps) for the second straight month. Apparently, comps for the five weeks ended May 31, fell 6.7% for 41 warehouse clubs, following a decline of 19.2% in April. Comps in May were hurt by foreign currency fluctuations to the tune of $6.7 million or 2.4%.
Net merchandise sales during the month under review declined 1.9% to $246.3 million from $251 million a year ago. The company saw a plunge of 10.9% in the metric during the month of April. Currency-rate fluctuations negatively impacted the metric by $6.1 million or 2.5% in May. During the month under review, the company continued to witness limitations with respect to serving its members owing to closures or other restrictions in the wake of COVID-19. Management informed that many governments across the company’s markets are experimenting relaxation in the restrictions for June.
Moreover, the company has been working to brave such challenges and is evaluating ways for convenient shopping. Impressively, management rolled out the 'Click and Go' program across most of its clubs across 11 of the company’s 13 markets by May-end. The latest program enables consumers to shop and place orders online and then pick up at club. In June, the program is expected to be rolled out in the remaining countries. The company has been boosting online capabilities. In addition, its Assisted Shopping Program provides product information online as well as helps deliver orders quickly. These initiatives are minimizing human-to-human contact and in turn containing the spread of the virus.
Encouragingly, net merchandise sales grew 4.1% to $2,418.8 million for the fiscal till May 31. The metric was hurt by foreign currency fluctuations to the tune of $34.4 million or 1.5%. However, comps decreased 0.7% from the year-ago period for the 39-week period ended May 31. The metric was also hurt by foreign currency fluctuations to the tune of $33 million or 1.4%.
Over the past three months, shares of this membership shopping warehouse club operator have risen 14.3%, outperforming the industry’s rise of 7.4%.
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Office Depot ODP has a long-term earnings growth rate of 6.8%. Currently, it carries a Zacks Rank #2 (Buy).
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PriceSmart Continues to Witness Soft Sales Numbers in May - Yahoo Finance
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