PriceSmart expectations may be low after last miss
PriceSmart's earnings also come after it badly missed revenue estimates the prior quarter, leading to a 12% one-day plunge in its share price the following day, April 10.
Consensus is for PriceSmart, sometimes called the Costco of Latin America, to report a 13% rise in earnings per share to 69 cents, vs. 61 cents in the same quarter a year ago.
Revenue is projected to grow 8.8% to $621.94 million.
PriceSmart's Q2 EPS rose 13% to 93 cents, topping views for 88 cents. Sales grew 11% to $674.4 million, but analysts expected $675.2 million.
The San Diego company's Q3 earnings come amid rumours that Costco, with about 650 stores in the U.S. and overseas, and five more slated to open this summer, might be interested in buying PriceSmart.
Such a move would greatly expand Costco's footprint in Latin America, where it currently operates just 33 stores.
Neither company owns any stores in Brazil yet. A combination would give them leverage to enter that market and compete with the world's largest retailer Wal-Mart Stores (NYSE:WMT), which owns 556 outlets in Brazil and is expected to get a boost from the month long World Cup, which ends July 13.
Over the last four quarters, PriceSmart has beaten estimates two times and missed two times.
The company's shares were down less than 1% in morning trading in the stock market today, Monday.
Costco was also down fractionally, while Wal-Mart edged up less than 1%.
Source: news.investors.com
