PriceSmart, Inc.’s PSMT comparable net merchandise sales (comps) for the five weeks ended Dec 1, 2019 for 41 warehouse clubs increased 0.8%, thereby marking the sixth straight month of comps improvement. This follows an increase of 1.4%, 0.9%, 1.1%, 1.6% and 1.9% in October, September, August, July and June, respectively. However, foreign currency exchange rate fluctuations adversely impacted comps by 0.8%.
For the 13-week period ended Dec 1, 2019, comps improved 1%, compared with the same period last year. However, the metric was adversely impacted by currency rate fluctuations of 1.5%.
Nevertheless, it seems that management’s efforts are gradually reaping benefits. In the past three months, shares of this San Diego, CA-based company have gained 19.1% compared with the industry’s growth of 2.3%.
Net merchandise sales for the month of November grew 7.5% to $278.3 million from $258.9 million in the year-ago period. However, the metric was adversely impacted by currency rate fluctuations to the tune of $2.3 million or 0.8%. Prior to this, net merchandise sales had increased 3.7%, 1.2%, 4.5% and 2.8% in the months of October, September, August and July, respectively.
PriceSmart’s strategy to sell limited products at low prices helped it gain member loyalty. Moreover, the company’s healthy membership renewal rate reflects its strength. This operator of membership warehouse clubs ended fourth-quarter fiscal 2019 with 1.6 million accounts, while membership income grew 4.2%.
The company has been focusing on adding local and regional distribution centers to augment smooth flow of merchandise. Moreover, it is experimenting with the new small warehouse club format.
Also, PriceSmart declared that it opened a new warehouse club in Guatemala City, Guatemala on Nov 12, 2019. This reaches the total number of warehouse clubs in operation to 45. Prior to this, the company had opened a new warehouse club on Oct 24, 2019 in Panama City, Panama.
PriceSmart is constructing warehouse clubs in Liberia and Costa Rica and plans to open the same next summer. It is also constructing warehouse clubs in Bogota, Colombia, which is likely to be opened next fall. It also plans to build and inaugurate warehouse clubs in Portmore, Jamaica and Bucaramanga, Colombia next fall.
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