PSMT - PriceSmart stock pushes higher after quarterly profits impress

PriceSmart ( NASDAQ: PSMT ) stock rose sharply on Tuesday after exceeding profit estimates for its fiscal first quarter.

The San Diego-based discount chain posted $1.05 in GAAP earnings per share, $0.16 above estimates. The strong profits appeared to overshadow a narrow miss on the top-line . Comparable merchandise sales jumped 5% year over year while total membership accounts grew 3.9%.

“We continued with strong 12-month renewal rates of 87.9% and our membership income was a record $15.9M, an increase of 7.5% over the same period last year,” CEO Robert Price said. “We believe that these renewal rates demonstrate that our Members remain pleased with the value they are receiving and appreciate the PriceSmart shopping experience.”

Merchandise inventories increased by less than 10% year over year, which management pointed to as a key to margin recovery in 2023.

“The team did a great job of being proactive about selling through overstocked categories and getting back to our core business that has a more standard inventory balance and customary margin structures,” Price said.

Shares of PriceSmart ( PSMT ) rose 5.34% in Tuesday’s trading.

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