PriceSmart 3Q Beats Estimates On Continued Operating Strength

Singular Research recent sent a note to clients on PriceSmart, Inc.'s (PSMT) 3Q earnings. Key excerpts follow:   

OVERVIEW

PriceSmart’s fiscal Q3:08 results handily beat our estimates as total sales for the quarter rose 23.7%, to $250.4 million. Total warehouse club sales were up 26.5%, to $283.7 million, driven both by stronger traffic and higher average ticket. Membership revenue jumped 15.5%, to $4.1 million as membership increased 11.4% during the quarter, to 583 thousand members, and average membership fees rose approximately 10%. Operating EPS came in at $0.36, far exceeding our $0.26 estimate, as higher sales, SG&A leverage and a lower tax rate drove upside to our model. EPS were also aided by a one time $2 million expense reversal relating to a settlement agreement with RSC, S.A. Overall it appeared to be another solid quarter for the company, with comps remaining above 20% and margins continuing to expand nicely.