PriceSmart’s Q3 earnings fall due to supply chain issues and excess inventory

By Kathryn Hardison

PriceSmart Inc. said its fiscal third-quarter profit fell as the company dealt with continued supply chain disruptions and shifts in consumer demand that left it with excess inventory.

The owner and operator of commercial warehouse clubs in Latin America and the Caribbean said third-quarter net income was $19.3 million, or 62 cents per share, from $22.5 million, or 73 cents a share, a year ago. Analysts polled by FactSet had expected earnings of 80 cents per share.

Revenue rose 15% to $1.03 billion from $895.3 million a year ago. Analysts were expecting $952 million.

Net comparable merchandise sales increased by nearly 13%. Net merchandise sales increased 16.5% to $999 million from $857.5 million a year ago.

Chief Executive Officer Sherry Bahrambeygui said the company is trying to shed excess inventory with price cuts as consumers shift spending away from discretionary products. Many industry retailers are having to stock up on products that were in high demand at the height of the pandemic.

The company also faced supply chain disruptions in the last quarter, such as Asian port closures due to Covid-19, container shortages and higher freight and fuel costs, said Ms. Bahrambeygui.

The San Diego-based company had 50 clubs in operation as of May 31.

Write to Kathryn Hardison at [email protected]