PriceSmart, Inc - Aggressive Growth

PriceSmart, Inc. (PSMT) shares were roaring thanks to the company's third consecutive earnings surprise. Then yesterday's announcement pushed the stock even higher.

However, rising estimates have been enough to give shares a Zacks #1 Rank (Strong Buy).

Company Description

PriceSmart operates membership warehouse clubs in Central America and the Caribbean, similar to Costco in the U.S. Currently there are over 1 million members and 28 locations.

Monthly Sales Jump

On Dec 7 PriceSmart reported total sales of $132 million for November, a 16% increase. Same-store sales rose an impressive 16%.

In the same press release the company said it acquired space in Colombia to open its 29th location. The newest location should open in mid 2011 and is PriceSmart's first in Colombia.

Solid Earnings History

On Nov 9 PriceSmart reported its third consecutive earnings surprise, with earnings per share coming in at 44 cents. Both EPS from last year and the Zacks Consensus Estimate were 34 cents.

Analysts Like What They See

Analysts polled by Zacks have increased their full-year estimates for fiscal 2011 by 20 cents on average to $1.90, since the quarterly report. Projections for next year are up 44 cents, to $2.18. Given the $1.68 PriceSmart earned in fiscal 2010, the annual growth rates are expected to be 13% and 15%, respectively.

The Chart

Shares of PSMT have been on fire and the recent sales numbers just added fuel to the fire. Thanks to the strong November, don't be surprised to see estimates continue climbing, which is enough to justify an even higher share price.

Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Small Cap Trader service
 
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