By Kristin Jones
PriceSmart Inc.'s (PSMT) fiscal third-quarter earnings fell 3.6% as expenses jumped, masking the discount store operator's continued increase in revenue.
Shares fell 6.5% to $58.95 in after-hours trading as results missed expectations. Through Monday's close, the stock was down 9.4% this year.
PriceSmart, which is based in California, operates warehouse shopping clubs mostly in Central America and the Caribbean. Like other club stores, including peer Costco Wholesale Corp. (COST), the company has struggled with rising costs for merchandise. In recent quarters, PriceSmart has reported wavering profits even as sales have soared.
For the quarter ended May 31, the company reported a profit of $15.7 million, or 52 cents a share, down from $16.3 million, or 55 cents a share, a year earlier. The latest quarter included a loss from foreign exchange transactions of $449,000, compared with a $1.2 million gain the previous year.
Revenue leapt 18% to $506.8 million.
Analysts polled by Thomson Reuters recently expected per-share income of 59 cents on revenue of $511 million.
Net warehouse club sales--the source of most of PriceSmart's revenue--jumped 17%, with help from an additional warehouse club in Barranquilla, Colombia. Membership income increased 19%.
Total operating expenses grew 18% from a year earlier, with a 19% increase in expenses from warehouse club operations.
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