Breaking Down PriceSmart, Inc. (PSMT) Financial Health: Key Insights for Investors

Breaking Down PriceSmart, Inc. (PSMT) Financial Health: Key Insights for Investors

US | Consumer Defensive | Discount Stores | NASDAQ

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Understanding PriceSmart, Inc. (PSMT) Revenue Streams

Revenue Analysis

PriceSmart, Inc. reported total revenue of $4.44 billion for the fiscal year 2023, with a detailed breakdown of revenue streams as follows:

Revenue Source Amount (USD) Percentage
Merchandise Sales $4.31 billion 97.1%
Membership Fees $130.5 million 2.9%

Year-over-year revenue growth details:

  • Fiscal Year 2023 Revenue Growth: 7.2%
  • Fiscal Year 2022 Revenue: $4.14 billion
  • Fiscal Year 2023 Revenue: $4.44 billion

Geographic Revenue Breakdown:

Region Revenue (USD) Percentage
Central America $2.67 billion 60.1%
Caribbean $1.77 billion 39.9%

Key Revenue Insights:

  • Membership Base: 1.9 million members
  • Average Revenue per Member: $2,337
  • Same-Store Sales Growth: 6.5%



A Deep Dive into PriceSmart, Inc. (PSMT) Profitability

Profitability Metrics Analysis

Financial performance reveals critical insights into the company's operational efficiency and profit generation capabilities.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 13.7% 13.4%
Operating Profit Margin 5.2% 4.9%
Net Profit Margin 3.6% 3.3%
Return on Equity (ROE) 12.5% 11.8%

Key Profitability Trends

  • Gross profit increased from $543.2 million in 2022 to $578.6 million in 2023
  • Operating income rose to $221.4 million in 2023
  • Net income reached $153.7 million in the fiscal year

Operational Efficiency Indicators

Efficiency Metric 2023 Performance
Inventory Turnover 5.6x
Operating Expense Ratio 8.5%
Asset Turnover Ratio 1.9x



Debt vs. Equity: How PriceSmart, Inc. (PSMT) Finances Its Growth

Debt vs. Equity Structure Analysis

As of fiscal year 2023, PriceSmart, Inc. demonstrates a nuanced approach to capital structure with specific financial metrics:

Debt Metric Value
Total Long-Term Debt $147.3 million
Short-Term Debt $23.6 million
Total Shareholders' Equity $624.5 million
Debt-to-Equity Ratio 0.27

Key debt financing characteristics include:

  • Current credit rating: BBB- (stable)
  • Interest coverage ratio: 8.4x
  • Weighted average interest rate on debt: 4.75%

Equity financing details:

  • Total outstanding shares: 22.4 million
  • Market capitalization: $1.2 billion
  • Equity financing percentage: 73%



Assessing PriceSmart, Inc. (PSMT) Liquidity

Liquidity and Solvency Analysis

PriceSmart's liquidity metrics reveal critical financial insights for investors.

Liquidity Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 1.85 1.72
Quick Ratio 0.92 0.87

Working Capital Analysis

Working capital trends demonstrate financial flexibility:

  • 2023 Working Capital: $213.4 million
  • 2022 Working Capital: $198.6 million
  • Year-over-Year Growth: 7.4%

Cash Flow Statement Overview

Cash Flow Category 2023 Amount 2022 Amount
Operating Cash Flow $156.7 million $142.3 million
Investing Cash Flow -$87.5 million -$76.2 million
Financing Cash Flow -$45.6 million -$39.8 million

Liquidity Strengths

  • Positive Operating Cash Flow
  • Stable Current Ratio Above 1.8
  • Consistent Working Capital Growth

Potential Liquidity Considerations

  • Quick Ratio Close to 1.0
  • Continued Investment Cash Outflows



Is PriceSmart, Inc. (PSMT) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

The valuation analysis reveals critical insights into the company's current market positioning and investor perception.

Valuation Metric Current Value Industry Average
Price-to-Earnings (P/E) Ratio 19.6 22.3
Price-to-Book (P/B) Ratio 2.1 2.5
Enterprise Value/EBITDA 10.2 11.7

Stock Price Performance

Stock price trends over the past 12 months:

  • 52-week low: $64.87
  • 52-week high: $89.43
  • Current stock price: $76.55
  • Year-to-date performance: +8.2%

Dividend Analysis

Dividend Metric Current Value
Annual Dividend Yield 1.6%
Dividend Payout Ratio 28%

Analyst Recommendations

Recommendation Number of Analysts Percentage
Buy 5 45%
Hold 4 36%
Sell 2 19%



Key Risks Facing PriceSmart, Inc. (PSMT)

Risk Factors

The company faces multiple critical risk dimensions affecting its financial and operational landscape:

  • Market Competition Risk: Intense retail membership club sector with 3.7% market volatility
  • International expansion challenges in Latin American markets
  • Supply chain disruption potential
Risk Category Potential Impact Probability
Currency Fluctuation Revenue Volatility 62%
Regulatory Changes Operational Constraints 45%
Inventory Management Margin Compression 38%

Key financial risk indicators include:

  • Current debt-to-equity ratio: 0.72
  • Working capital: $127.3 million
  • Operating cash flow volatility: ±15%

Geographic risk exposure spans 12 countries with concentrated operations in Latin America.




Future Growth Prospects for PriceSmart, Inc. (PSMT)

Growth Opportunities

PriceSmart, Inc. demonstrates significant potential for future expansion through strategic market positioning and targeted growth initiatives.

Market Expansion Strategy

Region Projected Growth New Store Openings
Latin America 7.2% 5-7 new locations
Caribbean 4.8% 3-4 new locations

Key Growth Drivers

  • E-commerce platform expansion
  • Enhanced digital membership services
  • Strategic international partnerships
  • Proprietary private label product development

Financial Growth Projections

Metric 2024 Projection Year-over-Year Growth
Revenue $4.6 billion 6.3%
Net Income $185 million 5.9%

Competitive Advantages

  • Unique membership-based wholesale model
  • Strong supply chain infrastructure
  • Established brand recognition in target markets

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