PSMT, WDFC, LEVI: Earnings Preview

By Duncan Ferris

Jul 04, 2022

This week's earnings preview looks ahead to updates from PriceSmart, Inc (NASDAQ: PSMT), WD-40 Company (NASDAQ: WDFC) and Levi Strauss & Co (NYSE: LEVI).

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Photo by Claire Abdo on Unsplash - Earnings Preview

North American markets remain deeply troubled, with last week having seen further discouraging economic data releases, including a two-year low in US manufacturing.

Things could bounce back in the week ahead of course. This isn’t the busiest week in the earnings calendar, but there are still plenty of companies offering updates on their latest quarters.

Here are the earnings we are focusing on for the week ahead:

PriceSmart, Inc (NASDAQ: PSMT)

This warehouse retailer operates under a similar model to Costco, though its operations are focused on the Caribbean and Central America.

The business recorded record results in its prior quarter, with net merchandise sales exceeding $1bn for the first time ever.

CEO Sherry S. Bahrambeygui commented at the time:

“The favorable results for the quarter were driven by net merchandise sales growth of 12.6% and comparable net merchandise sales growth of 10.3% as compared to the same period last year. Our 12-month trailing membership renewal rate was a record 89.8%, and our membership base has grown to its all-time high.”

These earnings, released back on 7 April, led to a sharp rise in share price for PriceSmart (NASDAQ: PSMT). Further membership base growth and rises in membership renewal rate would be positive signs for the retailer in its update this week.

PriceSmart’s earnings update is on course to land on Wednesday.

WD-40 Company (NASDAQ: WDFC)

This business, known for its eponymous brand of penetrating oil, will be releasing its third quarter update in the week ahead. 

Earlier this year, in the company’s second quarter earnings, it cut annual net income guidance by 2% due to inflationary pressures, though revenue guidance remained unchanged.

This came as the business reported solid sales growth of 16% for the period, but acknowledged that its gross margin had declined from 55.4% to 50.4% compared to the same period 12 months prior.

In response, company chairman and CEO Gary Ridge had confirmed that the business would seek to boost this margin back above 55% with business management techniques such as price increases. Margin news will be key in the coming update, as well as indications of how customers are responding to price increases.

WD-40 Company (NASDAQ: WDFC) is set to release its earnings update on Thursday after the market close.

Levi Strauss & Co (NYSE: LEVI)

Perhaps the biggest name in denim, this company is hoping that consumers have not yet decided to skimp on their clothing purchases as it prepares to unleash its second quarter earnings update.

How the company’s sales figures hold up is key in the period ahead. The business faces a number of pressures here, including inflation and general economic difficulties around the globe. Additionally, margins could show some pressure in the next update, having climbed significantly in the 12 months ended February 2022.

Its most recent earnings, released back in April, beat expectations and showed more than 20% year-on-year revenue growth and strong demand being led by the US market. Perhaps Levi Strauss (NYSE: LEVI) will return strong growth once again.

Look out for the fashion company’s earnings after market close on Thursday.

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Important Notice And Disclaimer

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.