PRICESMART INC Q1 FY2025 earnings call

• Real estate: Purchased land for 9th club in Costa Rica (Cartago) to open spring 2025, finalized land lease for 7th club in Guatemala (Quetzaltenango) to open summer 2025. Remodeled high-volume clubs in Honduras and Dominican Republic, expanded clubs in El Salvador and Jamaica. Developing distribution centers in various markets.
• Membership value: Private label sales 27.7% of total merchandise sales (up 50 basis points). Health services: 53 optical centers, 30 audiology centers, pharmacies to be in most clubs in Costa Rica, Panama, Guatemala, and El Salvador by end of 2025.
• Omnichannel: Digital net merchandise sales up 21.1% to $69.4 million (5.7% of total), orders on app/website up 12.8%, average transaction value up 5.6%. Invested in technology like RELX (to modernize ordering/inventory) and ELERA point-of-sale system.

Net merchandise sales for the first quarter were $1.22 billion. By segment: Central America (30 clubs at quarter-end) had net merchandise sales increase 8.4% or 7% in constant currency, comparable net merchandise sales up 5.1% or 3.7% in constant currency, contributing ~310 basis points to consolidated comparable net merchandise sales growth. Caribbean (14 clubs) had net merchandise sales increase 5.4% or 7.9% in constant currency, comparable net merchandise sales up 5.2% or 7.6% in constant currency, contributing ~150 basis points. Colombia (10 clubs) had net merchandise sales increase 10.7% or 16.1% in constant currency, comparable net merchandise sales up 10.3% or 16.2% in constant currency, contributing ~110 basis points. Merchandise categories: Foods +1.8%, non-foods +10.2%, food services/bakery +7.5%, health services +20.6%. Membership accounts grew 4.8% to over 1.9 million, 12-month renewal rate 87.8%, Platinum accounts 14% of membership.

• Effective tax rate anticipated to be in the range of 27% to 29% for the full fiscal year 2025.
• Comparable net merchandise sales for the four weeks ended December 29, 2024 were up 6.6% or 7.8% in constant currency versus December last year.

• Currency conversion costs: Discrepancies in timing of converting local currencies to USD, with $3.4 million in currency costs in the quarter.
• Local currency in certain regions: At quarter-end, $81 million of cash, cash equivalents, and short-term investments in local currency in Trinidad and Honduras couldn't be readily converted to USD.

Q: About currency conversion cost and Philippines export business A: Michael explained currency conversion cost timing and Robert mentioned efforts to develop export sales despite loss of Philippines business Q: About COGS as percentage of sales A: Robert and Michael discussed factors like exports, currency, and potential margin adjustments for aggressive sales Q: About technology investments A: Robert talked about back-office technology, point-of-sale system implementation, and online business investment needs