PRICESMART INC Q2 FY2025 earnings call

• Robert Price thanked employees and mentioned the opening of the ninth Costa Rica location, noting the building design and efficient operations, and discussed tariff challenges with 50% of products sourced locally/regionally and 30% from US. - Michael McCleary provided financial details: net merchandise sales growth, segment performances, gross margins, revenue margins, SG&A expenses, operating income, tax rate, net income, adjusted EBITDA. - Growth drivers: opened ninth Costa Rica club, plan to open seventh Guatemala club, development of distribution infrastructure including own trucks and DCs in various markets, focus on membership value with private label sales at 27.4% of total merchandise sales, omnichannel shopping with digital sales growth, sustainability efforts with recycling centers and plan to expand.

In the second quarter, net merchandise sales reached over $1.3 billion and total revenue was almost $1.4 billion. Central America: 30 clubs at quarter end, net merchandise sales increased 5.4% or 4.6% in constant currency, comparable net merchandise sales increased 5.6% or 4.9% in constant currency, contributing approximately 340 basis points to consolidated comparable net merchandise sales growth. Caribbean: 14 clubs at quarter end, net merchandise sales increased 6.4% or 8.6% in constant currency, comparable net merchandise sales increased 8.3% or 10.5% in constant currency, contributing approximately 230 basis points. Colombia: 10 clubs open, net merchandise sales increased 6.6% or 16% in constant currency, comparable net merchandise sales increased 8.6% or 17.7% in constant currency, contributing approximately 100 basis points. Merchandise categories: foods grew ~5.3%, non-foods ~7.9%, food services and bakery ~4.7%, health services ~15.5%. Membership accounts grew 4.1% to over 1.9 million, platinum members 14.5% of total membership base.

• Comparable net merchandise sales for the four weeks ended March 30th, 2025 were up 8.7% or 10.2% in constant currency, impacted by Easter holiday timing. - Estimates annualized effective tax rate will be approximately 27% to 29%. - Expect RELEX supply chain and retail planning platform to be substantially operational by end of fiscal 2025, anticipating improved sales and efficiencies.

• Uncertainty surrounding tariffs: US government announced 10% baseline tariff on imported products and individualized reciprocal tariffs, countries may adjust tariffs/restrictions, affecting operations and increasing merchandise costs, negatively impacting member affordability. - International trade landscape creates complexities and cost pressures.

Q: Regarding the tariff situation, some countries' reciprocation of 10% tariffs and sourcing from China avoiding tariffs.

A: Not aware of Central American countries reciprocating 10% tariffs yet. Sourcing from Asia is being consolidated, with distribution centers in Costa Rica, Panama, etc., to facilitate direct shipments and lower costs.

Q: About new store openings in 2026.

A: Don't generally announce before receiving permits, but 10-Q disclosed up to six locations in various stages of due diligence and permitting