PriceSmart, Inc. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• New Headquarters: Officially moved into new corporate headquarters in San Diego, which is a meaningful step forward to support the company's culture and mission.
• Club Openings: In August 2025, opened seventh warehouse club in Guatemala; in third quarter of fiscal year 2025, purchased land for sixth warehouse club in Dominican Republic (to open spring 2026); in first quarter of fiscal year 2026, purchased land for third warehouse club in Jamaica (to open summer 2026) and executed land lease for fourth warehouse club in Jamaica (to open fall 2026).
• Supply Chain Transformation: Adapted Panama facility to handle cold merchandise, began operations at new dry distribution center in Guatemala, plan to open PriceSmart run distribution centers in Trinidad and Dominican Republic in fiscal year 2026, implemented third-party distribution centers in China, exploring additional logistics enhancements, introduced own fleet of trucks in select countries, and migrating to RELEX platform with expected finalization in fiscal year 2026.
• Membership Enhancement: Private label sales represented 28.1% of total merchandise sales in fiscal year 2025, renewed and enhanced co-branded consumer credit card in Central America, digital channel sales reached $306.7 million in fiscal year 2025, plan to migrate mobile application to fully native iOS and Android architecture in fiscal year 2026, expect to complete implementation of ELERA point-of-sale system in English-speaking Caribbean markets in first quarter of fiscal year 2026 and roll out in Spanish-speaking markets later, began implementing Workday's human capital management system in first quarter of fiscal year 2026.
• Sales Results: Fourth quarter net merchandise sales and total revenue over $1.3 billion; fiscal year 2025 total net merchandise sales almost $5.2 billion, total revenues almost $5.3 billion; average sales ticket, transactions, average items per basket had certain growth figures.

Segment Performance

• Central America: At quarter end, there were 32 clubs. Fourth quarter net merchandise sales increased 8.9% or 8% in constant currency, with comparable net merchandise sales up 6% or 5.3% in constant currency. Contributed approximately 360 basis points to the growth in total consolidated comparable net merchandise sales for the quarter.
• Caribbean: At quarter end, there were 14 clubs. Fourth quarter net merchandise sales increased 6.3% or 7.5% in constant currency, and comparable net merchandise sales increased 6.5% or 7.8% in constant currency. Contributed approximately 180 basis points to the growth in total consolidated comparable net merchandise sales for the quarter.
• Colombia: At the end of the fourth quarter, there were 10 clubs open. Fourth quarter net merchandise sales increased 18.2% or 18.7% in constant currency, and comparable net merchandise sales increased 18.3% or 18.8% in constant currency. Contributed approximately 210 basis points to the growth in total consolidated comparable net merchandise sales for the quarter.

Guidance

• 2026 Fiscal Year: Begin expansions and remodels at select clubs and parking lots across markets, open PriceSmart run distribution centers in Trinidad and Dominican Republic, finalize migration to RELEX platform, migrate mobile application to fully native iOS and Android architecture, first quarter of 2026 comparable net merchandise sales for 8 weeks ended October 26, 2025, were up 7.2% and 6.5% in constant currency.
• Supply Chain: Plan to open local distribution centers in Trinidad and Dominican Republic, continue with third-party distribution centers in China, leverage mix of PriceSmart managed and third-party operations in multi-club markets.
• Technology: Finalize migration to RELEX platform in fiscal year 2026, migrate mobile application to native architecture in fiscal year 2026, complete implementation of ELERA point-of-sale system in English-speaking Caribbean markets in first quarter of 2026, begin rolling out ELERA in Spanish-speaking markets later in 2026, implement Workday's human capital management system in first quarter of 2026.

Risks

• Hurricane Impact: Impact on team members, members, and operations in Jamaica, Dominican Republic, etc., with operations in Jamaica affected by Hurricane Melissa leading to temporary closure.
• Exchange Rates: Cash, cash equivalents, and short-term investments in local currency in some countries (e.g., Trinidad) that can't readily be converted to U.S. dollars, and U.S. dollar liquidity challenges in Honduras.
• Tax Complexity: Effective tax rate can fluctuate due to operating in many jurisdictions and being calculated on an annual basis, leading to potential differences from projections.
• Remittances: Changes in remittances from the U.S. to certain countries could potentially impact sales performance of stores, as several markets have significant GDP represented by remittances.

Question and Answer

• **Q: Jon Braatz with Kansas City Capital asked about the status of Jamaica stores after the hurricane and if new stores in Trinidad would be smaller.

A: David Price responded that Jamaica stores were undamaged as the storm spared the full brunt, and the intention is to have a typical size club in South Camp Trinidad despite smaller acreage.

• **Q: Hector Maya with Scotiabank asked about Chile expansion timeline and EBITDA margin dynamics.

A: David Price said no opening date information provided yet; Gualberto Hernandez stated no changes in EBITDA margin methodology and no material mix changes impacting EBITDA.

• **Q: Jon Braatz with Kansas City Capital asked about the impact of U.S. remittance changes on store sales performance.

A: David Price said several markets have significant GDP from remittances, but no indication so far of an impact on sales performance from the 1% change in remittances.