PriceSmart, Inc. Q1 FY2026 earnings call

Management Statement and Operational Highlights

• Employee Gratitude: Appreciation for employees' performance during peak season; teams across regions contributed to success.
• Sales Results: Net merchandise sales reached almost $1.4 billion; comparable net merchandise sales up 8%/6.9% in constant currency; average sales ticket up 2.1%, transactions up 8.4%.
• Membership Growth: Membership accounts grew 6.7% to over 2 million; Platinum memberships increased to 19.3% of total; 12-month renewal rate 89.3%.
• Real Estate Expansion: New clubs planned in Dominican Republic, Jamaica, Costa Rica; adjustments for Jamaica due to Hurricane Melissa; plan to enter Chile.
• Supply Chain Transformation: New distribution centers in Trinidad, Colombia, Dominican Republic; implementing third-party distribution centers in China; RELEX forecasting/replenishment and e2open global trade management platform implementations.
• Technology Investments: Mobile app migration to native architectures; new point-of-sale system in English-speaking Caribbean; Workday HR system implementation.
• Private Label: Private label sales 27% of total merchandise sales (down 70 basis points due to reclassification, but comparable up 70 basis points); focus on growth.
• Co-Branded Credit Card: Enhanced in Dominican Republic with Banco Santa Cruz, offering 6% cash back at clubs.
• Omnichannel: Digital channel sales up 29.4% to $89.8 million, representing 6.6% of total net merchandise sales.
• Holiday Season: 9-week comparable net merchandise sales growth 7.1% in USD, 5.4% in constant currency; issues in Honduras (election) and Panama (rainy season/supply chain) but recovery underway.

Segment Performance

• Central America: Net merchandise sales increased 9.6% or 9.2% in constant currency; comparable net merchandise sales up 5.4% or 5.1%; contributed approximately 320 basis points to consolidated comparable net merchandise sales growth.
• Caribbean: Net merchandise sales up 5.7% or 7.8% in constant currency; comparable net merchandise sales up 5.6% or 7.7%; contributed approximately 160 basis points.
• Colombia: Net merchandise sales up 27.8% or 15% in constant currency; comparable net merchandise sales up 27.9% or 14.7%; contributed approximately 320 basis points.
• Merchandise Categories: Foods grew ~11.3%, non-foods ~7.2%, food service/bakery ~10.1%, health services (including optical, audiology, pharmacy) ~17.8%.
• Membership: Grew 6.7% to over 2 million accounts; Platinum memberships increased to 19.3% of total membership base; membership income as a percentage of revenue rose to 1.7%.

Guidance

• Club Openings: Planned openings of new clubs in Dominican Republic, Jamaica, Costa Rica; advancing entry into Chile.
• Distribution Centers: Planned new distribution centers in Trinidad, Colombia, Dominican Republic; continuing implementation of RELEX and e2open platforms.
• Infrastructure Upgrades: Warehouse club and parking lot expansions in Jamaica and Barbados to drive sales and enhance member experience.

Risks

• U.S. Tariffs: Monitoring evolving trade policy; currently, U.S. tariffs not significantly impacting cost structure/business operations.
• Remittance Flows: Monitoring changes in remittance patterns to Latin America/Caribbean; no material impact on consumer demand/purchasing behavior seen yet.
• Venezuela Situation: Monitoring situation closely; early to understand implications for business/U.S. companies operating in the region.

Question and Answer

• **Q: December comps in Honduras and Panama; A: David Price stated government elections in Honduras caused front-loading of purchasing in November, with recovery post-election; Panama issues improving as dry season begins.
• **Q: Colombia strength; A: David Price cited peso strength, merchandise mix (more local items), team execution, and item development (including exports to other markets) as drivers of Colombia's strong performance.
• **Q: Venezuela migration impact on Colombia; A: David Price noted no speculation, emphasizing strong consumer demand in Colombia and the company's good brand position.
• **Q: Trinidad cash increase; A: Gualberto Hernandez explained fluctuations in dollar availability in Trinidad, with high season after Christmas contributing to increased cash on hand, but no material changes in conditions.
• **Q: Chile market insights; A: David Price mentioned Chile is competitive, digitalized, and open to free trade, with no specific surprises; optimistic about entering the market.
• **Q: Colombia revenue growth sustainability; A: David Price expressed confidence in operations but noted macroeconomic/political factors are out of control; Gualberto Hernandez complemented on growing efficiency in Colombia.
• **Q: Warehouse expansions impact; A: David Price stated warehouse expansions/remodels/parking expansions help members, improve efficiency, and aid in selling pilot positions.