Financial Data and Key Metrics Changes - Net merchandise sales for Q3 reached almost $1,300 million, with total revenue exceeding $1,300 million, marking an 8% increase in net merchandise sales or 9.5% in constant currency compared to the previous year [19] - For the first nine months, net merchandise sales surpassed $3,800 million, with total revenue over $3,900 million, reflecting a 7.2% increase in net merchandise sales or 8.2% in constant currency [19] - Net income for Q3 was $35.2 million or $1.14 per diluted share, compared to $32.5 million or $1.08 per diluted share in the same period last year [26] Business Line Data and Key Metrics Changes - In Central America, net merchandise sales increased by 7.5% or 7.6% in constant currency, with comparable net merchandise sales up by 5.7% or 5.9% in constant currency [19] - The Caribbean region saw net merchandise sales rise by 8.2% or 9.7% in constant currency, with comparable net merchandise sales increasing by 8.6% or 10.1% in constant currency [20] - In Colombia, net merchandise sales increased by 10.1% or 19.3% in constant currency, with comparable net merchandise sales up by 9.9% or 19.1% in constant currency [20] Market Data and Key Metrics Changes - Membership accounts grew by 5.1% year-over-year to almost 2 million accounts, with a twelve-month renewal rate of 88% as of May 31, 2025 [21] - Private label sales represented 27.7% of total merchandise sales, up 30 basis points from the same period last year [15] - Digital channel sales reached $79 million, a 19.8% increase year-over-year, representing 6.1% of total net merchandise sales [16] Company Strategy and Development Direction - The company plans to open new warehouse clubs in Costa Rica and Guatemala, with a focus on expanding in existing markets and assessing new market opportunities, particularly in Chile [10][12] - Investments in distribution and logistics infrastructure are ongoing, with plans to upgrade distribution centers and enhance logistics capabilities [13][14] - The company is committed to sustainability and has released its fiscal year 2024 sustainability report, highlighting its environmental and social responsibility efforts [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth potential in Chile due to its strong middle class and stable government [52] - The company is actively pursuing strategies to improve efficiencies and offset rising costs for members, including supply chain diversification and increased utilization of free trade zones [14] - The effective tax rate has decreased due to tax optimization initiatives, with an estimated annualized effective tax rate of approximately 27% to 29% going forward [25] Other Important Information - The company is modernizing its processes and technology, including a migration to the ReLex platform to enhance inventory management and reduce spoilage [17] - The company recorded a net loss in total other expenses due to unrealized losses in U.S. Dollar-denominated monetary assets and liabilities [24] Q&A Session Summary Question: Trinidad funding plans and currency conversion issues - Management explained that the financing arrangement includes a $15 million U.S. dollar loan and $50 million indexed to U.S. dollars, minimizing additional currency exposure [35][56] Question: Strategic decision to consider Chile for future openings - Management highlighted Chile's strong middle class, good trade relations, and stable government as key factors in considering it for future openings [51][62]

PRICESMART ANNOUNCES FISCAL 2025 THIRD QUARTER OPERATING RESULTS AND CHILE AS A POTENTIAL NEW MARKET NET MERCHANDISE SALES GREW 8.0% COMPARABLE NET MERCHANDISE SALES INCREASED 7.0% $1.14 EARNINGS PER DILUTED SHARE San Diego, CA (July 10, 2025) - PriceSmart, Inc. ("PriceSmart" or the "Company") (NASDAQ: PSMT), operator of 55 warehouse clubs in 12 countries and one U.S. territory, today announced results for the fiscal third quarter of 2025, which ended on May 31, 2025. Third Quarter Financial Results Total r ...

Core Insights - PriceSmart, Inc. (PSMT) reported third-quarter fiscal 2025 results with year-over-year increases in both revenue and earnings, although earnings fell short of the Zacks Consensus Estimate [1][4]. Financial Performance - Adjusted earnings per share for the quarter were $1.14, missing the Zacks Consensus Estimate of $1.16, but representing a 5.6% increase from $1.08 in the same quarter last year [4]. - Total revenues reached $1.32 billion, marking a 7.1% increase from the prior-year quarter, while net merchandise sales climbed to $1.29 billion, an 8% increase year-over-year [4]. - On a constant currency basis, net merchandise sales rose by 9.5%, although foreign currency fluctuations negatively impacted sales by $18.6 million, or 1.5% [4]. - Membership income increased by 13.4% year-over-year to $21.9 million [4]. Comparable Sales - Comparable net merchandise sales grew by 7% for the 13 weeks ending June 1, 2025, compared to the same period the previous year, with an 8.5% increase on a constant currency basis [5]. Cost and Margins - Selling, general and administrative expenses totaled $172.8 million, up 8.4% from $159.5 million in the prior-year quarter, representing approximately 13.1% of total revenues [8]. - Operating income for the quarter was $56.2 million, an increase from $49.9 million in the prior-year period, with an operating margin improvement of 20 basis points to approximately 4.3% [9]. EBITDA and Financial Health - Adjusted EBITDA increased by 11.2% year-over-year to $79 million, with an adjusted EBITDA margin of approximately 6%, up 20 basis points from the previous year [10][11]. - The company ended the quarter with cash and cash equivalents of $168 million, long-term debt of $86.2 million, and total shareholders' equity of $1.21 billion [12]. - As of May 31, 2025, PriceSmart operated 55 warehouse clubs, an increase from 54 clubs a year earlier [12]. Strategic Expansion - PriceSmart is evaluating Chile as a potential new market for multiple warehouse clubs, indicating a commitment to strategic expansion and long-term growth [3][2].

Group 1 - PriceSmart, Inc. (PSMT) reported strong fiscal Q3 results, leading to an increase in stock price during post-market trading [1] - The company demonstrated robust momentum in its currently open locations [1] - PriceSmart is considering expansion into Chile [1]

Business Overview - PriceSmart operates 55 warehouse clubs in 12 countries and one U S territory, serving nearly 20 million members[12,36] - The company is considering Chile as a potential new market for expansion[36] - The company's value proposition is based on "The Six Rights," focusing on merchandise, time, place, condition, quantity, and price[14] Financial Performance - Total revenue for the trailing twelve months (TTM) is $52 billion[51,131] - Net merchandise sales reached $385 billion year-to-date (YTD), with a 72% growth rate[104] - Membership income grew by 133% YTD, reaching $630 million[104] - Omni-channel sales represent 58% of total net merchandise sales YTD[104] Growth and Expansion - The company is planning to open its 57th club in La Romana, Dominican Republic, in the spring of 2026[17] - Digital platforms accounted for 49% of total net merchandise sales[17] - Private label penetration reached 277% of total net merchandise sales for the nine-month period ended May 31, 2025[71] Membership and Loyalty - The membership renewal rate is 880%[33,52] - The company has 197 million members[33,51]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents PriceSmart, Inc.'s unaudited consolidated financial statements and management's discussion for the period ended May 31, 2025 [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) PriceSmart, Inc.'s unaudited consolidated financial statements for the period ended May 31, 2025, detail financial position, performance, and cash flows [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of May 31, 2025, total assets were $2.14 billion, an increase from $2.02 billion at August 31, 2024, driven by increases in cash and cash equivalents and property and equipment, while total liabilities rose to $930.2 million and total stockholders' equity increased to $1.21 billion Consolidated Balance Sheet Highlights (USD in thousands) | Account | May 31, 2025 (Unaudited) | August 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $900,779 | $832,347 | | Cash and cash equivalents | $167,961 | $125,364 | | Merchandise inventories | $553,123 | $528,678 | | **Total Assets** | **$2,144,440** | **$2,022,694** | | **Total Current Liabilities** | $701,786 | $680,148 | | Accounts payable | $499,088 | $485,961 | | **Total Liabilities** | **$930,247** | **$899,729** | | **Total Stockholders' Equity** | **$1,214,193** | **$1,122,965** | [Consolidated Statements of Income](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For the third quarter ended May 31, 2025, PriceSmart reported net income of $35.2 million on total revenues of $1.32 billion, with diluted EPS of $1.14, compared to $32.5 million net income on $1.23 billion revenues in the prior-year period Key Income Statement Data (USD in thousands, except per share data) | Metric | Three Months Ended May 31, 2025 | Three Months Ended May 31, 2024 | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net merchandise sales | $1,289,997 | $1,194,531 | $3,848,411 | $3,590,461 | | Total revenues | $1,317,289 | $1,229,428 | $3,939,119 | $3,687,853 | | Operating income | $56,230 | $49,909 | $179,760 | $171,740 | | Net income | $35,158 | $32,489 | $116,346 | $109,807 | | Diluted EPS | $1.14 | $1.08 | $3.80 | $3.62 | [Consolidated Statements of Cash Flows](index=12&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the nine months ended May 31, 2025, net cash provided by operating activities increased to $179.2 million, while net cash used in investing activities decreased to $95.8 million and financing activities significantly decreased to $41.9 million Cash Flow Summary (USD in thousands) | Activity | Nine Months Ended May 31, 2025 | Nine Months Ended May 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $179,160 | $165,754 | | Net cash used in investing activities | ($95,788) | ($149,379) | | Net cash used in financing activities | ($41,888) | ($124,279) | | Effect of exchange rate changes | $5,324 | ($3,956) | | **Net increase (decrease) in cash** | **$46,808** | **($111,860)** | [Notes to Consolidated Financial Statements](index=14&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Detailed notes explain PriceSmart's accounting policies, financial data, growth strategy, revenue recognition, debt, and subsequent events - As of May 31, 2025, the Company operated **55** warehouse clubs in **12** countries and one U.S. territory, with plans to open **2** new clubs by spring 2026[32](index=32&type=chunk) - The company's growth strategy focuses on **three drivers**: new locations, increased membership value, and enhanced e-commerce capabilities[37](index=37&type=chunk) - Subsequent to quarter-end, in June 2025, the company purchased a San Diego office building for **$20.8 million**, partially funded by a **$12.5 million** loan[171](index=171&type=chunk) - In July 2025, the Trinidad subsidiary secured over **$50 million** in financing transactions to enhance U.S. dollar liquidity, including a bond issuance and loan agreements[172](index=172&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=40&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses PriceSmart's Q3 and nine-month fiscal 2025 financial performance, highlighting revenue growth, currency impacts, strategic initiatives, and liquidity Q3 FY2025 Financial Highlights vs. Q3 FY2024 (USD) | Metric | Q3 FY2025 | Q3 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1.32B | $1.23B | +7.1% | | Net Merchandise Sales | $1.29B | $1.19B | +8.0% | | Comparable Net Merchandise Sales | - | - | +7.0% | | Operating Income | $56.2M | $49.9M | +12.7% | | Net Income | $35.2M | $32.5M | +8.3% | | Diluted EPS | $1.14 | $1.08 | +5.6% | - The company's growth strategy focuses on **three pillars**: new locations, increased membership value, and enhanced digital sales capabilities[205](index=205&type=chunk) - Digital channel sales increased **19.8%** year-over-year in Q3, reaching a record **$79.0 million**, or **6.1%** of total net merchandise sales[207](index=207&type=chunk) - The company is actively evaluating **Chile** as a potential new market for multiple warehouse clubs[189](index=189&type=chunk)[205](index=205&type=chunk) [Results of Operations](index=51&type=section&id=Results%20of%20Operations) For Q3 FY2025, net merchandise sales grew 8.0% to $1.29 billion, driven by increased transactions and average ticket, with all segments showing growth despite adverse currency fluctuations, leading to a 12.7% increase in operating income Net Merchandise Sales Growth by Segment (Q3 FY2025 vs Q3 FY2024) | Segment | Sales Growth | Constant Currency Sales Growth | Impact of Foreign Currency | | :--- | :--- | :--- | :--- | | Central America | 7.5% | 7.6% | (0.1)% | | Caribbean | 8.2% | 9.7% | (1.5)% | | Colombia | 10.1% | 19.3% | (9.2)% | | **Consolidated** | **8.0%** | **9.5%** | **(1.5)%** | - Membership income increased **13.4%** to **$21.9 million** in Q3, driven by **5.1%** growth in member accounts, with a stable **88.0%** trailing twelve-month renewal rate[237](index=237&type=chunk)[238](index=238&type=chunk)[241](index=241&type=chunk) - SG&A expenses increased by **20 basis points** as a percentage of total revenue, primarily due to technology investments[252](index=252&type=chunk)[256](index=256&type=chunk) - The effective tax rate for Q3 decreased to **28.4%** from **30.8%** in the prior year, driven by tax optimization initiatives[268](index=268&type=chunk) [Liquidity and Capital Resources](index=67&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintains strong liquidity, primarily from operations, with $183.1 million in cash and equivalents, while facing U.S. dollar illiquidity challenges in Trinidad and Honduras, and declared an annual dividend of $1.26 per share Cash and Investments (USD in thousands) | Account | May 31, 2025 | August 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and restricted cash | $183,119 | $136,311 | | Short-term investments | $94,408 | $100,165 | - The company faces U.S. dollar illiquidity in Trinidad, with **$73.9 million** in Trinidad dollar-denominated assets, and in Honduras, with **$2.0 million** in lempira-denominated assets as of May 31, 2025[275](index=275&type=chunk) - Capital expenditures for the first nine months of FY2025 totaled **$101.6 million**, allocated as **$51.4 million** for maintenance and **$50.2 million** for growth[280](index=280&type=chunk) - The Board declared an annual cash dividend of **$1.26 per share** for fiscal 2025, payable in two installments[279](index=279&type=chunk) [Critical Accounting Estimates](index=71&type=section&id=Critical%20Accounting%20Estimates) Management identifies income taxes, tax receivables, and long-lived asset impairment as critical accounting estimates, requiring significant judgment in assessing uncertain tax positions and recoverability - Significant judgment is required for income taxes, particularly in assessing uncertain tax positions and the recoverability of deferred tax assets across multiple jurisdictions[290](index=290&type=chunk)[291](index=291&type=chunk) - The company holds significant VAT and income tax receivables, classified based on expected recovery time, with no allowance currently placed as recovery is deemed more likely than not[293](index=293&type=chunk)[297](index=297&type=chunk)[299](index=299&type=chunk) - Long-lived assets are evaluated quarterly for impairment indicators, with no significant impairment charges recorded during Q3 FY2025[298](index=298&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=74&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company reports no material changes in market risks since fiscal year-end 2024, but reiterates ongoing U.S. dollar illiquidity challenges in Trinidad and Honduras - No material changes in market risk factors, including interest rate and currency exchange rate risk, have occurred since the FY2024 Annual Report on Form 10-K[301](index=301&type=chunk) - The company continues to face U.S. dollar illiquidity in Trinidad and Honduras, hindering the conversion of local currency sales to settle liabilities[302](index=302&type=chunk) [Controls and Procedures](index=74&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures were effective as of May 31, 2025, with no material changes to internal control over financial reporting during the quarter - Disclosure controls and procedures were deemed effective at a reasonable assurance level by the Principal Executive Officer and Principal Financial Officer as of the reporting period end[305](index=305&type=chunk) - No material changes in internal control over financial reporting occurred during the most recently completed fiscal quarter[306](index=306&type=chunk) [PART II - OTHER INFORMATION](index=76&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, equity sales, and other disclosures [Legal Proceedings](index=76&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in various claims arising from the ordinary course of business, which management does not expect to have a material adverse effect on its financial condition or results of operations - The company is involved in ordinary course claims, but does not anticipate a material adverse effect on its financial condition or results[309](index=309&type=chunk) [Risk Factors](index=76&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section highlights the company's vulnerability to political and economic conditions, including potential negative impacts from U.S. tariffs and a decline in remittances to key Latin American markets - The company is vulnerable to U.S. tariffs, which could increase prices or affect product sourcing, potentially harming sales and profitability[311](index=311&type=chunk) - A decline in remittances to key markets, potentially due to U.S. policy changes or new taxes, could negatively impact local economies and consumer spending[312](index=312&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During Q3 FY2025, the company repurchased 1,298 shares of common stock at an average price of $96.15 per share to cover employee tax withholding obligations, noting no formal share repurchase program is currently in place Common Stock Repurchase Activity (Q3 FY2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 2025 | 466 | $88.82 | | April 2025 | 832 | $100.26 | | May 2025 | 0 | $0.00 | | **Total** | **1,298** | **$96.15** | - Repurchases were for employee tax withholding on vested restricted stock, not a formal buyback program[314](index=314&type=chunk) [Defaults Upon Senior Securities](index=77&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities during the period - None[316](index=316&type=chunk) [Mine Safety Disclosures](index=77&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[317](index=317&type=chunk) [Other Information](index=77&type=section&id=ITEM%205.%20OTHER%20INFORMATION) On May 14, 2025, Michael McCleary, then EVP and CFO, adopted a Rule 10b5-1 trading plan for the sale of up to 6,322 shares of common stock, plus tax-related shares, from September 2025 to January 2026 - Michael McCleary, former EVP and CFO, adopted a Rule 10b5-1 Trading Plan on May 14, 2025, for stock sales starting September 9, 2025[318](index=318&type=chunk) [Exhibits](index=78&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including employment and separation agreements for CFOs and Sarbanes-Oxley certifications - Key exhibits include employment and separation agreements for CFOs, and Sarbanes-Oxley certifications[320](index=320&type=chunk)

Core Insights - PriceSmart, Inc. reported a total revenue increase of 7.1% to $1.32 billion for the third quarter of fiscal year 2025 compared to $1.23 billion in the same period last year [2] - Net merchandise sales grew by 8.0% to $1.29 billion, with a constant currency increase of 9.5% [2][5] - The company recorded net income of $35.2 million, or $1.14 per diluted share, reflecting an 8.2% increase from $32.5 million, or $1.08 per diluted share, in the prior year [5][19] Financial Performance - Total revenues for the nine months ended May 31, 2025, increased by 6.8% to $3.94 billion compared to $3.69 billion in the same period last year [6] - Year-to-date net merchandise sales rose by 7.2% to $3.85 billion from $3.59 billion in the comparable prior-year period [6][8] - Adjusted EBITDA for the third quarter was $79.0 million, up from $71.0 million in the same period last year [5] Comparable Sales - Comparable net merchandise sales for the 54 warehouse clubs open for more than 13.5 months increased by 7.0% for the 13-week period ended June 1, 2025 [4] - Comparable net merchandise sales on a constant currency basis for the same period increased by 8.5% [4][24] - For the 39-week period ended June 1, 2025, comparable net merchandise sales increased by 6.5% [7] Operational Expansion - As of May 31, 2025, PriceSmart operated 55 warehouse clubs, an increase from 54 clubs a year earlier [3] - The company is exploring opportunities to open new warehouse clubs in Chile, hiring local consultants to assist in site evaluations [10] Currency Impact - Foreign currency exchange rate fluctuations negatively impacted net merchandise sales by $18.6 million, or 1.5%, compared to the same period last year [2][6] - The unfavorable impact of foreign currency exchange on comparable net merchandise sales was also noted, affecting results by 1.5% for the 13-week period and 1.1% for the 39-week period [4][7]

Core Points - PriceSmart, Inc. will hold its conference call for the third quarter financial results on July 14, 2025, due to a scheduling conflict [1] - The financial results will be released on July 10, 2025, after market close [2] Company Overview - PriceSmart operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, with 55 clubs across 12 countries and one U.S. territory [3] - The company plans to open two new warehouse clubs, one in Quetzaltenango, Guatemala in August 2025 and another in La Romana, Dominican Republic in spring 2026, bringing the total to 57 clubs [3]

Group 1 - The retail space presents occasional investment opportunities despite general skepticism [1] - PriceSmart is highlighted as a notable example of a potential investment in the retail sector [1] Group 2 - Crude Value Insights offers an investment service focused on oil and natural gas, emphasizing cash flow and growth prospects [1] - Subscribers benefit from a stock model account, cash flow analyses of exploration and production firms, and live sector discussions [2]

Financial Results Announcement - PriceSmart, Inc. plans to release financial results for the third quarter of fiscal year 2025 on July 10, 2025, after market close [1] - A conference call to discuss the financial results will be held on July 11, 2025, at 12:00 p.m. Eastern time [1] Expansion Plans - The company has purchased land for its sixth warehouse club in the Dominican Republic, located in La Romana, approximately 73 miles from the nearest club in Santo Domingo [2] - The new club is expected to open in the spring of 2026, bringing the total number of warehouse clubs operated by PriceSmart to 57 [2][3] - Additionally, PriceSmart plans to open another warehouse club in Quetzaltenango, Guatemala, in the summer of 2025 [3] Company Overview - PriceSmart operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, currently managing 55 clubs across 12 countries and one U.S. territory [3] - The countries include ten clubs in Colombia, nine in Costa Rica, seven in Panama, and others in Guatemala, Dominican Republic, Trinidad, El Salvador, Honduras, Nicaragua, Jamaica, Aruba, Barbados, and the U.S. Virgin Islands [3]