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]

Core Points - PriceSmart, Inc. has announced the appointment of Gualberto Hernandez as the new Chief Financial Officer (CFO) effective June 1, 2025, following the resignation of Michael McCleary by mutual agreement [1] - Michael McCleary will continue to serve as an Executive Vice President until September 30, 2025, and will provide consulting support for three months post-resignation [1] Group 1: Leadership Transition - Gualberto Hernandez has extensive experience, having served as Vice President Finance & Strategy for Latin America at The Estée Lauder Companies since January 2016, and held various leadership roles within the company [2] - Robert Price, Interim CEO, expressed gratitude for Michael McCleary's contributions over his 20-year tenure, highlighting the company's growth during his leadership, including a doubling of club count and an eight-fold increase in revenues [3] Group 2: Company Overview - PriceSmart operates 55 warehouse clubs across 12 countries and one U.S. territory, with plans to open a new club in Quetzaltenango, Guatemala in summer 2025, bringing the total to 56 [4]

Financial Performance - PriceSmart's net merchandise sales reached $133 billion for the three months ended February 28, 2025, representing a 58% growth [99] - Net merchandise sales saw a constant currency growth of 70% [99] - Membership income increased by 128% to $209 million [99] - Total revenue grew by 56% to $136 billion [99] - For the first six months of fiscal year 2025, net merchandise sales reached $256 billion, a 68% increase [101] - Membership income for the first six months grew by 133% to $411 million [101] Membership and Expansion - PriceSmart operates 55 warehouse clubs across 12 countries and one US territory [36] - The company has over 193 million members [12] - Membership renewal rate stands at 870% [33] - Private label penetration of total net merchandise sales is 274% for the six-month period ended February 28, 2025 [68] Omni-Channel and Digital Penetration - Omni-channel sales penetration of total net merchandise sales is 57% [99, 101]

Financial Data and Key Metrics Changes - In the second quarter, net merchandise sales reached over $1.3 billion, and total revenue was almost $1.4 billion [14] - Net merchandise sales increased by 0.8% or 7% in constant currency during the second quarter [15] - Net income for the second quarter was $43.8 million or $1.45 per diluted share, compared to $39.3 million or $1.31 per diluted share in the same quarter last year [25] - Adjusted EBITDA for the second quarter was $87 million compared to $84.1 million in the same period last year [25] - Total gross margins as a percentage of net merchandise sales decreased by 10 basis points to 26.6% [21] Business Line Data and Key Metrics Changes - In Central America, net merchandise sales increased by 0.4% or 0.6% in constant currency [15] - In the Caribbean, net merchandise sales increased by 0.4% or 0.6% in constant currency [16] - In Colombia, net merchandise sales increased by 0.6% or 16% in constant currency [17] - Membership accounts grew by 0.1% to over 1.9 million accounts, with a 12-month removal rate of 87% [18] Market Data and Key Metrics Changes - All markets in Central America had positive comparable net merchandise sales growth, except for El Salvador [15] - The Caribbean region contributed approximately 230 basis points to the growth in total consolidated comparable net merchandise sales for the second quarter [16] - Colombia contributed approximately 100 basis points to the growth in total consolidated comparable net merchandise sales for the quarter [17] Company Strategy and Development Direction - The company is focusing on enhancing its distribution infrastructure and plans to open new warehouse clubs in Guatemala and other locations [30][31] - The company is actively seeking ways to improve its distribution network, including operating its own fleet of trucks [33] - The company is investing in technology to enhance supply chain efficiency and improve the member experience [44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing tariff challenges and emphasized the importance of sourcing products locally and regionally [10][11] - The company is developing contingency plans to adapt to the uncertain tariff environment [12] - Management expressed optimism about the growth opportunities in digital channels and plans to continue investing in this area [44] Other Important Information - The company opened its ninth warehouse club in Costa Rica during the quarter [9] - The effective tax rate for the second quarter was 22% compared to 25% a year ago, primarily due to tax optimization initiatives [24] - The company has seven recycling centers open and plans to expand this program [46] Q&A Session Summary Question: Impact of tariffs on merchandise sourcing - Management is not aware of any reciprocal tariffs imposed by Central American countries and believes the impact will be minimal [55][60] Question: Future store openings - Management disclosed that there are up to six locations in various stages of due diligence and permitting, but no specific timing was provided [66]

Revenue Growth - Total revenues for Q2 FY2025 increased by 5.6% to $1.36 billion compared to $1.29 billion in the same period last year[3] - Year-to-date total revenues for the six months ended February 28, 2025, increased by 6.6% to $2.62 billion compared to $2.46 billion in the prior year[7] Merchandise Sales - Net merchandise sales grew by 5.8% to $1.33 billion from $1.26 billion in Q2 FY2024, with a constant currency increase of 7.0%[3] - Comparable net merchandise sales for clubs open for more than 13.5 months increased by 6.7% for the 13-week period ended March 2, 2025[5] - Net merchandise sales for the three months ended February 28, 2025, reached $1,334,555 million, with a growth rate of 5.8% compared to the previous year[23] - Comparable net merchandise sales growth for the thirteen weeks ended March 2, 2025, was 6.7%, while the comparable net merchandise sales on a constant-currency basis grew by 7.9%[24] Net Income - Net income rose by 11.4% to $43.8 million, or $1.45 per diluted share, compared to $39.3 million, or $1.31 per diluted share, in Q2 FY2024[6] - Net income for the three months ended February 28, 2025, was reported at $43,760 million, an increase from $39,271 million for the same period in 2024, reflecting a growth of 3.8%[21] Operating Income and EBITDA - Adjusted EBITDA for Q2 FY2025 was $87.0 million, up from $84.1 million in the same period last year[6] - Operating income for the first six months of FY2025 was $123.5 million, compared to $121.8 million in the prior-year period[9] - Adjusted EBITDA for the six months ended February 28, 2025, was $161,895 million, compared to $166,137 million for the same period in 2024, indicating a decrease of 2.0%[21] Foreign Currency Impact - Foreign currency exchange rate fluctuations negatively impacted net merchandise sales by $14.7 million, or 1.2%, in Q2 FY2025[3] - The unfavorable impact of foreign currency exchange on net merchandise sales for the six months ended February 28, 2025, was $19,406 million, equating to a 0.8% decrease[23] Company Expansion - The company opened its ninth warehouse club in Costa Rica, bringing the total to 55 clubs[11] - The company plans to open one additional warehouse club in Quetzaltenango, Guatemala, in the summer of 2025[14] Assets and Liabilities - Total assets increased to $2,092,665 million as of February 28, 2025, up from $2,022,694 million on August 31, 2024, representing a growth of 3.5%[19] - Total current liabilities increased to $701,805 million as of February 28, 2025, compared to $680,148 million on August 31, 2024, marking a rise of 3.5%[19] Retained Earnings and Equity - Retained earnings rose to $932,673 million as of February 28, 2025, up from $890,272 million on August 31, 2024, reflecting an increase of 4.7%[19] - The company reported a total stockholders' equity of $1,172,586 million as of February 28, 2025, compared to $1,122,965 million on August 31, 2024, indicating a growth of 4.4%[19] Salaries and Benefits - The company experienced a decrease in accrued salaries and benefits, which fell to $38,258 million from $48,263 million, a decline of 20.7%[19]

Company Operations - PriceSmart operates 55 warehouse clubs across 12 countries and the U.S. Virgin Islands, generating revenues exceeding $4.9 billion in fiscal year 2024[179]. - The company has nearly 2 million membership accounts and almost 4 million cardholders, with annual fees of approximately $40 for Diamond Membership and $80 for Platinum Membership, which includes a 2% cash-back rebate[180]. - PriceSmart sources about 50% of its merchandise from regional suppliers, focusing on innovation by adding services like optical, audiology, and pharmacy, along with online shopping options[181]. - The company plans to open a new warehouse club in Guatemala in summer 2025, which will increase the total to 56 clubs[186]. - In April 2025, PriceSmart opened a new warehouse club in Costa Rica, located in Cartago, enhancing its market presence[185]. Financial Performance - Total revenues increased by 5.6% year-over-year, with net merchandise sales rising by 5.8%[204]. - Membership income for Q2 FY 2025 increased by 12.8% to $20.9 million compared to the prior year[204]. - Net income for Q2 FY 2025 was $43.8 million, or $1.45 per diluted share, compared to $39.3 million, or $1.31 per diluted share, in Q2 FY 2024[204]. - Adjusted EBITDA for Q2 FY 2025 was $87.0 million, up from $84.1 million in the same period last year[204]. - Net merchandise sales for the three months ended February 28, 2025, reached $1,334,555, reflecting a 5.8% increase from $1,260,916 for the same period in 2024[209]. Membership and Sales Growth - Private-label sales under the Member's Selection® brand accounted for 27.4% of total merchandise sales during the first six months of FY 2025, up from 27.1% in the same period of FY 2024[201]. - Platinum Membership accounts increased to 14.5% of the total membership base as of February 28, 2025, up from 9.6% a year earlier[201]. - Comparable net merchandise sales for the 13 weeks ended March 2, 2025, increased by 6.7%, with a constant currency increase of 7.9%[204]. - Central America segment net merchandise sales increased by 5.4% and 6.8% for the three and six months ended February 28, 2025, contributing 330 basis points and 410 basis points to total sales growth, respectively[210]. - Caribbean segment net merchandise sales grew by 6.4% and 5.9% for the same periods, contributing 180 basis points and 170 basis points to total sales growth[211]. Currency and Economic Impact - Approximately 80% of net merchandise sales in the first half of fiscal years 2025 and 2024 were in currencies other than the U.S. dollar, with 49.6% and 49.4% of those sales being products purchased in U.S. dollars[190]. - Currency fluctuations significantly impact sales and profits, with a 15% devaluation of the Colombian peso in fiscal year 2023 affecting the company's gross margin[191]. - Currency fluctuations negatively impacted net merchandise sales by approximately $14.7 million (1.2%) for the three months and $19.4 million (0.8%) for the six months ended February 28, 2025[216]. - The company experienced U.S. dollar illiquidity in certain markets, impacting its ability to convert local currencies into U.S. dollars, with $75.6 million in Trinidad dollar denominated cash and cash equivalents as of February 28, 2025[270]. Expenses and Taxation - Selling, general and administrative expenses rose by 7.0% in Q2 FY 2025, primarily due to investments in technology[204]. - The effective tax rate decreased to 27.2% in Q2 FY 2025 from 30.5% in Q2 FY 2024, attributed to tax optimization initiatives[204]. - The effective tax rate for the six months ended February 28, 2025, was 26.9%, down from 31.4% in the prior year, attributed to tax optimization initiatives[263]. - The company recorded a $7.2 million charge in fiscal year 2023 to settle a minimum tax payment dispute in one of its operating countries[196]. Cash Flow and Investments - Net cash provided by operating activities for the six months ended February 28, 2025, was $126,385,000, a slight decrease of $1,281,000 from $127,666,000 in the prior year[271]. - Net cash used in investing activities decreased by $25,756,000 to $79,508,000 for the six months ended February 28, 2025, primarily due to a $40.7 million decrease in property and equipment expenditures[272]. - Capital expenditures for the six months ended February 28, 2025, were $62,800,000, with $35,600,000 for maintenance and $27,200,000 for growth expenditures[276]. Shareholder Returns - The company declared an annual cash dividend of $1.26 per share on February 6, 2025, with $0.63 per share paid on February 28, 2025[275]. - The company repurchased approximately 1,007,000 shares of common stock under a program that was completed in the first quarter of fiscal year 2024[283]. Risk Factors and Compliance - The company’s operating results fluctuate due to seasonal retail patterns and external economic factors, making quarterly results not indicative of full-year performance[296]. - The company’s tax returns are subject to routine reviews by taxing authorities, which may challenge the interpretations used to calculate tax liabilities[287]. - The company evaluates long-lived assets quarterly for impairment indicators, which could lead to adjustments based on future business activity estimates[294].

Core Insights - PriceSmart, Inc. reported a 5.6% increase in total revenues for the second quarter of fiscal year 2025, reaching $1.36 billion compared to $1.29 billion in the same period last year [2] - Net merchandise sales grew by 5.8% to $1.33 billion, with a constant currency increase of 7.0% [2][7] - The company achieved net income of $43.8 million, or $1.45 per diluted share, marking an 11.4% increase from the previous year [5][9] Financial Performance - Total revenues for the first six months of fiscal year 2025 increased by 6.6% to $2.62 billion compared to $2.46 billion in the prior year [7] - Net merchandise sales for the first half of fiscal year 2025 rose by 6.8% to $2.56 billion, with a constant currency increase of 7.6% [7] - Adjusted EBITDA for the second quarter was $87.0 million, up from $84.1 million in the same period last year [6] Comparable Sales - Comparable net merchandise sales for the 53 warehouse clubs open for more than 13.5 months increased by 6.7% for the 13-week period ending March 2, 2025 [4] - Comparable net merchandise sales on a constant currency basis for the same period rose by 7.9% [4][26] - For the 26-week period ending March 2, 2025, comparable net merchandise sales increased by 6.2%, with a constant currency increase of 7.1% [8][26] Operational Updates - As of February 28, 2025, PriceSmart operated 54 warehouse clubs, with a new club recently opened in Costa Rica, bringing the total to 55 [3][11] - The company plans to open an additional warehouse club in Quetzaltenango, Guatemala in the summer of 2025, which will increase the total to 56 [15] Currency Impact - Foreign currency exchange rate fluctuations negatively impacted net merchandise sales by $14.7 million, or 1.2%, in the second quarter compared to the prior year [2][24] - For the first six months, the negative impact from foreign currency exchange was $19.4 million, or 0.8% [7][24]

Core Points - Robert Price will step down as Interim CEO of PriceSmart effective August 31, 2025, transitioning to Executive Chairman of the Board of Directors [1][2] - David Price, currently Executive Vice President and Chief Transformation Officer, will succeed Robert Price as CEO starting September 1, 2025 [1][2] - The transition is part of a succession plan approved by the Board of Directors, ensuring continuity in leadership and company culture [2][3] Company Overview - PriceSmart operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, with 54 clubs across 12 countries and one U.S. territory [5] - The company plans to open two new warehouse clubs in 2025, one in Cartago, Costa Rica, and another in Quetzaltenango, Guatemala, bringing the total to 56 clubs [5]

Group 1 - PriceSmart, Inc. plans to release its financial results for the second quarter of fiscal year 2025 on April 9, 2025, after market close [1] - A conference call to discuss the financial results will be held on April 10, 2025, at 12:00 p.m. Eastern time [1] - PriceSmart operates 54 warehouse clubs across 12 countries and one U.S. territory, with plans to open two additional clubs in Costa Rica and Guatemala in 2025 [2] Group 2 - The company emphasizes its focus on providing high-quality merchandise and services at low prices to its members [2] - Once the new clubs are opened, PriceSmart will operate a total of 56 warehouse clubs [2]