PriceSmart(US:PSMT)2026-01-07 21:10Expansion and Operations - As of November 30, 2025, PriceSmart operates 56 warehouse clubs across Central America, the Caribbean, and Colombia, with plans to expand into Chile[166]. - In fiscal year 2026, PriceSmart plans to open new warehouse clubs in the Dominican Republic, Jamaica, and Costa Rica, increasing its total to 60 clubs[171][172][173][175]. - PriceSmart is actively pursuing expansion opportunities in Chile, with executory agreements for two potential sites for new warehouse clubs[176]. - The company is enhancing its distribution and logistics network with new distribution centers planned in Trinidad, Colombia, and the Dominican Republic during fiscal year 2026[194]. - The company operated 56 warehouse clubs as of November 30, 2025, compared to 54 clubs a year earlier[199]. Financial Performance - Total revenues increased by 9.9% compared to the prior year period[199]. - Net merchandise sales rose by 10.6% year-over-year, reaching $1,353.8 million[203]. - Membership income increased by 15.9% to $23.4 million compared to the prior year[199]. - Adjusted EBITDA for the first quarter of fiscal year 2026 was $86.9 million, up from $79.1 million in the same period last year[200]. - Operating income increased by 8.0% to $62.9 million compared to the first quarter of fiscal year 2025[199]. - Comparable net merchandise sales increased by 8.0% for the thirteen weeks ended November 30, 2025[212]. - Total revenues for the three months ended November 30, 2025, were $1.38 billion, reflecting a 9.9% increase from $1.26 billion in the prior year[230]. Membership and Customer Engagement - The company has over 2 million membership accounts and 4 million cardholders, indicating strong customer engagement in its markets[166]. - Platinum Membership accounts increased to 19.3% of the total membership base as of November 30, 2025, up from 14.0% as of November 30, 2024, contributing to revenue growth[195]. - The number of member accounts increased by 6.7% year-over-year, reaching a total of 2,039,558 accounts as of November 30, 2025[223]. - Membership accounts for the Central America segment increased by 7.1%, contributing $13.5 million to membership income[223]. - The Colombian segment's membership income surged by 32.4% to $3.94 million, driven by currency appreciation and increased accounts[223]. Currency and Taxation - Approximately 80.9% of net merchandise sales in the first quarter of fiscal year 2026 were in currencies other than the U.S. dollar, highlighting exposure to currency fluctuations[179]. - The company experienced a 15% devaluation of the Colombian currency during fiscal year 2023, impacting its gross margin percentage[180]. - The company continues to monitor the impact of recent U.S. tax legislation, the One Big Beautiful Bill Act, on its operations and effective tax rate[187][188]. - In fiscal year 2023, the company recorded a $7.2 million charge to settle a minimum tax payment dispute due to changes in tax laws in one of its operating countries[189]. - The effective tax rate increased to 27.9% from 26.5% in the prior year, mainly due to non-recurring items[199]. Community and Philanthropy - PriceSmart is committed to improving community welfare, providing school supplies to approximately 140,000 children through its philanthropic initiatives[168]. Digital and Sales Channels - Digital channel sales in the first quarter of fiscal year 2026 reached $89.8 million, representing a 29.4% year-over-year increase and accounting for 6.6% of total net merchandise sales[196]. - Private-label sales under the "Member's Selection" brand represented 27.0% of total net merchandise sales in the first quarter of fiscal year 2026, down from 27.7% in the same period of fiscal year 2025[195]. Expenses and Cash Flow - Selling, general and administrative expenses rose by 12.9%, primarily due to technology investments and CEO compensation[199]. - Selling, general, and administrative expenses increased by $20.7 million, accounting for 13.1% of total revenues, up from 12.8% in the prior year[235]. - Net cash provided by operating activities was $71,245 million, an increase of $32,715 million from $38,530 million in the same period last year[256]. - Net cash used in investing activities totaled $90,267 million, a significant increase of $60,961 million compared to $29,306 million in the prior year[257]. - Capital expenditures for the three months ended November 30, 2025, were $38.6 million, with $20.1 million allocated for growth expenditures[260]. Shareholder Returns - The company declared an annual cash dividend of $1.26 per share, with $0.63 paid on February 28, 2025, and another $0.63 paid on August 29, 2025[259]. - The company expects to continue repurchasing shares related to employee stock awards at the prior day's closing price[265]. Risk Factors - The company faces risks from political instability, as seen with recent protests in Panama and Guatemala affecting access to warehouse clubs[181]. - The company has entered into financing transactions to provide its Trinidad subsidiary with additional U.S. dollar liquidity to meet operational needs due to ongoing foreign exchange illiquidity[190]. - The company’s tax returns are subject to routine reviews by taxing authorities, which may challenge interpretations used to calculate tax liabilities[269].