PriceSmart Inc (PSMT) 2026 Q1 法說會逐字稿

Good afternoon everyone and welcome to PriceSmart Inc's earnings release conference call for the first quarter of fiscal year 2026, which ended on November 30, 2025. After remarks from our company's representatives, David Price, Chief Executive Officer, and Gilberto Hernandez, Chief Financial Officer, you will be given an opportunity to ask questions as time permits.

As a reminder, this conference call is limited to one hour and is being recorded today, Thursday, January 8, 2026.

A digital replay will be available shortly following the conclusion of the call through January 15, 2026 by dialing 1-800-770-2030 for domestic callers or 1-647362. 9,199 for international callers and entering replay access code GBP5,898,084.

For opening remarks, I would like to turn the call over to Price March's Chief Financial Officer, Gilberto Hernandez. Please proceed, sir.

Thank you, operator, and welcome to PriceSmart Inc.’s earnings call for the first quarter of fiscal year 2026, which ended on November 30, 2025. We will be discussing the information that we provided in our earnings press release and our thank you, which were both released yesterday on January 7, 2026.

Also, in these remarks, we refer to non-GAAP financial measures. You can find a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures in our earnings press release and our thank you. These documents are available on our investor relations website at investors.pricemark.com where you can also sign up for email alerts.

As a reminder, all statements made on this conference call, other than statements of historical fact, are forward-looking statements concerning the company's anticipated plans, revenues, and related matters. Forward-looking statements include, but are not limited to, statements containing the words expect, believe, plan, will, may, should, estimate, and some other expressions.

All forward-looking statements are based on current expectations and assumptions as of today, January 8, 2026.

These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks detailed in the company's most recent annual report on Form 10-K, the quarterly report on Form 10-Q filed yesterday, and other filings with the SEC which are accessible on the SEC's website at www.sec.gov.

These risks may be updated from time to time. The company undertakes no obligation to update forward-looking statements made during this call. Now I will turn the call over to David Price PriceSmart’s Chief Executive Officer.

Thank you, Gualberto, and good morning everyone.

Thank you for joining us today. I want to begin by expressing my gratitude to our employees across all the regions where we operate. This first quarter through December represents our peak season, our most demanding period, and our teams rose to the challenge.

From our clubs to our distribution centers to our offices across all of our countries, every part of our organization contributed to our success. Their execution was outstanding. Their dedication and commitment to serving our members continues to be the foundation of our success.

It is a pleasure to be back with you for my second earnings call as CEO. I am now about 128 days into the role and I have spent this time visiting clubs, distribution centers and offices across our markets.

What strikes me most is the strength of our culture. Teams across 13 countries united by a commitment to doing the right thing for our members and their communities. This foundation, combined with the opportunities ahead, gives me great confidence in our future. I'm energized by what we can accomplish together.

I am pleased to share that we delivered strong results across our key performance areas. Our membership growth, solid sales performance, and continued operational discipline reflect both resilient consumer demand and the outstanding execution by our teams.

Now I'd like to highlight some of our sales results for the first quarter. Net merchandise sales and total revenue reached almost $1.4 billion during the first quarter. Net merchandise sales increased by 10.6% or 9.5% in constant currency. Comparable net merchandise sales increased by 8% or 6.9% in constant currency.

During the first quarter, our average sales ticket grew by 2.1% and transactions grew 8.4% versus the same prior year period. The average price per item increased 1.8% year over year, while average items per basket remained relatively flat.

First, in Central America, Where we had 32 clubs at quarter end, net merchandise sales increased 9.6% or 9.2% in constant currency. Comparable net merchandise sales increased 5.4% or 5.1% in constant currency. All of our markets in Central America have positive comparable net merchandise sales growth.

Our Central America segment contributed approximately 320 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the first quarter.

Second, in the Caribbean, where we had 14 clubs at quarter end, net merchandise sales increased 5.7% or 7.8% in constant currency.

Comparable net merchandise sales increased 5.6% or 7.7% in constant currency. All of our markets in the Caribbean had positive comparable net merchandise sales growth. Our Caribbean region contributed approximately 160 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the first quarter.

Last, in Colombia, where we had 10 clubs open at the end of our first quarter, net merchandise sales increased 27.8% or 15% in constant currency. Comparable net merchandise sales increased 27.9% or 14.7% in constant currency. Colombia contributed approximately 320 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter.

In terms of merchandise categories, when comparing our first quarter sales to the same period in the prior year, our foods category grew approximately 11.3%. Our non-foods category increased approximately 7.2% and our food service and bakery category increased approximately 10.1%, and our health services, including optical, audiology and pharmacy, increased approximately 17.8%. Membership accounts grew 6.7% year over year to over 2 million accounts with a strong 12 month renewal rate of 89.3% as of November 30.

A key focus of our membership strategy is growing platinum memberships. Platinum is a premium tier designed for our most engaged members. These members receive an annual cashback reward on eligible purchases, which drives loyalty, increases purchasing frequency, and rewards their continued business with us.

By focusing on platinum growth. We are investing in our highest value member relationships. As of November 30, latinum accounts represented 19.3% of our total membership base, up from 14% in the same period last year.

This growth reflects our targeted promotional campaigns and increased focus on the segment. Membership income as a percentage of revenue increased to 1.7% compared to 1.6% in the prior year period, driven in part by the shift towards platinum membership.

These strong results reflect our team's execution and the strategic initiatives we have underway. Let me walk you through the progress we are making across real estate expansion, supply chain transformation, and technology investments that are enhancing our ability to serve our members.

In the third quarter of fiscal year 2025, we purchased land for our 6th warehouse club in the Dominican Republic in La Romana. That's about 73 miles east of our nearest club in Santo Domingo. The club will be built on a 5 acre property and is expected to open in spring 2026.

In Jamaica, we are expanding from two clubs to four. In the first quarter of fiscal year 2026, we purchased land in Montego Bay for our third club, and that is about 100 miles west of Kingston. This will also be a 5 acre site anticipated to open in fall 2026.

Also in the first quarter of fiscal year 2026, we finalized the land lease for our fourth Jamaica Club on South Camp Road. That's about six miles from our existing Kingston Club. This will be a three acre property also anticipated to open in winter 2026.

The opening timeline for our Jamaica clubs has been adjusted as we address operational disruptions caused by Hurricane Melissa and support recovery efforts across the island. I'm pleased to report that our existing clubs in Kingston and Port Moore weathered the storm well and were back serving members almost immediately. We do not anticipate any further delays to our new club openings at this time.

In addition, in the second quarter of fiscal year 2026, we purchased land for our tenth warehouse club in Costa Rica in Ciudad Quezada. That is approximately 47 miles north from our nearest club in Costa Rica. The club will be built on a six acre property and is anticipated to open in fall 2026.

Once these four new clubs are opened, we will operate 60 warehouse clubs in total. We are advancing on our plans to enter Chile, a market we believe offers strong potential for multiple PriceSmart warehouse clubs. As part of this initiative, as we've hired a country general manager and signed executory agreements for two perspective club sites.

While we haven't announced target opening dates, we're moving quickly and managing key factors that influence time, such as permitting and construction.

In addition to opening new clubs in existing markets in Chile, we're continuing to optimize our current footprint. Increasing club size, improving efficiency, and expanding parking spaces at high volume locations remain some of the most effective ways to drive sales and enhance the member experience. To support this strategy, we will begin warehouse club and parking lot expansion and remodels in fiscal year 2026 in Port Moore, Jamaica, and Barbados.

Now turning to our supply chain transformation strategy. One of the key drivers in keeping prices low is improving how we move and distribute merchandise to our clubs. Today, we operate major distribution centers in Miami, Costa Rica, Panama and Guatemala.

During the first quarter, we successfully adapted our Panama facility to handle cold merchandise and began operations of a new distribution center in Guatemala. We now plan to open distribution centers in Trinidad, Colombia, and the Dominican Republic during fiscal year 2026.

Our goals with these distribution centers are to improve product availability, reduce lead times, and lower landed costs, among other efficiency gains. Alongside these new distribution centers, we have begun implementing third-party distribution centers in China to consolidate merchandise source in the country, driving greater efficiency and lower cost.

In select countries, we have also introduced our own fleet of trucks to deliver merchandise directly to our clubs and capitalize on backhaul opportunities. We continue to advance our migration to the relax forecasting and replenishment platform, and we remain on track to complete the full implementation of the fiscal year 2026.

This upgrade is a critical part of our supply chain strategy and is expected to boost productivity, improve inventory management, and increase in-stock availability, ultimately driving sales growth and operational efficiency.

During the first quarter, we advanced our multi-phase implementation of the E2 0 global trade management platform designed to enhance automation, compliance, and controls across global import and export operations. We believe this platform will strengthen trade compliance, improve data visibility, and support scalable international growth once fully implemented.

Turning now to other ways we're enhancing membership. For the first three months of fiscal year 2026, private label sales represented 27% of total merchandise sales, down 70 basis points from the same period last year. This was impacted by a reclassification of the produce category, and on a comparable basis, we would have had a 70 basis point increase in penetration of our private label.

Our private label brand member selection is a cornerstone of our strategy. What makes our private label program unique is that we develop products both centrally through our US buying team and locally through our country-based buyers. This development approach enables us to source private label products globally, regionally and locally, providing flexibility to deliver the best quality and value.

Together this allows us to offer member selection products that combine global scale and quality with local relevance. Private label serves multiple strategic purposes. It allows us to offer high-quality products at lower prices than national brands, driving member loyalty. It improves our margins, and it gives us leverage with national brand suppliers by providing a trusted alternative that keeps them competitive.

We are committed to growing this penetration through strategic product development.

For example, recent additions like organic maple syrup, aged scotch whiskey, and premium deli meats demonstrate our focus on delivering exceptional value across key categories. In the Dominican Republic, we have enhanced our co-branded consumer credit card with our new partner Banco Santa Cruz, which launched in November 2025.

This new agreement offers 6% cashback at Price Mart Clubs, adding even more value for our members in that market. We continue to invest in omni-channel capability to meet our members where they are. In the first quarter, digital channel sales reached $89.8 million up 29.4% year over year, representing 6.6% of total net merchandise sales.

This marks our highest digital contribution to date. Orders placed directly through our website or app grew 18.1%, with average transaction value up 10.1%. As of November 30, 73% of our members have created an online profile and 27.1% of our membership base has made a purchase on pricecemart.com or our app.

We see continued opportunity in this space and will keep investing to enhance the digital experience we offer our members. During the first quarter, we began migrating our mobile application to fully native iOS and Android architectures to enhance speed, reliability and accessibility.

This foundation will allow faster deployment of new features and help us deliver an outstanding member experience in our digital channels. Turning to technology investments that enhance both member and employee experience and operational efficiency.

In the first quarter, we completed implementation of our new point of sale system, Elera, a Toshiba product in all English speaking Caribbean markets.

Later in fiscal year 2026, we will begin rolling out this system in our Spanish speaking markets. Alera will help us achieve faster checkout times, improve productivity, and expand payment options, among other benefits.

Also in the first quarter we began implementing Workday's human capital management system to replace legacy HR applications. This upgrade is designed to enhance the employee experience with modern, user-friendly tools while improving processes and strengthening compliance. Additionally, the platform will provide scalable, integrated data to support our future growth.

Before I turn it over to Gilberto, I want to address a few additional topics. First, regarding US tariffs, approximately 50% of the merchandise we sell is sourced locally and regionally within Latin America.

The other half is sourced from the US, Europe, China, and globally. While we consolidate many of these products through our Miami distribution center, they are shipped in bond and are not nationalized in the United States. We also take advantage of free trade agreements where we can.

Additionally, we have been leveraging our expanding distribution center network and China consolidation capabilities to shift direct to market where feasible, further optimizing our supply chain. As a result, US import tariffs do not apply to most of our merchandise.

We continue to monitor the evolving trade policy environment, but to date current US tariff policy has not impacted our cost structure or business operations. We are also monitoring remittance flows to Latin America and the Caribbean. Remittances represent a significant portion of GDP in several of our markets, including Jamaica, Honduras, El Salvador, Guatemala, and Nicaragua.

While there has been reporting on changing remittance patterns from the US to the region, to date we have not seen changes in consumer demand or purchasing behavior in our clubs. We continue to watch this factor closely given its importance to the economies we serve.

In addition, over the weekend, there was major news out of Venezuela. We are alert and monitoring the situation closely. It's still very early to understand how this will evolve or what the implications might be for our business or for US companies operating in the region.

And lastly, I want to provide a preview of our holiday season performance. Comparable net merchandise sales for the nine week period ended December 28, 2025 grew 7.1% in US dollars and 5.4% in constant currency.

This represents solid performance as we continue to comp against increasingly strong prior year periods, though it does reflect the deceleration from our first quarter's growth rate. December specifically was impacted by several transitory factors. Government elections in Honduras created consumer uncertainty.

Panama's extended rainy season disrupted both traffic and logistics, and supply chain timing issues created out of stocks in several high volume food items, a situation we identified and are addressing.

Looking forward, we are encouraged by what we are seeing. Colombia continues to deliver strong momentum and we are seeing positive trends across many of our markets as we enter calendar 2026. With that, I will turn it over to Gualberto to walk you through the financial details.

Thank you, David. Continue with the income statement. Total gross margin for the quarter as a percentage of net merchandise sales remains strong and unchanged at 15.9% versus Q1 last year. Total revenue margins improved 30 basis points to 17.7% of total revenue from 17.4% in the same period last year.

This was mainly driven by the good results in membership renewals and platinum growth as mentioned before by David.

On overhead cost, total SG&A expenses increased to 13.1% of total revenues for the first quarter of fiscal year 2026 compared to 12.8% for the first quarter of fiscal year 2025. The 30 basis point increase is primarily related to our continued investments in technology.

And to the compensation of our Chief Executive Officer. During his tenure as our interim Chief Executive Officer from February 2023 to August 2025, Robert Price declined any compensation for his services. Operating income for the first quarter of fiscal year 2026 increased 8% from the same period last year to 62.9 million.

Below the operating income line in the first quarter of fiscal year 2026, we recorded a 7.2 million net loss in total other expense, almost unchanged from $7.3 million net loss in total other expense in the same period last year. The primary cause of our net loss in total other expense is due to foreign currency-related losses.

In terms of income tax, our effective tax rate for the first quarter of fiscal year 2026 came in at 27.9% versus 26.5% a year ago, primarily due to non-recurring items such as a tax contingency approval and foreign exchange rate fluctuations.

Finally, net income for the first quarter of fiscal year 2026 was $40.2 million or $1.29 per dilute share. Up from $37.4 million or $1.21 per diluted share in the first quarter of fiscal year 2025. Adjusted for the first quarter of fiscal year 2026 was $86.9 million compared to $79.1 million in the same period last year, a growth of 9.8%.

Moving on to our balance sheet, we ended the quarter with cash equivalents and restricted cash totaling $249.6 million plus approximately $114.2 million of short-term investments typically held in certificates of deposit.

When reviewing our cash balances, it is important to note that as of November 30, 2025, we have $80.2 million of cash equivalent and short-term investments denominated in local currency in Trinidad, which we could not readily convert into US dollars.

Turning to cash flow, net cash provided by operating activities reached $71.2 million for the first three months of fiscal year 2026, an increase of $32.7 million versus the prior year period.

The increase is primarily due to $18.7 million of overall net positive changes in our various operating assets and liabilities, mainly due to recoveries in our VAT receivables and increases in accrued platinum rewards, as well as improvements in working capital that contributed $10 million to the overall increase.

Net cash used in investing activities increased by $61 million for the first three months of fiscal year 2026 compared to the prior year, primarily due to a net increase in purchases, less proceeds of short-term investments of $39.8 million.

An $11.9 million increase in purchases of long-term investments. And a $10.4 million increase in property and equipment expenditures to support growth of our real estate footprint compared to the same three month period a year ago. Net cash used in financing activities in the first three months of fiscal year 2026 remained relatively flat compared to the same period a year ago.

In closing, we're pleased with our start to fiscal year 2026 and the momentum we're building. The investments we're making in real estate, supply chain infrastructure, and technology are positioning us for sustained growth.

Combined with our team's exceptional execution, we're confident in our ability to continue delivering value to our members and driving long-term performance. I will now turn the call over to the operator to take your questions. Operator, you may now start taking our first questions.

(Operator Instructions) Jon Braatz, Oppenheimer.

Good morning guys. Couple of questions, David, when you spoke a little bit about the December comps, you mentioned, some issues in Honduras and Panama in the supply chain, specifically when you look at Honduras and Panama, were there, were the comps positive, despite these issues in the month of December?

We usually don't share that level of detail, Jon, in terms of country by country, so I want to make sure I'm consistent. But in Honduras with the election, there was some front loading of purchasing in November leading up to the election, and we've seen a good recovery now that there's been an outcome of the election and And a definitive President and in Panama, we're well into the dry season and seeing okay results there as well, but I can't share that level of granularity with you.

Okay, so those basically those issues that you saw are behind you at this point.

Yeah, okay, good, and can you speak a little bit about Colombia? Colombia has been very strong for the last year, maybe, even more than a year, and cops have been, well in the double-digit area. Anything you can put your finger on as to, the strength there?

Sure, thanks for the question. So a couple of different things, I mean, both kind of internal and external factors, starting with the external. I think that the strength of the peso certainly helps, the merchandise mix there, we have, more local items than in other markets, but, the being when things are when we're under 4,000 to 1 on the peso, that definitely helps not only purchasing power but also consumer sentiment. I think confidence. It's in the market from the consumer standpoint. In addition, we have, I have to just give credit to the team. We have an excellent team both in buying and operations there and it's really, there's some great items coming out of Colombia, even some that we're starting to export to other markets. So the item development both locally and then in terms of the imports also is driving nice differentiation.

I I I know it's you spoke a little bit about the issues in Venezuela and. Are there, what kind of problems might Colombia face if there's, sort of a migration, and, from Venezuela, additional migration from Venezuela to Colombia, it does that put economic pressure, what kind of economic pressure might that, place on, Colombia?

Mr. Braatz, your line is open. Yes.

David, I was just going to ask you, all the issues that we're seeing in Venezuela, could some of the, could there be pressure on the Colombian economy if, there's, more migration, from, of people from Venezuela to Colombia? Can that put any pressure on the economy?

It's, I don't want to speculate, Jon, the diaspora's been going on for a long time, and there's been Venezuelan migration all over the region, and so, I want to be careful not to speculate on something I really don't have any data to share on, but, from what we're seeing, consumer demand is strong in Colombia and we have a good brand position.

Okay, thank you. And one last question. If I saw it correctly, at the end of the fiscal 2025, you had about $60 million in, US dollars, in Colombia, I mean in Trinidad. And at the end of the first quarter you have $80 million. Why the increase from $60 million to $80 million in the first quarter?

Hi Jon, this is Gualberto. How are you?

Thank you for the question. Trinidad, as is something we're looking carefully and there's a lot of fluctuations in the availability of US dollars. There's no specific reason. It's a little bit of high season now after, Christmas, so there is more cash in our, on our side, and it's a bit more difficult to cover everything, but we don't see any material changes in the conditions there. It continues to be difficult. I wouldn't say it's more difficult than before. And it just fluctuates depending on on the availability of dollars as in the market in every month but nothing particular to highlight there.

Yeah, okay.

Thank you.

Thank you, Jon.

Hector Mayer, Scotiabank.

Hi David, Alberto, happy New Year. Thank you very much for talking.

Happy New Year. Happy New Year.

Thank you for taking my questions up on Chile, very quick, it is really nice to hear that you are moving quick on certain important steps. Usually permits tend to be, tend to take a bit of time, so that is nice to hear. But what have you learned so far from the market or potential competition? And are there any surprises or takeaways or things that you were not expecting maybe in Chile and on Colombia, with a good momentum there, how sustainable do you think is, the revenue growth that we are seeing in the country and how concerned are you are you about the minimum wage hikes in the country or what effects do you expect from that?

Okay, let me take the first one with Chile. I wouldn't say there's anything necessarily that has surprised us, but I will say, Chile, of course, is a very competitive market and highly digitalized, with a high expectation from the consumer. It's also very open from the standpoint of free trade agreements, and so there are a lot of imports as well. There are no club models in Chile. There are myorista models, as that are kind of more like the Atacada kind of Brazil, type wholesale model, but nobody doing what we do, so we operate in other competitive markets and so we feel optimistic.

And in terms of Colombia, in terms of minimum wage, I don't want to comment on in terms of, it's a sovereign country making its own policy decisions, but we don't have any sort of issue there because we aim to pay a living wage in every market and pay above minimum wage if where that doesn't align with a living wage and so that's kind of our approach and we want to be, have our pay. Compensation benefits be one of the differentiators from the standpoint of who we employ. I mean that's a really important part of our philosophy as as a business is being an employer of choice and so I don't anticipate any any issue in in Colombia as a result of that and in terms of future looking, I can't.

Comment on future growth, but as I mentioned to Jon, we're feeling confident in terms of our results in Colombia and, the brand position in the market, as well as our product mix and what we're able to offer.

Yeah, absolutely, I mean, to complement that, our operations in Colombia are growing more and more efficient, so we're confident on our abilities to be successful and to have the right to win in the market. But, as you of course understand, there are a lot of macroeconomic and political elements that we don't come from.

Excellent to hear. Thank you very much on that. And also, on warehouse and parking expansions and remodeling, just how much opportunity or boost in operations are you expecting from this by country or by region, and where do you see the most potential here?

Well, I can't share by region or by by country or club, but I can tell you that. When we do warehouse expansions, remodels, or parking expansions, it helps on several fronts. I mean, first and foremost, it's helping our members. In the case of the parking, we have the good problem of having busy locations and so when we offer more parking, it helps our members get in and out quicker, but also enables us, if there's better flow to turn spaces a little faster, which can help.

And then in terms of the. Sales for it helps from an efficiency standpoint and then of course also in terms of selling pilot positions which is helpful as well both in terms of items but also in terms of show stock and availability on the floor so you know I can't mention beyond that but you know there are various factors that drive where we select to do this and also how it how it impacts and so far we've been happy with the results where we've pursued remodels in the parking lot expansions.

Perfect. Very helpful. Thank you. Thank you very much, and again, happy New Year. Congratulations. Thank you.

Thanks Hector. I appreciate it.

That concludes our question-and-answer session. I will now turn the call back over to Gualberto Hernandez for closing remarks.

Thank you, operator, and thank you everybody for joining the call today. Happy new year to everybody and looking forward to our next call. Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.