This article first appeared on GuruFocus .
-
Total Revenue:Almost $1.5 billion for the second quarter.
-
Net Merchandise Sales:Increased by 9.9% or 7.8% in constant currency for the second quarter.
-
Comparable Net Merchandise Sales:Increased by 7.6% or 5.5% in constant currency for the second quarter.
-
Average Sales Ticket Growth:2.2% increase year-over-year.
-
Transactions Growth:7.5% increase versus the same prior year period.
-
Gross Margin:Increased 50 basis points to 16.1% of net merchandise sales.
-
Operating Income:$75.4 million for the second quarter, a 15.6% increase from the same period last year.
-
Net Income:$49.1 million or $1.62 per diluted share, an increase of 11.7% from the previous year.
-
Adjusted EBITDA:$99.7 million for the second quarter, a growth of 14.6% from the previous year.
-
Membership Accounts:Grew 7.9% year-over-year to almost 2.1 million accounts.
-
Membership Renewal Rate:90.2% as of February 28th.
-
Cash Equivalents and Restricted Cash:$195.1 million at the end of the quarter.
-
Short-term Investments:Approximately $149.7 million.
-
Net Cash Provided by Operating Activities:$133.3 million for the first six months of fiscal year 2026.
-
Dividend:Annual cash dividend of $1.40 per share, an 11.1% increase over last year.
Release Date: April 09, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Pricesmart Inc ( NASDAQ:PSMT ) reported strong growth in the second quarter, with net merchandise sales increasing by 9.9% and total revenue reaching almost $1.5 billion.
-
Membership renewal rates reached an all-time high of 90.2%, indicating strong customer loyalty and satisfaction.
-
The company is expanding its footprint with new club openings in the Dominican Republic, Jamaica, Costa Rica, and Guatemala, enhancing its market presence.
-
Digital channel sales grew by 23.4% year-over-year, reflecting successful investments in omnichannel capabilities.
-
Gross margin improved by 50 basis points to 16.1%, driven by shifts in product mix and cost savings from Asia consolidation efforts.
Negative Points
-
SG&A expenses increased to 12.7% of total revenues, partly due to currency appreciation in Colombia and increased technology investments.
-
The company recorded an $8.7 million net loss in total added expense, primarily due to foreign currency-related losses.
-
Higher inventory balances led to a $9 million use of cash in operating activities, impacting cash flow.
-
There are potential macroeconomic challenges in Central America and the Caribbean due to dependency on remittances and oil imports.
-
The ongoing military conflicts and evolving trade policies pose risks to transportation costs and supply chain stability.
Q & A Highlights
Q: Is the process of obtaining permits and starting construction in Chile taking longer than expected? A: David Price, CEO, explained that while the media in Chile is very active, the process of obtaining permits is not taking longer than in other markets. The process is clear, and they announce openings only after permits are secured.
Q: Have there been any impacts from remittances or the situation in the Middle East on PriceSmart's operations? A: David Price, CEO, noted no visible changes in consumption due to remittances. Regarding the Middle East, while fuel costs have increased, there have been no major supply chain disruptions. The company remains vigilant and flexible to maintain a resilient supply chain.
Q: Can you elaborate on the drivers behind the higher gross margin and whether this is structural or temporary? A: Gualberto Hernandez, CFO, stated that the margin improvement is due to a shift in product mix, better margins in fresh categories, and savings from Asia consolidation efforts. These factors are contributing to the margin improvement.
Q: How is PriceSmart preparing for potential macroeconomic challenges in Central America and the Caribbean, particularly regarding remittances and oil imports? A: Gualberto Hernandez, CFO, mentioned that PriceSmart's member profile is less reliant on remittances, providing some natural protection. The company is focused on driving down supply chain costs to offer better value to members, which helps mitigate macroeconomic risks.
Q: What are the learnings from the Chile market, and why have some club openings been accelerated? A: David Price, CEO, emphasized the advanced nature of the Chilean market, with high-quality distribution and processing capabilities. The accelerated club openings are due to receiving permits earlier than expected, and the company is continuously learning to improve construction efficiency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
