This article first appeared on GuruFocus .
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Total Revenue:Almost $1.5 billion for the third quarter.
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Net Merchandise Sales:Increased by 12.5% or 8.5% in constant currency for the third quarter.
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Comparable Net Merchandise Sales:Increased by 10.7% or 6.9% in constant currency for the third quarter.
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Average Sales Ticket Growth:5% increase year-over-year.
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Transactions Growth:7.1% increase versus the same prior year period.
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Gross Margin:Increased 20 basis points to 16% versus Q3 last year.
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Total Revenue Margin:Improved 30 basis points to 17.7% of total revenue.
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SG&A Expenses:Increased to 13.3% of total revenues from 13.2% in the prior year period.
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Operating Income:$65.6 million, a 16.7% increase from the same period last year.
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Net Income:$39.7 million or $1.28 per diluted share, a 12.3% increase from the prior year period.
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Adjusted EBITDA:$90.4 million, a growth of 14.5% from the same period last year.
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Cash and Cash Equivalents:$254.6 million at the end of the quarter.
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Membership Income:Increased 17.6% over the prior year period.
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12-Month Renewal Rate:90.5% as of May 31, a new all-time high.
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Digital Channel Sales:$99.6 million, up 26.2% year-over-year.
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Release Date: July 09, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Net merchandise sales increased by 12.5% year-over-year, reaching almost $1.5 billion for the third quarter.
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Membership accounts grew by 8.6% year-over-year, with a notable increase in Platinum membership sign-ups.
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Digital channel sales reached a record $99.6 million, up 26.2% year-over-year, indicating strong digital engagement.
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The company executed a lease for its first warehouse club in Chile, marking a significant expansion into a new market.
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Gross margin improved by 20 basis points to 16%, driven by better margins in the non-foods category.
Negative Points
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Total SG&A expenses increased slightly to 13.3% of total revenues, primarily due to higher warehouse club and operations costs.
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The company recorded a $10.5 million net loss in total other expenses, mainly due to foreign currency transaction costs.
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Operating income in Colombia declined despite a strong sales performance, impacted by increased warehouse expenses and policy changes.
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Trinidad's currency conversion issues persist, affecting pricing and requiring a premium on goods in the country.
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Preopening expenses in Chile contributed to a 10 basis point increase in SG&A expenses, impacting overall profitability.
Q & A Highlights
Q: David, could you discuss the approach to expanding into Chile compared to Colombia, given the differences in market size and GDP per capita? A: David Price, CEO: Chile and Colombia are quite different in terms of market size and GDP per capita. In Chile, we are focusing on building a strong local team and ensuring a mix of local and imported goods to provide a great value proposition. We aim to learn from past experiences in Colombia, where currency devaluation impacted our operations. We plan to start selling memberships several months before opening our first club in Santiago.
Q: Are locals in Chile familiar with membership clubs, and when will you start accepting memberships for the Santiago store? A: David Price, CEO: While there are no membership warehouse clubs in Chile, locals are familiar with subscription services like Uber One and Jumbo Prime. We plan to start selling memberships at least three months before opening the Santiago store, possibly earlier, as it's a new concept for the market.
Q: In the quarter, you reduced Trinidad balances significantly. Was this due to an opportunity, and can we expect more of this? A: Gualberto Hernandez, CFO: We sourced more US dollars in Trinidad this quarter, reducing our nonconverted cash. We remain strategic and opportunistic in sourcing dollars, and this will continue to fluctuate based on market availability.
Q: Why did operating income decline in Colombia despite strong comparable sales? A: Gualberto Hernandez, CFO: Operating income in Colombia was impacted by increased warehouse expenses and policy changes, including a reduction in allowable work hours without overtime. We are monitoring these factors closely.
Q: Are you seeing better conversion conditions for Trinidad dollars to US dollars, and will this affect pricing in Trinidad? A: Gualberto Hernandez, CFO: We are not seeing significant changes in conversion conditions. We continue to charge a premium to cover costs and are exploring ways to reduce our need for US dollars in Trinidad.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
