Has the company seen any impact from changes in remittances? What are the supply chain implications of the Middle East conflict beyond fuel costs?

No visible changes in consumption due to remittances, as data shows stable flows and PriceSmart's members are less reliant on them. For the Middle East conflict, fuel costs are shifting, but no major supply chain disruptions have occurred yet, as merchandise is not routed through the Strait of Hormuz. The company is vigilant and flexible. “In terms of remittances, we haven't seen any visible changes in consumption as a result of changes in remittances. And in fact, the data has been fairly clear that the remittances are still flowing to the market at rates that are not that different from what has occurred in the past.”

Are the drivers of the higher gross margin structural or temporary, and will there be future investments?

The gross margin improvement is due to a mix shift towards higher-margin categories (fresh foods, nonfood hardlines/softlines) and initial cost savings from Asia consolidation efforts. These factors suggest a structural component, though specific investments were not detailed in this response. “We have benefited from a shift in mix by category. Foods went a little bit down in terms of sales participation versus fresh that has been up with better margins. ... We have started to benefit also from the Asia consolidation efforts, so there are savings in shipping costs, one route less as we are keeping the Miami -- saving in handling fees.”

How is PriceSmart preparing for potential macro challenges in Central America and the Caribbean, specifically regarding projected deceleration in remittances?

PriceSmart believes its member profile offers some natural protection as they are less reliant on remittances. Management emphasizes continuously driving down supply chain costs to offer better value, which helps protect against macro swings and drive market share. They are closely monitoring the situation. “We have some type of natural protection to that also because of the profile of our members that are less reliant on remittances. So that gives us some type of natural protection.”

PSMT

PriceSmart (PSMT) Q2 FY26 earnings call: the analyst Q&A

Earnings call· Feb 2026 (Q2 FY26)· Consumer Staples· Apr 9, 2026

Source: earnings call transcript

Executive summary

PriceSmart Q2 FY26 — Strong Sales Growth and Record Membership Renewal

PriceSmart delivered a strong second quarter, marked by broad-based sales growth and a record-high membership renewal rate, indicating strong member value perception. The company continues to invest in strategic initiatives including real estate expansion, supply chain transformation, and technology upgrades to enhance operational efficiency and future growth. While navigating currency volatility and macroeconomic pressures, management remains focused on driving value and expanding its footprint, particularly in new markets like Chile.

Highlights

Net merchandise sales increased by 9.9% (7.8% constant currency) to almost $1.5 billion.
Comparable net merchandise sales increased by 7.6% (5.5% constant currency).
Membership renewal rate reached an all-time high of 90.2%.
Platinum membership base grew to 19.5% of total, up from 14.5% last year.
Digital channel sales reached a record $94.1 million, up 23.4% YoY, representing 6.4% of total net merchandise sales.
Operating income increased 15.6% to $75.4 million and Adjusted EBITDA grew 14.6% to $99.7 million.

Concerns

SG&A expenses increased 30 basis points to 12.7% of total revenues, primarily due to Colombian peso appreciation, technology investments, and executive officer compensation.
Net loss in total other expense increased to $8.7 million from $5.1 million, mainly due to foreign currency-related losses from Costa Rican colon appreciation.
Higher overall inventory balances used $9 million of cash in operating activities.
Net cash used in investing activities increased by $89.9 million, primarily due to changes in short-term investments and property/equipment expenditures.

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Central America Segment had 32 clubs at quarter end. Contributed significantly to overall comparable sales growth. Club count: 32Comparable net merchandise sales growth: 4.7% (4% constant currency)Contribution to consolidated comparable net merchandise sales growth: 280 bps	—	8.6%	—	—
Caribbean Segment had 14 clubs at quarter end. Contributed positively to overall comparable sales growth. Club count: 14Comparable net merchandise sales growth: 4.2% (5.1% constant currency)Contribution to consolidated comparable net merchandise sales growth: 120 bps	—	4.3%	—	—
Colombia Segment had 10 clubs at quarter end. Growth driven by Colombian peso appreciation, member traffic, and merchandise offering strengthening. Largest contributor to consolidated comparable sales growth. Club count: 10Comparable net merchandise sales growth: 31.3% (14.7% constant currency)Contribution to consolidated comparable net merchandise sales growth: 360 bps	—	30.5%	—	—

PSMT operating KPIs by quarter

PSMT operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Feb 2026 Q2 FY26	May 2026 Q3 FY26	Change vs prior quarter
Warehouses Central America	32 First, in Central America, where we had 32 clubs at quarter end, net merchandise sales increased 8.6% or 7.8% in constant currency. Source: earnings call transcript	32 First, in Central America, where we had 32 clubs at quarter end, net merchandise sales increased 10.6% or 7.7% in constant currency. Source: earnings call transcript	0%
Warehouses Caribbean	14 Second, in the Caribbean, where we had 14 clubs at quarter end, net merchandise sales increased 4.3% or 5.3% in constant currency. Source: earnings call transcript	15 Second, in the Caribbean, where we had 15 clubs at quarter end, net merchandise sales increased 6.8% or 6.2% in constant currency. Source: earnings call transcript	+7.1%
Warehouses Colombia	10 Last, in Colombia, where we had 10 clubs open at the end of our second quarter, net merchandise sales increased 30.5% or 13.8% in constant currency. Source: earnings call transcript	10 Last, in Colombia, where we had 10 clubs at quarter end, net merchandise sales increased 35.3% or 18.6% in constant currency. Source: earnings call transcript	0%
Membership renewal rate	90.2% Membership accounts grew 7.9% year-over-year to almost 2.1 million accounts with a strong 12-month renewal rate of 90.2% as of February 28. Source: earnings call transcript	90.5% Our 12-month renewal rate was 90.5%, as of May 31, a new all-time high for the second consecutive quarter and a result that we're really proud of. Source: earnings call transcript	+0.3 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Capital programs

La Romana Warehouse Club nearing completion

Benefit:sixth warehouse club in the Dominican Republic

New club opening in La Romana municipality, incorporating sustainable design practices (solar panels, CO2 refrigeration, energy management) to reduce operating costs.

Montego Bay Warehouse Club, Jamaica under construction

Benefit:new club in Jamaica

Construction progressing well, expected to open in summer 2026.

South Camp Road Warehouse Club, Kingston, Jamaica under construction

Benefit:new club in Jamaica

Construction progressing well, expected to open in winter 2026.

Ciudad Quesada Warehouse Club, Costa Rica underway

Start: Q2 FY26

Benefit:tenth warehouse club in Costa Rica, 6-acre property

Land purchased in Q2 FY26 for a new club approximately 47 miles northwest of San Jose.

Villa Nueva Warehouse Club, Guatemala underway

Start: Q3 FY26

Benefit:eighth warehouse club in Guatemala, 5-acre property

Land leased in Q3 FY26 for a new club approximately 13 miles south of Guatemala City. Initial earthworks begun, pending remaining permits.

Portmore, Jamaica Warehouse Club Expansion and Remodel underway

Start: FY26

Warehouse club and parking lot expansion and remodel to begin in fiscal year 2026.

Barbados Warehouse Club Expansion and Remodel underway

Start: FY26

Warehouse club and parking lot expansion and remodel to begin in fiscal year 2026.

Trinidad Distribution Center completed

Benefit:new distribution center

Began operations during the second quarter.

Colombia Distribution Center underway

Benefit:new distribution center

Planned to open during fiscal year 2026.

Jamaica Distribution Center underway

Benefit:new distribution center

Planned to open during fiscal year 2026.

Dominican Republic Distribution Center planned

Benefit:new distribution center

Planned to open during fiscal year 2027.

Relax Forecasting and Replenishment Platform underway

Benefit:improved forecasting, product availability, operational efficiency

On track to complete full implementation in fiscal year 2026. U.S.-sourced inventory procurement process onboarded, now focusing on local goods.

E2open Global Trade Management Platform underway

Benefit:enhanced automation, compliance, controls across global import/export operations, improved data visibility, scalable international growth

Advanced multiphase implementation during Q2 FY26.

ELERA Point-of-Sale System underway

Start: Q1 FY26

Benefit:faster checkout times, improved productivity, expanded payment options

Completed implementation across all English-speaking Caribbean markets in Q1. Testing in Central America and rolling out to Spanish-speaking markets.

Workday Human Capital Management System underway

Benefit:enhanced employee experience, improved processes, strengthened compliance, scalable integrated data layer

Furthered implementation in Q2, expected to go live by end of Q3 FY26.

Risks & headwinds

Currency volatility Q2 FY26

significant appreciation of the Costa Rica colon in February led to $8.7 million net loss in total other expense

Mitigation:actively exploring options to expand our hedging program in select markets

Evolving trade policy and tariffs ongoing

U.S. import tariffs do not apply to most of our merchandise

Mitigation:consolidate international products through Miami DC (shipped in bond), leverage free trade agreements, ship direct to market using expanding DC network and China consolidation capabilities

Military conflict with Iran and Strait of Hormuz situation ongoing

potential impacts to transportation costs or delays in shipment/delivery; simulations run indicate 'smaller impacts in terms of financials, but nothing really material'

Mitigation:monitoring, ensuring resilient supply chain, diversifying product procurement

Increased fuel prices ongoing

significant component of transportation cost

Mitigation:monitoring, ensuring continued value to members; no major supply chain disruptions yet

Reduced consumer demand due to increased fuel prices ongoing

may reduce consumer demand impacting frequency and purchasing power

Mitigation:monitoring, ensuring continued value to members

Vendor/raw material supplier disruptions ongoing

adversely impacted ability to source product

Mitigation:building a more resilient and diverse supply chain

Potential deceleration in remittances 2026

central banks projecting deceleration for 2026

Mitigation:member profile less reliant on remittances, continuously driving down supply chain costs to offer better value, monitoring closely

What to watch in Q3 FY26

Workday HCM System Go-Live

end of Q3 FY26

Current Implementation advanced in Q2

Target Go live by end of Q3 FY26

Why it matters

Successful implementation is expected to enhance employee experience, improve processes, strengthen compliance, and provide scalable data for future growth.

Also in the second quarter, we furthered implementation of Workday's human capital management system to replace legacy HR applications and expect to go live by end of the third quarter.

Find out whether PSMT delivers this. Inve re-checks your case every morning.

Q&A highlights

Is the Chile entry taking longer than expected due to permits/construction, given media reports?

Management stated that the process is not taking longer than other markets and is clearer institutionally. They are conservative in announcing openings until permits are in hand. Media in Chile is very active and often publishes unvalidated information.

“We haven't seen that things are taking any longer necessarily than any other market. The process actually compared to some of our other markets is better in the sense that it's much more clear, in terms of the quality of the institutions and the steps that you have to go through to get permits.”

asked by Jon Braatz · answered by David Price

2 min read 7 chapters

Detailed narrative

Strong Q2 Performance and Membership Engagement

PriceSmart reported robust second-quarter results with net merchandise sales reaching almost $1.5 billion, up 9.9% (7.8% constant currency). Comparable net merchandise sales grew 7.6% (5.5% constant currency). The company achieved an all-time high 12-month membership renewal rate of 90.2% and saw its Platinum membership base expand to 19.5% of total accounts, reflecting strong member value perception and loyalty.

Strategic Expansion and Real Estate Development

The company is actively expanding its physical footprint, with a sixth club opening in La Romana, Dominican Republic, early next month. Two clubs are under construction in Jamaica (Montego Bay and Kingston, expected Summer and Winter 2026 openings). Land was purchased for a tenth club in Costa Rica (Ciudad Quesada, anticipated Summer 2026 opening) and leased for an eighth club in Guatemala (Villa Nueva, anticipated Spring 2027 opening).

These additions will bring the total club count to 61.

Chile Market Entry Progress

PriceSmart continues to prioritize its entry into Chile, having signed executory agreements for two prospective club sites and actively pursuing more. The company has hired a country General Manager and local team, established a central office, and is building procurement and logistical infrastructure. Management noted the Chilean market's sophistication in consumer behavior and supply chain, expressing confidence in their value proposition.

Supply Chain and Technology Transformation

Significant investments are underway to enhance supply chain efficiency and technological capabilities. New distribution centers are opening in Trinidad (already operational), Colombia, Jamaica (FY26), and Dominican Republic (FY27). The company completed implementing third-party distribution centers in China for consolidation and is on track to complete the Relax forecasting and replenishment platform implementation in FY26.

E2open global trade management platform is also being implemented for automation and compliance.

Omnichannel Growth and Digital Enhancements

Digital channel sales reached a record $94.1 million, growing 23.4% year-over-year and representing 6.4% of total net merchandise sales. Over 74% of members have online profiles, and more than one in four have made a digital purchase. The company is migrating its mobile application to native architectures for improved speed and reliability and rolling out a new ELERA point-of-sale system across markets, which is showing faster checkout times and expanded payment options.

Private Label and Value Proposition

Private label penetration increased 50 basis points in the first half of FY26, reaching 26.6% of total merchandise sales. This strategy aims to offer high-quality products at lower prices, improve margins, and provide leverage with national brand suppliers. Recent price reductions on key commodities like olive oil (31.5%), frozen french fries (8.9%), and mozzarella cheese (5.8%) demonstrate the company's ability to pass savings to members.

Tariff and Geopolitical Impact Assessment

Management clarified that U.S. import tariffs generally do not apply to most of their merchandise due to consolidation through Miami and free trade agreements, thus no refund is expected from the recent Supreme Court ruling. The company is monitoring the military conflict with Iran for potential impacts on transportation costs or supply chain disruptions, though no major disruptions have occurred to date.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.