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    PSMT
    Earnings call· May 2026(Q3 FY26)

    PRICESMART Q3 FY26 earnings call PSMT

    Jul 9, 2026 Source

    Executive summary

    PriceSmart Q3 FY26 — Strong Membership Growth and Chile Expansion

    PriceSmart delivered strong Q3 FY26 results, driven by robust membership growth and increasing digital engagement, despite navigating global macroeconomic pressures and currency volatility. The company is strategically expanding its physical and digital footprint, with significant investments in new markets like Chile and ongoing supply chain optimization, positioning it for continued long-term growth and enhanced member value.

    Highlights

    5

    • Net merchandise sales increased by 12.5% (8.5% in constant currency) to almost $1.5 billion.

    • Comparable net merchandise sales increased by 10.7% (6.9% in constant currency).

    • Membership accounts grew 8.6% year-over-year to over 2.1 million, with membership income up 17.6%.

    • 12-month renewal rate reached a new all-time high of 90.5%.

    • Digital channel sales reached a record $99.6 million, up 26.2% year-over-year, representing 6.9% of total net merchandise sales.

    Concerns

    4

    • Foreign currency transaction costs resulted in a $10.5 million net loss in total other expense, up from $7.2 million in the prior year.

    • Inventory balances are trending higher, consuming $9 million of cash in operating activities.

    • Warehouse club and other operational costs increased to 9.7% of total revenue, primarily due to expenses supporting the Chile launch.

    • Operating income in Colombia declined despite comp sales, due to a mix of higher warehouse expenses and policy changes impacting labor costs.

    Guidance & targets

    5
    CategoryTargetConfidence
    Capital expenditures for Chile expansion
    $100 million
    high materiality
    High
    Distribution center opening
    Jamaica DC
    medium materiality
    High
    Distribution center opening
    Dominican Republic DC
    medium materiality
    High
    Distribution center relocation and consolidation
    Miami cold regional distribution center into existing Miami regional drive facility
    medium materiality
    High
    RELEX forecasting and replenishment platform implementation
    complete the full implementation
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Central America
    This segment contributed significantly to the overall comparable net merchandise sales growth.
    Constant currency net merchandise sales growth: 7.7%Comparable net merchandise sales growth: 7.9%Constant currency comparable net merchandise sales growth: 5.2%Clubs at quarter end: 32Contribution to consolidated comparable net merchandise sales growth: 480 bps
    		—10.6%——
    Caribbean
    This region showed steady growth and contribution to consolidated comparable sales.
    Constant currency net merchandise sales growth: 6.2%Comparable net merchandise sales growth: 6.2%Constant currency comparable net merchandise sales growth: 5.6%Clubs at quarter end: 15Contribution to consolidated comparable net merchandise sales growth: 170 bps
    		—6.8%——
    Colombia
    Strong growth driven by Colombian peso appreciation and operational/market impacts. This segment also saw strong Platinum membership sign-ups.
    Constant currency net merchandise sales growth: 18.6%Comparable net merchandise sales growth: 35.7%Constant currency comparable net merchandise sales growth: 18.9%Clubs at quarter end: 10Contribution to consolidated comparable net merchandise sales growth: 420 bps
    		—35.3%——

    Operational metrics

    36
    Adjusted EBITDA
    $90.4 million14.5% growth
    Q3 FY26

    Compared to $79 million in the same period last year.

    Adjusted EBITDA
    $277 million13% growth
    9 Months FY26

    Compared to $245.1 million in the same period last year.

    Cash, Cash Equivalents and Restricted Cash
    $254.6 million
    Q3 FY26 end (May 31, 2026)

    null

    Short-term Investments
    $113.7 million
    Q3 FY26 end (May 31, 2026)

    Typically held in certificates of deposit.

    Non-convertible cash in Trinidad
    $44.1 million
    Q3 FY26 end (May 31, 2026)

    Cash, cash equivalents, and short and long-term investments denominated in local currency in Trinidad, which could not be converted into U.S. dollars.

    Net Cash Provided by Operating Activities
    $192.2 millionincrease of $13.1 million
    9 Months FY26

    The increase was primarily driven by a $17.5 million increase in net income without noncash items and $4.6 million of overall net positive changes in other various operating assets and liabilities, partially offset by sales in working capital, mainly due to higher overall inventory balances.

    Net Cash Used in Investing Activities
    increased by $93.3 millionvs prior year
    9 Months FY26

    Partially offset by a $6.2 million increase in proceeds from disposals of property and equipment and $1.1 million of cash received from a joint venture dissolution.

    Net Cash Used in Financing Activities
    increased by $4.9 millionvs prior year
    9 Months FY26

    Partially offset by a $20.3 million increase in proceeds from long-term bank borrowings, net of repayments.

    Average Sales Ticket Growth
    5%YoY
    Q3 FY26

    Compared to the same prior year period.

    Transactions Growth
    7.1%YoY
    Q3 FY26

    Compared to the same prior year period.

    Average Price Per Item Increase
    6%YoY
    Q3 FY26

    null

    Average Items Per Basket
    decreased 1%YoY
    Q3 FY26

    null

    Net Merchandise Sales
    $4.3 billionincreased by 11%
    9 Months FY26

    Total revenue was almost $4.4 billion for the same period.

    Comparable Net Merchandise Sales
    increased by 8.8%YoY
    9 Months FY26

    null

    Comparable Net Merchandise Sales
    increased 11.2%YoY
    8 weeks ended April 26, 2026

    This period captures Simonasanca in both years for a cleaner comparison.

    Foods Category Sales Growth
    12.5%YoY
    Q3 FY26

    Compared to the same period in the prior year.

    Non-Foods Category Sales Growth
    12.3%YoY
    Q3 FY26

    Improved sales performance after reconfiguring sales floor and warehouse club layouts.

    Food Service and Bakery Category Sales Growth
    12.6%YoY
    Q3 FY26

    null

    Health Services Category Sales Growth
    14.3%YoY
    Q3 FY26

    null

    Membership Income as % of Revenue
    1.7%consistent year-over-year
    Q3 FY26

    Indicative of a resilient membership base.

    Platinum Accounts as % of Total Membership
    21.3%up from 16.1% in the same period last year
    May 31, 2026

    Platinum upgrades have been a significant contributor to membership income growth.

    Private Label Penetration
    26.7%increased 40 basis points
    9 Months FY26

    Reflects continued progress toward the long-term goal of growing this part of the business, on a comparable basis, excluding a reclassification.

    Online Profile Creation by Members
    75.8%
    May 31, 2026

    Percentage of members who had created an online profile.

    Members Making Online Purchase
    27.1%
    May 31, 2026

    Percentage of members who had made a purchase through pricesmart.com or the app.

    Average Digital Transaction Value Growth
    4.4%up
    Q3 FY26

    For orders placed directly through the website or app.

    Gross Margin
    16%increased 20 basis points
    Q3 FY26

    Strategy remains identifying cost savings and operational efficiencies and passing them to members.

    Total Revenue Margins
    17.7%improved 30 basis points
    Q3 FY26

    From 17.4% in the same period last year.

    SG&A Expenses
    13.3%increased slightly
    Q3 FY26

    Compared to 13.2% for the third quarter of fiscal year 2025. Fluctuation due to timing of necessary investments.

    Warehouse Club and Other Operational Costs
    9.7%increased from 9.6%
    Q3 FY26

    Of total revenue, compared to the same period last year.

    General and Administrative Expenses
    3.5%decreased to 3.5%
    Q3 FY26

    Of total revenue, compared to 3.6% in the same period last year.

    Operating Income
    4.4%vs 4.3% in prior year period
    Q3 FY26

    Operating income increased 16.7% from the same period last year to $65.6 million.

    Operating Income
    4.7%vs 4.6% in prior year period
    9 Months FY26

    Operating income for the first 9 months of fiscal year 2026 increased 13.5% from the same period last year to EUR 204 million.

    Net Loss in Total Other Expense
    $10.5 millionincrease from $7.2 million net loss in Q3 FY25
    Q3 FY26

    null

    Effective Tax Rate
    28%decreased slightly to 28%
    Q3 FY26

    Compared to 28.4% for the third quarter of fiscal year 2025.

    Effective Tax Rate
    27.4%almost in line at 27.4%
    9 Months FY26

    Compared to 27.3% for the comparable prior year period.

    Comparable Net Merchandise Sales
    up 11.2%YoY
    4 weeks ended June 28, 2026

    Preview of current fourth quarter sales.

    Industry KPIs

    8
    MetricValueDetails
    Sg a rate13.3%%
    Gross margin drivers16%%
    Membership economics2.1 millionaccounts
    Warehouse store club count57clubs
    Comparable same store sales10.7%%
    E commerce digital sales growth26.2%%
    Private label own brand penetration26.7%%
    Category level comps and inflation deflation—

    Capital programs

    13
    Chile Warehouse Clubs & Central Officesunderway$100 million
    Start: Q3 FY26

    Benefit: first 3 warehouse clubs and central offices

    This represents the first phase of investment in the new Chilean market, with potential for future phases. The first club is anticipated to open in spring 2027 in ComunaLasconnes, Santiago.

    11th Club in Costa Ricaunderway
    Start: Q4 FY26

    Benefit: new warehouse club on a 6-acre property

    Located in Santo Tomas de Santo Domingo in the Aledia province, approximately 4 miles east from the nearest club in Adia, addressing traffic congestion and high consumer demand.

    Warehouse and Parking Lot Expansions/Remodelingunderway
    Start: fiscal 2026

    Benefit: expansions and remodeling projects for via Brazil, Panama and Barbados clubs

    Planned for existing clubs.

    Colombia Distribution Centercompleted
    Start: Q3 FY26

    Benefit: new distribution center in Bogota

    Strategic location to take advantage of local production concentration, underscoring Colombia's significance.

    Jamaica Distribution Centerplanned

    Benefit: new distribution center in Jamaica

    Part of supply chain optimization.

    Dominican Republic Distribution Centerplanned

    Benefit: new distribution center in the Dominican Republic

    Part of supply chain optimization.

    Miami Cold Regional DC Relocation/Consolidationplanned

    Benefit: consolidate into existing Miami regional drive facility

    Aims to better leverage space, reduce redundancy, and improve efficiency.

    Third-Party Distribution Centers in Chinacompleted
    Start: Q2 FY26

    Benefit: consolidate merchandise sourced in the country, reduce landed cost and lead times

    Helped reduce landed cost and lead times through direct shipments from Asia to local markets.

    RELEX Forecasting and Replenishment Platform Implementationunderway

    Benefit: improved forecasting and replenishment

    Completed onboarding of U.S.-sourced inventory procurement process, now focused on local goods procurement. Timeline extended slightly to ensure correct implementation.

    EtaOpenGlobal Trade Management Platform Implementationunderway

    Benefit: improve automation, trade compliance and controls across global import and export operations; improve data visibility and support scalability

    Multi-phase implementation.

    Membership Omnichannel Transformation (MOT) Platformdeveloping

    Benefit: unified platform to manage full membership life cycle; replace legacy processes; enable personalized communications, targeted promotions, frictionless sign-up/renewal

    Will serve as essential system of record for member identity, transactions, and interactions.

    Alera Point-of-Sale System Implementationunderway

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

    Completed in English-speaking Caribbean and one Spanish-speaking country, rolling out to others. Tangible improvements to the in-club experience.

    Workday Human Capital Management System Implementationunderway
    Start: Q3 FY26

    Benefit: modernize HR infrastructure, improving usability, driving efficiency and compliance, supporting scalable growth

    Phase 1 rolled out as part of broader effort for integrated data environment.

    Risks & headwinds

    6
    Currency volatilityQ3 FY26, ongoing

    additional foreign currency transaction costs leading to a $10.5 million net loss in total other expense in Q3 FY26, up from $7.2 million in Q3 FY25.

    Mitigation: Use of non-delivery forward foreign exchange contracts to mitigate risk in Colombian subsidiary; strategic and opportunistic sourcing of U.S. dollars in Trinidad.

    Evolving trade policy and broader macroeconomic pressuresOngoing

    Unquantified, but noted as affecting "key cost drivers, including fuel, freight and energy."

    Mitigation: Teams stay focused and disciplined; diversified geographic footprint and disciplined operating model.

    Inflation impacting consumer purchasing powerOngoing

    Unquantified, but noted as increasing price sensitivity.

    Mitigation: Focus on identifying cost savings and operational efficiencies to pass on to members, ensuring lowest possible price.

    Higher inventory balances9 Months FY26

    Consumed $9 million of cash used in operating activities for the first 9 months of FY26.

    Mitigation: Deliberate approach to ensure stronger in-stock position, particularly in non-foods, to meet member demand.

    Increased warehouse club and operational costsQ3 FY26

    Increased to 9.7% of total revenue in Q3 FY26 from 9.6% in Q3 FY25.

    Mitigation: Primarily due to expenses related to supporting the launch in Chile; management monitors SG&A closely and makes thoughtful, disciplined decisions.

    Policy changes in Colombia impacting labor costsOngoing

    Reduction in allowable work week hours from 44 to 42 without overtime, contributing to higher warehouse expenses and operating income decline in Colombia.

    Mitigation: Closely tracking evolution of P&L lines in Colombia and working to get back in line.

    Q&A highlights

    6

    How does PriceSmart's approach to Chile differ from its initial entry into Colombia, considering market differences and past challenges?

    David Price highlighted differences in market size, GDP per capita, and geographic location. He noted lessons learned from Colombia's peso devaluation and emphasized building a strong local team, focusing on pricing, and establishing a true value proposition for members in Chile. The goal is to scale up faster than in Colombia.

    “We, of course, always want to learn from experiences that we've had. And there's a lot of things that are different I guess objectively between the 2 markets, like you referenced, they're dramatically different in size.”

    asked by Jon Braatz · answered by David Price

    3 min read7 chapters

    Detailed Narrative

    01

    Leadership Updates & Organizational Changes

    PriceSmart announced key leadership appointments, including Shweta Bhatia as the new Chief Information Officer, bringing over 25 years of retail experience in operations, data, and AI. Sherri White transitioned to Chief Merchandising Officer, leveraging her deep merchandising background from Petco, Target, and Unilever. Paul Kovalevsky was appointed Executive Vice President, Other Businesses, overseeing pharmacy, optical, audiology, food service, bakery, and tire centers, reflecting an expanded scope for these categories.

    02

    Chile Market Entry Strategy

    The company is entering Chile, its first new market since Colombia in 2011, with the first warehouse club leased in ComunaLasconnes, Santiago, anticipated to open in spring 2027. This club will be located within a mall, offering accessibility. PriceSmart plans to invest approximately $100 million in capital expenditures for its first three clubs and central offices over the next several fiscal years, establishing a foundation for a multi-club market. The strategy includes building a local team, offering a mix of local and imported goods, and growing exports from Chile.

    03

    New Club Pipeline & Expansions

    PriceSmart is actively expanding its club footprint. Beyond Chile, the company purchased land for its 11th club in Costa Rica (Santo Tomas de Santo Domingo) with an anticipated spring 2027 opening. Four other warehouse clubs are in the pipeline: SoCasada, Costa Rica (opening next month), two in Jamaica (Montego Bay and Kingston), and one in Diane, Guatemala. Once these 16 clubs open, the total count will reach 63. Additionally, the recently opened sixth club in the Dominican Republic (Larman, May 2026) incorporated sustainable design.

    04

    Supply Chain & Distribution Network Optimization

    A central part of the transformation strategy involves optimizing distribution. PriceSmart began operations at a new distribution center in Bogota, Colombia, leveraging its strategic location for local production. Future plans include opening a DC in Jamaica in FY26 and the Dominican Republic in FY27. The company also expects to consolidate its Miami cold regional DC into its existing Miami drive facility in FY27 to improve efficiency. Third-party DCs in China, implemented in Q2, have already reduced landed costs and lead times for Asian-sourced merchandise.

    05

    Technology & Digital Transformation

    Digital channel sales reached a record $99.6 million in Q3, up 26.2% year-over-year, representing 6.9% of total net merchandise sales. The company is rolling out its new point-of-sale system, Alera, across English-speaking Caribbean markets and one Spanish-speaking country, with early indicators showing faster checkout times and expanded payment options. Significant progress was also made on implementing Workday's human capital management system, with Phase 1 rolled out to modernize HR infrastructure.

    06

    Private Label & Membership Platform Development

    Private label penetration, excluding a reclassification, increased by 40 basis points in the first nine months of FY26, reaching 26.7% of total merchandise sales. The company is developing a new "Membership Omnichannel Transformation" (MOT) platform to manage the full membership lifecycle, aiming to replace legacy processes with a consistent framework for enrollment, renewal, upgrades, and transactions, enabling personalized communications and targeted promotions.

    07

    Geopolitical & Macroeconomic Environment

    PriceSmart is monitoring political transitions across its region, including recent elections in Colombia, Chile, Costa Rica, and Honduras, noting early signs of more market-oriented approaches. However, the global geopolitical environment remains complex, with trade policy uncertainty and Middle East tensions affecting key cost drivers like fuel, freight, and energy. These pressures contribute to inflation in many markets, impacting consumer purchasing power and increasing price sensitivity.

    AI-generated summary of the company’s earnings call. Not investment advice.