Are Chilean consumers familiar with membership clubs, and when will membership sales begin for the Santiago store?

While no direct membership warehouse clubs exist, Chileans are familiar with subscription services (e.g., Uber One, Jumbo Prime). PriceSmart's annual fee model, based on value savings, will be somewhat new. Membership sales will begin several months before the spring 2027 opening, likely earlier than usual due to it being a new concept in the market. “people are not unfamiliar with paying a membership fee for a subscription service. That was the word I was looking for a subscription service. Now we have an annual fee versus the monthly fees.”

The company sharply reduced Trinidad's non-convertible cash balances and saw increased currency transaction costs. Was this an opportunistic move, and will it continue?

Gualberto Hernandez confirmed that the company was opportunistic in sourcing more U.S. dollars in Trinidad during the quarter, reducing non-convertible cash to $44.1 million. He stated there's no change in policy; they remain strategic and opportunistic, but market liquidity in Trinidad remains challenging, and the premium to cover costs will continue. “We sourced more U.S. dollars in Trinidad in this quarter... and that was -- will allow us to go down to $44.1 million of fracas in nonconvertible cash and trade at today.”

Why did operating income decline in Colombia despite strong comparable sales?

Gualberto Hernandez attributed the decline to a mix of higher warehouse expenses. David Price added that policy changes in Colombia, specifically a reduction in the allowable work week hours without overtime (from 44 to 42 hours), contributed to increased labor costs. They are closely tracking this and working to get back in line. “the work week has actually gone down in terms of the hours that are allowable for work without over time. So we've gone from 44 to actually 42 hours. So that's a component of what's going on there as well.”

PSMT

PriceSmart (PSMT) Q3 FY26 earnings call: guidance and Q&A

Earnings call· May 2026 (Q3 FY26)· Consumer Staples· Jul 9, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Capital expenditures for Chile expansion	$100 million high materiality	next several fiscal years	High
Distribution center opening	Jamaica DC medium materiality	Q4 FY26	High
Distribution center opening	Dominican Republic DC medium materiality	fiscal year 2027 · FY27	High
Distribution center relocation and consolidation	Miami cold regional distribution center into existing Miami regional drive facility medium materiality	fiscal year 2027 · FY27	High
RELEX forecasting and replenishment platform implementation	complete the full implementation medium materiality	Q2 FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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%	—	—

PSMT operating KPIs by quarter

PSMT operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Feb 2026 Q2 FY26	This call 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

Chile Warehouse Clubs & Central Offices underway $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 Rica underway

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/Remodeling underway

Start: fiscal 2026

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

Planned for existing clubs.

Colombia Distribution Center completed

Start: Q3 FY26

Benefit:new distribution center in Bogota

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

Jamaica Distribution Center planned

Benefit:new distribution center in Jamaica

Part of supply chain optimization.

Dominican Republic Distribution Center planned

Benefit:new distribution center in the Dominican Republic

Part of supply chain optimization.

Miami Cold Regional DC Relocation/Consolidation planned

Benefit:consolidate into existing Miami regional drive facility

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

Third-Party Distribution Centers in China completed

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 Implementation underway

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 Implementation underway

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) Platform developing

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 Implementation underway

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 Implementation underway

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

Currency volatility Q3 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 pressures Ongoing

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 power Ongoing

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 balances 9 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 costs Q3 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 costs Ongoing

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

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 read 7 chapters

Detailed narrative

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.

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.

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.

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.

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.

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.

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.

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