Pricesmart ((PSMT)) has held its Q4 earnings call. Read on for the main highlights of the call.
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PriceSmart’s recent earnings call highlighted a robust financial performance, marked by significant sales growth, expansion plans, and advancements in digital channels. Despite these positive developments, the company faced challenges such as operational disruptions from a hurricane, increased SG&A expenses, and currency conversion issues in certain markets.
Strong Financial Performance
PriceSmart reported impressive financial results, with net merchandise sales and total revenue both surpassing $1.3 billion in the fourth quarter. The company achieved a 9.2% increase in net merchandise sales, while comparable net merchandise sales rose by 7.5% in both U.S. dollars and constant currency.
Expansion and Growth Initiatives
The company continued its expansion efforts by opening a seventh warehouse club in Guatemala and acquiring land for new clubs in the Dominican Republic and Jamaica. Additionally, PriceSmart advanced its plans to enter the Chilean market, demonstrating its commitment to growth.
Digital Channel Growth
Digital channel sales saw a significant increase, reaching $306.7 million in fiscal year 2025, a 21.6% rise year-over-year. This growth represents 6% of total net merchandise sales, highlighting the company’s successful digital strategy.
Membership Growth
Membership accounts grew by 6.2% year-over-year, surpassing 2 million members. Notably, Platinum membership rose to 17.9% of the total membership base, indicating strong customer loyalty and engagement.
Private Label Sales Increase
Private label sales accounted for 28.1% of total merchandise sales, marking an increase of 50 basis points from the previous fiscal year. This growth underscores the popularity and success of PriceSmart’s private label offerings.
Impact of Hurricane Melissa
Operations in Jamaica were temporarily disrupted due to Hurricane Melissa, leading to the closure of clubs for a few days. This incident highlights the challenges posed by natural disasters on business operations.
Increase in SG&A Expenses
The company’s SG&A expenses rose to 13.5% of total revenues for the fourth quarter and 12.9% for the full fiscal year 2025. This increase was primarily attributed to investments in technology, reflecting PriceSmart’s focus on enhancing operational efficiency.
Currency Challenges
PriceSmart faced currency conversion challenges, particularly in Trinidad, where $59.7 million of cash could not be readily converted into U.S. dollars. Similar issues were encountered in Honduras, posing financial management challenges.
Forward-Looking Guidance
PriceSmart’s forward-looking guidance remains optimistic, with total net merchandise sales for the fiscal year reaching nearly $5.2 billion, a 7.7% increase. The company plans to expand its footprint with new warehouse clubs in the Dominican Republic, Jamaica, and Chile, aiming for a total of 59 clubs. Additionally, PriceSmart intends to enhance its supply chain and technological capabilities to improve operational efficiency and member experience.
In summary, PriceSmart’s earnings call reflected a positive sentiment with strong financial performance and strategic growth initiatives. Despite facing operational and financial challenges, the company remains focused on expanding its market presence and enhancing its digital and operational capabilities.