PriceSmart's Q4 2025: Contradictions Emerge on Chile Store Openings, Remittances' Impact on Sales

Date of Call: October 31, 2025

Financials Results

• Revenue: Total revenue over $1.3B in Q4; FY2025 total revenues almost $5.3B; net merchandise sales Q4 up 9.2% YOY (9.1% in constant currency); FY net merchandise sales up 7.7% YOY (8.5% in constant currency).
• EPS: $1.02 per diluted share in Q4, up from $0.94 in Q4 FY2024; FY2025 $4.82 per diluted share vs $4.57 prior year.
• Gross Margin: Total gross margin 15.7% of net merchandise sales in Q4, unchanged YOY; gross margin dollars up ~$16.9M (+9% YOY); total revenue margin 17.4%, up 10 bps YOY.
• Operating Margin: Operating income $52.8M in Q4, up 7.2% YOY; operating income FY2025 $232.5M, up 5.2% YOY.

Guidance:

• La Romana (Dominican Republic) expected to open spring 2026; Montego Bay (Jamaica) expected summer 2026; South Camp (Jamaica) expected fall 2026 — 59 clubs total once open.
• Open PriceSmart-run distribution centers in Trinidad and the Dominican Republic in FY2026; new dry DC opened in Guatemala and Panama adapted for cold in Q1 FY2026.
• Finalize RELEX forecasting/replenishment migration in FY2026 and complete ELERA POS rollout in English-speaking Caribbean in Q1 FY2026, with Spanish markets thereafter.
• Migrate mobile app to fully native iOS/Android and begin Workday HCM implementation in Q1 FY2026.
• Comparable net merchandise sales for the 8 weeks ended Oct 26, 2025: +7.2% (6.5% constant currency).

Business Commentary:

* Revenue and Sales Growth: - PriceSmart reported net merchandise sales of over $1.3 billion for Q4, with an increase of 9.2% or 9.1% in constant currency. - This growth was driven by strong membership sales and income, as well as increased digital channel sales and a focus on private label brands.

• Membership and Member Engagement:
• Membership accounts grew by 6.2% year-over-year to over 2 million, with Platinum membership representing 17.9% of the total base.

• This growth was due to increased focus on the Platinum segment through targeted promotional campaigns and a $5 annual fee increase for all membership types.

• Expansion and New Club Openings:

• PriceSmart opened new clubs in Guatemala and Jamaica, expanding its total number of clubs to 59.

• These openings were part of a strategy to increase market presence and sales, supported by a real estate acquisition plan and expansion in existing markets.

• Supply Chain and Technology Investments:

• The company made significant progress in its supply chain transformation, including the expansion of distribution centers in Guatemala and Trinidad.

• Investments in technology, such as the implementation of the RELEX and ELERA systems, were aimed at enhancing efficiency and productivity.

• Impact of Natural Disasters on Operations:

• PriceSmart's operations in Jamaica were affected by Hurricane Melissa, resulting in the closure of clubs for a few days.
• Despite these disruptions, the company successfully reopened its clubs and maintained a focus on employee and member safety.

Sentiment Analysis:

Overall Tone: Positive

• Management cited strong Q4 results: net merchandise sales +9.2% Q4, Q4 EPS $1.02 vs $0.94 prior, digital sales +21.6% FY, membership income +14.9%, operating income +7.2% — and emphasized expansion and supply‑chain initiatives.

Q&A:

• Question from Jon Braatz (Kansas City Capital Associates): David, in Jamaica, I take it that you — with the stores being open that they were undamaged during the hurricane. Is that correct?
  Response: Stores in Jamaica were not damaged, have reopened, and merchandise is being resupplied to restore assortments.

• Question from Jon Braatz (Kansas City Capital Associates): South Camp is a smaller acreage. Is it going to be a smaller store than what is typical?
  Response: Intention is to deliver a typical-size club at South Camp; parking configuration will be adjusted to meet requirements.

• Question from Héctor Maya López (Scotiabank): If everything goes well in Chile, might first openings come in 2026 or 2027, or could it take longer?
  Response: We have an executory agreement on a Chile site and are progressing quickly, but we have not provided or committed to any opening dates.

• Question from Héctor Maya López (Scotiabank): Could you share dynamics by country on EBITDA margins and whether there were any methodology changes?
  Response: No changes in methodology; we haven't seen material mix changes impacting EBITDA, and we do not disclose country-level margin details.

• Question from Jon Braatz (Kansas City Capital Associates): Could a 1% change in remittances from the U.S. impact sales performance in some markets?
  Response: Although remittances are significant in several markets, management has seen no indication so far that remittance changes have reduced consumption or sales.

Contradiction Point 1

Opening Dates in Chile

It involves discrepancies in the timeline for store openings in Chile, which could impact strategic planning and investor expectations.

In Chile, if all goes smoothly, when might the first openings occur? - Héctor Maya López(Scotiabank Global Banking and Markets, Research Division)

2025Q4: We have not provided opening date information at this point. We continue to make progress with site acquisition under executory agreement, but no definitive timeline has been shared. - David Price(CEO)

What's the rationale for considering Chile for future openings and its market potential? Are you considering other regional opportunities? - Héctor Manuel Maya López(Scotiabank Global Banking and Markets)

2025Q3: We believe we'll have initial openings in Chile in 2026, possibly early 2027. - Robert E. Price(Interim CEO & Chairman)

Contradiction Point 2

Impact of Remittances on Sales Performance

It involves the potential impact of remittances on sales performance, which can influence revenue forecasts and consumer behavior analysis.

Could changes in U.S. remittances affect your store sales? - Jon Braatz (Kansas City Capital Associates)

2025Q4: Several of our markets rely heavily on remittances. While an impact is possible, we have no evidence to suggest a slowdown has affected consumption yet. We will continue to monitor the situation. - David Price(CEO)

Have any countries you operate in imposed a 10% reciprocal tariff on US goods? Can you reroute Chinese-sourced merchandise directly to your San Jose and Panama warehouses to bypass US tariffs? What percentage of your merchandise is potentially affected by tariffs? - Jon Braatz (Kansas Capital)

2025Q2: We have seen through the years where remittances have been very, very important to many of the countries and there's been fluctuations in remittances. We monitor them, but we've not seen any impact on consumption in our market. - David Price(CEO)