PriceSmart Q1 2026 Earnings Results & Report

PriceSmart EPS Results

• Actual EPS: $1.29
• Consensus EPS: $1.28
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $1.21
• EPS Beat Rate: 2 of last 8 quarters

PriceSmart Revenue Results

• Actual Revenue: $1.38 billion
• Expected Revenue: $1.36 billion
• Beat/Miss: Beat by +$26.12 million
• YoY Revenue Growth: +9.90%

PriceSmart (NASDAQ:PSMT) operates membership warehouse clubs serving customers in Central America, the Caribbean and parts of South America. Its clubs offer a range of products and services, combining bulk-value shopping with locally relevant merchandise.

Products include groceries and fresh foods, household goods, electronics, appliances, clothing and other consumer products. Depending on the location, clubs also offer services such as food courts, bakeries, pharmacies, optical centers and fuel.

PriceSmart was founded by Sol and Robert Price, who previously helped build the Price Club warehouse-club business. The company opened its first club in Panama in 1994 and has since expanded across the region.

PriceSmart Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Strong sales and membership momentum: Net merchandise sales were nearly $1.4 billion (up 10.6% / 9.5% cc) with comparable sales +8% (6.9% cc), transactions +8.4%, memberships +6.7% to >2.0M, and Platinum penetration rising to 19.3%, supporting higher membership income.
• Positive Sentiment: Colombia outperformance: Colombia delivered exceptional growth (net merchandise sales +27.8%, comps +27.9% / ~14–15% in constant currency), contributing roughly 320 basis points to consolidated comparable sales.
• Positive Sentiment: Real estate expansion underway: Land purchased for new clubs in the Dominican Republic, Jamaica and Costa Rica (four new clubs expected to bring the total to 60), and the company is actively advancing a market entry into Chile with a country GM and two prospective sites.
• Neutral Sentiment: Supply chain and technology investments: New distribution centers (Guatemala live; Trinidad, Colombia, Dominican Republic planned), China consolidation, RELEX and E2open rollouts, app modernization, and POS/HCM deployments aim to improve availability and lower costs but require upfront investment and execution.
• Neutral Sentiment: Solid but mixed financials: Operating income rose 8% to $62.9M and adjusted EBITDA was up 9.8% to $86.9M with gross margin steady, yet the effective tax rate increased to 27.9%, foreign-exchange losses persisted, and ~$80M of cash in Trinidad is not readily convertible to USD.

Presentation

[Operator]

Good afternoon, everyone, and welcome to PriceSmart, Inc.'s Earnings Release Conference Call for the Q1 of Fiscal Year 2026, which ended on November 30, 2025. After remarks from our company's representatives, David Price, Chief Executive Officer, and Gualberto Hernandez, Chief Financial Officer, you will be given an opportunity to ask questions as time permits. As a reminder, this conference call is limited to one hour and is being recorded today, Thursday, January 8, 2026. A digital replay will be available shortly following the conclusion of the call through January 15, 2026, by dialing 1-800-770-2030 for domestic callers or 1-647-362-9199 for international callers, and entering replay access code 5898084#. For opening remarks, I would like to turn the call over to PriceSmart's Chief Financial Officer, Gualberto Hernandez. Please proceed, sir.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

Thank you, Operator, and welcome to PriceSmart, Inc.'s earnings call for the Q1 of fiscal year 2026, which ended on November 30, 2025. We will be discussing the information that we provided in our earnings press release and our 10-Q, which were both released yesterday, on January 7, 2026. Also, in these remarks, we refer to non-GAAP financial measures. You can find a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures in our earnings press release and our 10-Q. These documents are available on our Investor Relations website at investors.pricesmart.com, where you can also sign up for email alerts. As a reminder, all statements made on this conference call, other than statements of historical fact, are forward-looking statements concerning the company's anticipated plans, revenues, and related matters.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

Forward-looking statements include, but are not limited to, statements containing the words expect, believe, plan, will, may, should, estimate, and some other expressions. All forward-looking statements are based on current expectations and assumptions as of today, January 8, 2026. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks detailed in the company's most recent annual report on Form 10-K, the quarterly report on Form 10-Q filed yesterday, and other filings with the SEC, which are accessible on the SEC's website at www.sec.gov. These risks may be updated from time to time. The company undertakes no obligation to update forward-looking statements made during this call. Now, I will turn the call over to David Price, PriceSmart's Chief Executive Officer.

[David Price, CEO at PriceSmart, Inc]

Thank you, Gualberto, and good morning, everyone. Thank you for joining us today. I want to begin by expressing my gratitude to our employees across all the regions where we operate. This Q1 through December represents our peak season, our most demanding period, and our teams rose to the challenge. From our clubs to our distribution centers to our offices across all of our countries, every part of our organization contributed to our success. Their execution was outstanding, and their dedication and commitment to serving our members continues to be the foundation of our success. It's a pleasure to be back with you for my second earnings call as CEO. I'm now about 128 days into the role, and I've spent this time visiting clubs, distribution centers, and offices across our markets.

[David Price, CEO at PriceSmart, Inc]

What strikes me most is the strength of our culture: teams across 13 countries united by a commitment to doing the right thing for our members and their communities. This foundation, combined with the opportunities ahead, gives me great confidence in our future. I'm energized by what we can accomplish together. I'm pleased to share that we delivered strong results across our key performance areas. Our membership growth, solid sales performance, and continued operational discipline reflect both resilient consumer demand and the outstanding execution by our teams. Now, I'd like to highlight some of our sales results for the Q1. Net merchandise sales and total revenue reached almost $1.4 billion during the Q1. Net merchandise sales increased by 10.6%, or 9.5% in constant currency. Comparable net merchandise sales increased by 8%, or 6.9% in constant currency.

[David Price, CEO at PriceSmart, Inc]

During the Q1, our average sales ticket grew by 2.1%, and transactions grew 8.4% versus the same prior year period. The average price per item increased 1.8% year over year, while average items per basket remained relatively flat. First, in Central America, where we had 32 clubs at quarter end, net merchandise sales increased 9.6%, or 9.2% in constant currency. Comparable net merchandise sales increased 5.4%, or 5.1% in constant currency. All of our markets in Central America had positive comparable net merchandise sales growth. Our Central America segment contributed approximately 320 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the Q1. Second, in the Caribbean, where we had 14 clubs at quarter end, net merchandise sales increased 5.7%, or 7.8% in constant currency. Comparable net merchandise sales increased 5.6%, or 7.7% in constant currency.

[David Price, CEO at PriceSmart, Inc]

All of our markets in the Caribbean had positive comparable net merchandise sales growth. Our Caribbean region contributed approximately 160 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the Q1. Last, in Colombia, where we had 10 clubs open at the end of our Q1, net merchandise sales increased 27.8%, or 15% in constant currency. Comparable net merchandise sales increased 27.9%, or 14.7% in constant currency. Colombia contributed approximately 320 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter. In terms of merchandise categories, when comparing our Q1 sales to the same period in the prior year, our foods category grew approximately 11.3%. Our non-foods category increased approximately 7.2%, and our food service and bakery category increased approximately 10.1%.

[David Price, CEO at PriceSmart, Inc]

Our health services, including optical, audiology, and pharmacy, increased approximately 17.8%. Membership accounts grew 6.7% year over year to over 2 million accounts, with a strong 12-month renewal rate of 89.3% as of November 30. A key focus of our membership strategy is growing Platinum memberships. Platinum is our premium tier designed for our most engaged members. These members receive an annual cashback reward on eligible purchases, which drives loyalty, increases purchasing frequency, and rewards their continued business with us. By focusing on Platinum growth, we are investing in our highest value member relationships. As of November 30, Platinum accounts represented 19.3% of our total membership base, up from 14% in the same period last year. This growth reflects our targeted promotional campaigns and increased focus on the segment.

[David Price, CEO at PriceSmart, Inc]

Membership income as a percentage of revenue increased to 1.7%, compared to 1.6% in the prior year period, driven in part by the shift towards Platinum Membership. These strong results reflect our team's execution and the strategic initiatives we have underway. Let me walk you through the progress we're making across real estate expansion, supply chain transformation, and technology investments that are enhancing our ability to serve our members. In the Q3 of fiscal year 2025, we purchased land for our sixth warehouse club in the Dominican Republic, in La Romana. That's about 73 miles east of our nearest club in Santo Domingo. The club will be built on a five-acre property and is expected to open in spring 2026. In Jamaica, we're expanding from two clubs to four.

[David Price, CEO at PriceSmart, Inc]

In the Q1 of fiscal year 2026, we purchased land in Montego Bay for our third club, and that's about 100 miles west of Kingston. This will also be a five-acre site, anticipated to open in fall 2026. Also, in the Q1 of fiscal year 2026, we finalized a land lease for our fourth Jamaica club on South Camp Road. That's about six miles from our existing Kingston club. This will be a three-acre property, also anticipated to open in winter 2026. The opening timeline for our Jamaica clubs has been adjusted as we address operational disruptions caused by Hurricane Melissa and support recovery efforts across the island. I'm pleased to report that our existing clubs in Kingston and Portmore weathered the storm well and were back serving members almost immediately. We do not anticipate any further delays to our new club openings at this time.

[David Price, CEO at PriceSmart, Inc]

In addition, in the Q2 of Fiscal Year 2026, we purchased land for our tenth warehouse club in Costa Rica in Ciudad Quesada. That's approximately 47 mi north from our nearest club in Costa Rica. The club will be built on a six-acre property and is anticipated to open in fall 2026. Once these four new clubs are open, we will operate 60 warehouse clubs in total. We are advancing on our plans to enter Chile, a market that we believe offers strong potential for multiple PriceSmart warehouse clubs. As part of this initiative, as you know, we've hired a country general manager and signed executive agreements for two prospective club sites. While we haven't announced target opening dates, we're moving quickly and managing key factors that influence timing, such as permitting and construction.

[David Price, CEO at PriceSmart, Inc]

In addition to opening new clubs in existing markets and Chile, we're continuing to optimize our current footprint. Increasing club size, improving efficiency, and expanding parking spaces at high-volume locations remain some of the most effective ways to drive sales and enhance the member experience. To support this strategy, we will begin warehouse club and parking lot expansion and remodels in fiscal year 2026 in Portmore, Jamaica, and Barbados. Now, turning to our supply chain transformation strategy. One of the key drivers in keeping prices low is improving how we move and distribute merchandise to our clubs. Today, we operate major distribution centers in Miami, Costa Rica, Panama, and Guatemala. During the Q1, we successfully adapted our Panama facility to handle cold merchandise and began operations at our new distribution center in Guatemala.

[David Price, CEO at PriceSmart, Inc]

We now plan to open distribution centers in Trinidad, Colombia, and the Dominican Republic during fiscal year 2026. Our goals with these distribution centers are to improve product availability, reduce lead times, and lower landed costs, among other efficiency gains. Alongside these new distribution centers, we've begun implementing third-party distribution centers in China to consolidate merchandise sourced in the country, driving greater efficiency and lowering costs. In select countries, we've also introduced our own fleet of trucks to deliver merchandise directly to our clubs and capitalize on backhaul opportunities. We continue to advance our migration to the RELEX forecasting and replenishment platform, and we remain on track to complete the full implementation in fiscal year 2026. This upgrade is a critical part of our supply chain strategy and is expected to boost productivity, improve inventory management, and increase in-stock availability, ultimately driving sales growth and operational efficiency.

[David Price, CEO at PriceSmart, Inc]

During the Q1, we advanced our multi-phase implementation of the E2open Global Trade Management Platform, designed to enhance automation, compliance, and controls across global import and export operations. We believe this platform will strengthen trade compliance, improve data visibility, and support scalable international growth once fully implemented. Turning now to other ways we're enhancing membership. For the first three months of fiscal year 2026, private label sales represented 27% of total merchandise sales, down 70 basis points from the same period last year. This was impacted by a reclassification of the produce category, and on a comparable basis, we would have had a 70 basis point increase in penetration of our private label. Our private label brand, Member Selection, is a cornerstone of our strategy. What makes our private label program unique is that we develop products both centrally through our U.S.

[David Price, CEO at PriceSmart, Inc]

buying team and locally through our country-based buyers. This development approach enables us to source private label products globally, regionally, and locally, providing flexibility to deliver the best quality and value. Together, this allows us to offer Member Selection products that combine global scale and quality with local relevance. Private label serves multiple strategic purposes. It allows us to offer high-quality products at lower prices than national brands, driving member loyalty. It improves our margins, and it gives us leverage with national brand suppliers by providing a trusted alternative that keeps them competitive. We're committed to growing this penetration through strategic product development. For example, recent additions like organic maple syrup, aged Scotch whiskey, and premium deli meats demonstrate our focus on delivering exceptional value across key categories.

[David Price, CEO at PriceSmart, Inc]

In the Dominican Republic, we've enhanced our co-branded consumer credit card with our new partner, Banco Santa Cruz, which launched in November 2025. This new agreement offers 6% cashback at PriceSmart clubs, adding even more value for our members in that market. We continue to invest in omnichannel capabilities to meet our members where they are. In the Q1, digital channel sales reached $89.8 million, up 29.4% year over year, representing 6.6% of total net merchandise sales. This marks our highest digital contribution to date. Orders placed directly through our website or app grew 18.1%, with average transaction value up 10.1%. As of November 30, 73% of our members had created an online profile, and 27.1% of our membership base has made a purchase on pricesmart.com or our app. We see continued opportunity in this space and will keep investing to enhance the digital experience we offer our members.

[David Price, CEO at PriceSmart, Inc]

During the Q1, we began migrating our mobile application to fully native iOS and Android architectures to enhance speed, reliability, and accessibility. This foundation will allow faster deployment of new features and help us deliver an outstanding member experience in our digital channels. Turning to technology investments that enhance both member and employee experience and operational efficiency. In the Q1, we completed implementation of our new point of sale system, ELERA, a Toshiba product in all English-speaking Caribbean markets. Later in fiscal year 2026, we will begin rolling out this system in our Spanish-speaking markets. ELERA will help us achieve faster checkout times, improve productivity, and expand payment options, among other benefits. Also, in the Q1, we began implementing Workday's human capital management system to replace legacy HR applications.

[David Price, CEO at PriceSmart, Inc]

This upgrade is designed to enhance the employee experience with modern, user-friendly tools while improving processes and strengthening compliance. Additionally, the platform will provide scalable, integrated data to support our future growth. Before I turn it over to Gualberto, I want to address a few additional topics. First, regarding U.S. tariffs, approximately half of the merchandise we sell is sourced locally and regionally within Latin America. The other half is sourced from the U.S., Europe, China, and globally. While we consolidate many of these products through our Miami distribution center, they are shipped in bond and are not nationalized in the United States. We also take advantage of free trade agreements where we can. Additionally, we've been leveraging our expanding distribution center network and China consolidation capabilities to ship direct to market where feasible, further optimizing our supply chain. As a result, U.S.

[David Price, CEO at PriceSmart, Inc]

Import tariffs do not apply to most of our merchandise. We continue to monitor the evolving trade policy environment, but to date, current U.S. tariff policy has not impacted our cost structure or business operations. We are also monitoring remittance flows to Latin America and the Caribbean. Remittances represent a significant portion of GDP in several of our markets, including Jamaica, Honduras, El Salvador, Guatemala, and Nicaragua. While there has been reporting on changing remittance patterns from the U.S. to the region, to date, we have not seen changes in consumer demand or purchasing behavior in our clubs. We continue to watch this factor closely, given its importance to the economies we serve. In addition, over the weekend, there was major news out of Venezuela. We are alert and monitoring the situation closely.

[David Price, CEO at PriceSmart, Inc]

It's still very early to understand how this will evolve or what the implications might be for our business or for U.S. companies operating in the region. And lastly, I want to provide a preview of our holiday season performance. Comparable net merchandise sales for the nine-week period ended December 28, 2025, grew 7.1% in U.S. dollars and 5.4% in constant currency. This represents solid performance as we continue to comp against increasingly strong prior year periods, though it does reflect a deceleration from our Q1's growth rate. December specifically was impacted by several transitory factors. Government elections in Honduras created consumer uncertainty. Panama's extended rainy season disrupted both traffic and logistics, and supply chain timing issues created out-of-stocks in several high-volume food items, a situation we identified and are addressing. Looking forward, we are encouraged by what we are seeing.

[David Price, CEO at PriceSmart, Inc]

Colombia continues to deliver strong momentum, and we're seeing positive trends across many of our markets as we enter calendar 2026. With that, I'll turn it over to Gualberto to walk you through the financial details.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

Thank you, David. Continuing with the income statement, total gross margin for the quarter as a percentage of net merchandise sales remained strong and unchanged at 15.9% versus Q1 last year. Total revenue margins improved 30 basis points to 17.7% of total revenue, from 17.4% in the same period last year. This was mainly driven by the good results in membership renewals and platinum growth, as mentioned before by David. On overhead cost, total SG&A expenses increased to 13.1% of total revenues for the Q1 of fiscal year 2026, compared to 12.8% for the Q1 of fiscal year 2025.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

The 30 basis points increase is primarily related to our continued investments in technology and to the compensation of our Chief Executive Officer. During his tenure as our interim Chief Executive Officer from February 2023 to August 2025, Robert Price declined any compensation for his services. Operating income for the Q1 of fiscal year 2026 increased 8% from the same period last year to $62.9 million. Below the operating income line, in the Q1 of fiscal year 2026, we recorded a $7.2 million net loss in total other expense, almost unchanged from $7.3 million net loss in total other expense in the same period last year. The primary cause of our net loss in total other expense is due to foreign currency-related losses.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

In terms of income tax, our effective tax rate for the Q1 of fiscal year 2026 came in at 27.9% versus 26.5% a year ago, primarily due to non-recurring items such as a tax contingency accrual and foreign exchange rate fluctuations. Finally, net income for the Q1 of fiscal year 2026 was $40.2 million, or $1.29 per diluted share, up from $37.4 million, or $1.21 per diluted share, in the Q1 of fiscal year 2025. Adjusted EBITDA for the Q1 of fiscal year 2026 was $86.9 million, compared to $79.1 million in the same period last year, a growth of 9.8%. Moving on to our balance sheet, we ended the quarter with cash, cash equivalents, and restricted cash totaling $249.6 million, plus approximately $114.2 million of short-term investments, typically held in certificates of deposit.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

When reviewing our cash balances, it is important to note that as of November 30, 2025, we had TTD 80.2 million of cash, cash equivalents, and short-term investments denominated in local currency in Trinidad, which we could not readily convert into U.S. dollars. Turning to cash flow, net cash provided by operating activities reached $71.2 million for the first three months of fiscal year 2026, an increase of $32.7 million versus the prior year period. The increase is primarily due to $18.7 million of overall net positive changes in our various operating assets and liabilities, mainly due to recoveries in our VAT receivables and increases in accrued platinum rewards, as well as improvements in working capital that contributed $10 million to the overall increase.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

Net cash used in investing activities increased by $61 million for the first three months of fiscal year 2026, compared to the prior year, primarily due to a net increase in purchases, less proceeds of short-term investments of $39.8 million, an $11.9 million increase in purchases of long-term investments, and a $10.4 million increase in property and equipment expenditures to support growth of our real estate footprint compared to the same three-month period a year ago. Net cash used in financing activities during the first three months of fiscal year 2026 remained relatively flat compared to the same period a year ago. In closing, we're pleased with our start to fiscal year 2026 and the momentum we're building. The investments we're making in real estate, supply chain infrastructure, and technology are positioning us for sustained growth.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

Combined with our team's exceptional execution, we're confident in our ability to continue delivering value to our members and driving long-term performance. I will now turn the call over to the operator to take your questions. Operator, you may now start taking our callers' questions.

[Operator]

At this time, if you would like to ask a question, press Star, then the number one on your telephone keypad. To withdraw your question, simply press Star one again. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of John Baugh with Oppenheimer. Please go ahead.

[John Baugh, Managing Director at Oppenheimer & Co. Inc.]

Good morning, guys. A couple of questions. David, when you spoke a little bit about the December comps, you mentioned some issues in Honduras and Panama in the supply chain. Specifically, when you look at Honduras and Panama, were the comps positive despite these issues in the month of December?

[David Price, CEO at PriceSmart, Inc]

We usually don't share that level of detail, John, in terms of country by country, so I want to make sure I'm consistent, but in Honduras, with the election, there was some front-loading of purchasing in November leading up to the election, and we've seen a good recovery now that there's been an outcome of the election and a definitive president, and in Panama, we're well into the dry season and seeing okay results there as well, but I can't share that level of granularity with you.

[John Baugh, Managing Director at Oppenheimer & Co. Inc.]

Okay. So basically, those issues that you saw are behind you at this point?

[David Price, CEO at PriceSmart, Inc]

Yeah.

[John Baugh, Managing Director at Oppenheimer & Co. Inc.]

Okay. Okay. Good, and can you speak a little bit about Colombia? Colombia has been very strong for the last year, maybe even more than a year. Comps have been well into the double-digit area. Anything you can put your finger on as to the strength there?

[David Price, CEO at PriceSmart, Inc]

Sure. Thanks for the question. So a couple of different things. I mean, both kind of internal and external factors. Starting with the external, I think that the strength of the peso certainly helps. The merchandise mix there, we have more local items than in other markets. But when we're under 4,000-to-1 on the peso, that definitely helps not only purchasing power, but also consumer sentiment. I think confidence in the market from the consumer standpoint. In addition, I have to just give credit to the team. We have an excellent team, both in buying and operations there. And there's some great items coming out of Colombia, even some that we're starting to export to other markets. So the item development, both locally and then in terms of the imports also, is driving nice differentiation.

[John Baugh, Managing Director at Oppenheimer & Co. Inc.]

I know you spoke a little bit about the issues in Venezuela. And what kind of problems might Colombia face if there's sort of a migration from Venezuela, additional migration from Venezuela to Colombia? Does that put economic pressure? What kind of economic pressure might that place on Colombia? David?

[Operator]

Ladies and gentlemen, this is the operator. I apologize, but there will be a slight delay in today's conference. Please hold, and the call will resume momentarily. Thank you for your patience.

[Operator]

Mr. Baugh, your line is open.

[John Baugh, Managing Director at Oppenheimer & Co. Inc.]

Yes. David, I was going to ask you about all the issues that we're seeing in Venezuela. Could there be pressure on the Colombian economy if there's more migration of people from Venezuela to Colombia? Can that put any pressure on the economy?

[David Price, CEO at PriceSmart, Inc]

I don't want to speculate, John. The diaspora has been going on for a long time, and there's been Venezuelan migration all over the region. And so I want to be careful not to speculate on something I really don't have any data to share on. But from what we're seeing, consumer demand is strong in Colombia, and we have a good brand position.

[John Baugh, Managing Director at Oppenheimer & Co. Inc.]

Okay. Thank you. And one last question. If I saw correctly, at the end of fiscal 2025, you had about $60 million in U.S. dollars in Colombia, I mean, in Trinidad. And at the end of the Q1, you have $80 million. Why the increase from 60 to 80 in the Q1?

[Gualberto Hernandez, CFO at PriceSmart, Inc]

Hi, John. This is Gualberto. How are you? Thank you for the question.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

Trinidad, as you know, is something we're looking carefully, and there's a lot of fluctuations in the availability of U.S. dollars. There's no specific reason. It's a little bit of high season now after Christmas, so there is more cash on our side, and it's a bit more difficult to cover everything. But we don't see any material changes in the conditions there. It continues to be difficult, but I will say it's more difficult than before, and it just fluctuates depending on the availability of dollars, as you know, in the market in every month. Nothing particular to highlight there.

[John Baugh, Managing Director at Oppenheimer & Co. Inc.]

Yeah. Okay. Thank you.

[David Price, CEO at PriceSmart, Inc]

Thank you, John.

[Operator]

Your next question comes from the line of Hector Maya, Scotiabank. Please go ahead.

[Hector Maya, Analyst at Scotiabank]

Hi, David. Gualberto. Happy New Year. Thank you very much for taking the time. Happy New Year, David. Happy New Year. Happy New Year.

[Hector Maya, Analyst at Scotiabank]

Thank you for taking my questions up. On Chile, very quick, it is really nice to hear that you are moving quick on certain important steps. Usually, permits tend to take a bit of time, so that is nice to hear. Nice to hear, but what have you learned so far from the market or potential competition, and are there any surprises or takeaways or things that you were not expecting, maybe, in Chile, and on Colombia, with the good momentum there, how sustainable do you think is the revenue growth that we are seeing in the country, and how concerned are you about the minimum wage hikes in the country, or what effect do you expect from that?

[David Price, CEO at PriceSmart, Inc]

Okay. Let me take the first one with Chile. I wouldn't say there's anything necessarily that has surprised us, but I will say Chile, of course, is a very competitive market and highly digitalized, with a high expectation from the consumer. It's also very open from the standpoint of free trade agreements, and so there are a lot of imports as well. There are no club models in Chile. There are Mayorista models, as you know, that are kind of more like the Atacadão kind of Brazil-type wholesale model, but nobody doing what we do. So we operate in other competitive markets, and so we feel optimistic.

[David Price, CEO at PriceSmart, Inc]

And in terms of Colombia, in terms of minimum wage, I don't want to comment on in terms of it's a sovereign country making its own policy decisions, but we don't have any sort of issue there because we aim to pay a living wage in every market and pay above minimum wage where that doesn't align with a living wage. And so that's kind of our approach, and we want to have our pay and compensation benefits be one of the differentiators from the standpoint of who we employ. I mean, that's a really important part of our philosophy as a business, is being an employer of choice. And so I don't anticipate any issue in Colombia as a result of that.

[David Price, CEO at PriceSmart, Inc]

And in terms of forward-looking, I can't comment on future growth, but as I mentioned to John, we're feeling confident in terms of our results in Colombia and the brand position in the market, as well as our product mix and what we're able to offer.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

Yeah. Absolutely. I mean, to complement that, our operations in Colombia are growing more and more efficient, so we're confident on our abilities to be successful and to have a right to win in the market. But as you, of course, understand, there are a lot of macroeconomic and political elements that we don't control.

[Hector Maya, Analyst at Scotiabank]

Excellent. Excellent to hear. Thank you very much on that. And also, on warehouse and parking expansions and remodeling, just how much opportunity or boost in operations are you expecting from this by country or by region? And where do you see the most potential here?

[David Price, CEO at PriceSmart, Inc]

I can't share by region or by country or club, but I can tell you that when we do warehouse expansions, remodels, or parking expansions, it helps on several fronts. I mean, first and foremost, it's helping our members. In the case of the parking, we have the good problem of having busy locations. And so when we offer more parking, it helps our members get in and out quicker, but also enables us, if there's better flow, to turn spaces a little faster, which can help. And then in terms of the sales floor, it helps from an efficiency standpoint. And then, of course, also in terms of selling pallet positions, which is helpful as well, both in terms of items, but also in terms of show stock and availability on the floor.

[David Price, CEO at PriceSmart, Inc]

So I can't mention beyond that, but there are various factors that drive where we select to do this and also how it impacts, and so far, we've been happy with the results where we've pursued remodels and parking lot expansions.

[Hector Maya, Analyst at Scotiabank]

Perfect. Very, very helpful. Thank you. Thank you very much, and again, Happy New Year. Congratulations. Thank you.

[David Price, CEO at PriceSmart, Inc]

Thanks, Hector. Appreciate it.

[Operator]

That concludes our Q&A. I will now turn the call back over to Gualberto Hernandez for closing remarks.

[Gualberto Hernandez, CFO at PriceSmart, Inc]

Thank you, Operator, and thank you, everybody, for joining the call today. Happy New Year to everybody, and looking forward to our next call.

[Operator]

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Executives

• David Price, CEO
• Gualberto Hernandez, CFO

Analysts

• Hector Maya, Analyst at Scotiabank
• John Baugh, Managing Director at Oppenheimer & Co. Inc.