PriceSmart NASDAQ: PSMT reported what management described as a “strong” second quarter of fiscal 2026, citing broad-based sales growth across regions and an all-time high membership renewal rate. The warehouse club operator’s fiscal Q2 ended Feb. 28, 2026.
Sales growth led by Colombia; tickets and traffic both increased
Chief Executive Officer David Price said net merchandise sales and total revenue in the quarter reached “almost $1.5 billion.” Net merchandise sales increased 9.9% year over year, or 7.8% in constant currency, while comparable net merchandise sales rose 7.6%, or 5.5% in constant currency. Price noted two recent club openings—Cartago and Quetzaltenango—are not yet included in comparable sales.
For the first half of fiscal 2026, PriceSmart posted net merchandise sales of “over $2.8 billion” and total revenue of “almost $2.9 billion.” Net merchandise sales increased 10.2% (8.6% constant currency), and comparable net merchandise sales rose 7.8% (6.2% constant currency).
Operationally, Price said the average sales ticket increased 2.2% in Q2, with transactions up 7.5%. Average price per item increased 3.3% year over year, while average items per basket fell 1%.
Regionally, management highlighted:
- Central America (32 clubs): net merchandise sales increased 8.6% (7.8% constant currency); comparable sales rose 4.7% (4.0% constant currency). Price said the region contributed about 280 basis points to consolidated comparable growth.
- Caribbean (14 clubs): net merchandise sales increased 4.3% (5.3% constant currency); comparable sales rose 4.2% (5.1% constant currency). Contribution was about 120 basis points.
- Colombia (10 clubs): net merchandise sales increased 30.5% (13.8% constant currency); comparable sales rose 31.3% (14.7% constant currency). Price said Colombia contributed about 360 basis points, driven by peso appreciation, higher member traffic, and a stronger merchandise offering.
Merchandise mix, private label, and digital channels
By category, Price said food sales grew about 9.2% year over year in Q2, with “fresh proteins” standing out; seafood, poultry, and meat each exceeded 15% growth. Non-foods increased about 12.4%, aided by “cost efficiencies from our Asia consolidation initiatives” and strength in casual apparel—particularly activewear—and small appliances. Price also cited a SharkNinja product assortment as part of a “treasure hunt” strategy. Soft lines benefited from a January domestics white sale promotion that “more than doubled sales compared to the prior year,” he said.
Food service and bakery increased approximately 12.2%, and health services (optical, audiology, and pharmacy) rose about 13%.
PriceSmart also discussed private label and pricing actions. Price said that on a comparable basis, excluding a reclassification of the produce category, private label penetration increased 50 basis points in the first six months of fiscal 2026. Using an “updated methodology,” private label penetration was 26.6% of total merchandise sales. He cited new items including avocado oil, fresh chicken, and purified drinking water, and said the company has passed savings through to members as commodity costs declined, including price reductions on extra virgin olive oil (31.5%), frozen french fries (8.9%), and mozzarella cheese (5.8%).
On digital, Price said Q2 digital channel sales reached a record $94.1 million, up 23.4% year over year, representing 6.4% of net merchandise sales. Orders placed directly through the website or app grew 10.9%, with average transaction value up 10.8%. As of Feb. 28, 74.7% of members had created an online profile, and “more than one in four” had made a purchase through the website or app. The company began migrating its mobile app to fully native iOS and Android architectures to improve speed and reliability, Price added.
Membership growth and renewal rate hits a record
Membership accounts rose 7.9% year over year to “almost 2.1 million,” and the 12-month renewal rate reached 90.2% as of Feb. 28, which Price called an all-time high. He said a key initiative is expanding the Platinum Membership base—its premium tier that offers an annual cashback reward on eligible purchases. Platinum represented 19.5% of total membership accounts, up from 14.5% a year earlier.
Price said membership income as a percentage of revenue increased to 1.6% in Q2, compared with 1.5% in the prior-year quarter, “driven in part by the shift toward Platinum Membership.”
Expansion plans: Dominican Republic, Jamaica, Costa Rica, Guatemala, and Chile
Price outlined new club development and market entry work. The company plans to open its sixth warehouse club in the Dominican Republic in La Romana “early next month,” highlighting energy- and sustainability-oriented design features such as solar panels, a heat reclamation water system, and a CO2 refrigeration system.
In Jamaica, Price said two clubs are under construction—Montego Bay and South Camp Road in Kingston—expected to open in summer and winter 2026, respectively. He noted “recovery efforts have been strong” after Hurricane Melissa, with market indicators suggesting a robust 2025–2026 tourism season.
Price also said the company purchased land in fiscal Q2 for a 10th club in Costa Rica in Ciudad Quesada and said it is “anticipated to open this summer.” In Guatemala, the company leased land in fiscal Q3 for an eighth club in Villa Nueva, anticipated to open in spring 2027; Price said the company has begun initial earthworks while still awaiting remaining permits and can cancel the lease if permits are not obtained.
Once five new clubs are open, Price said PriceSmart would operate 61 warehouse clubs.
On Chile, Price said it remains a “top priority,” and the company has signed executory agreements for two prospective club sites while pursuing additional locations. In Q&A, Price said the company has not seen permitting take longer than in other markets and emphasized that PriceSmart typically announces openings only after permits are in hand. He also described Chile as a “very advanced market” with high-quality distribution and processing capabilities, strong consumer digital adoption, and demand for international goods.
In response to a question about accelerated opening dates for planned clubs, Price said permits arrived earlier than expected and added that he pushes teams to open sooner because earlier openings improve investment payback and returns.
Margins improve; currency volatility weighs on other expense
Chief Financial Officer Gualberto Hernandez said gross margin as a percentage of net merchandise sales increased 50 basis points to 16.1% in Q2, attributing the change mainly to product mix—particularly within non-food—and cost savings from Asia consolidation initiatives. Total revenue margin improved 60 basis points to 17.7%, which Hernandez said was driven by warehouse sales margins and “good results in membership renewals and Platinum growth.”
SG&A increased to 12.7% of total revenues in Q2 versus 12.4% in the prior-year quarter. Hernandez attributed the increase primarily to the appreciation of the Colombian peso and its impact on warehouse expenses, continued technology investments, and executive officer compensation not incurred in prior years.
Operating income increased 15.6% year over year to $75.4 million in Q2, and rose 12% to $138.3 million for the first six months.
Below operating income, Hernandez said the company recorded an $8.7 million net loss in other expense in Q2, compared with a $5.1 million net loss a year earlier. He attributed the increase primarily to foreign currency-related losses, “predominantly from unrealized non-cash losses” tied to revaluation of a net U.S. dollar monetary asset position in Costa Rica following significant appreciation of the Costa Rican colón in February. He added that the loss was partially offset by lower foreign currency transaction costs in Trinidad due to fewer sourcing transactions, though the company expects more transactions and additional costs later in the fiscal year. Hernandez said the company is exploring options to expand its hedging program in select markets amid greater exchange-rate volatility.
Net income for Q2 was $49.1 million, or $1.62 per diluted share, up from $43.8 million, or $1.45 per diluted share, in the prior-year quarter. Adjusted EBITDA was $99.7 million versus $87.0 million a year earlier. For the first six months, net income was $89.3 million ($2.91 per diluted share) and adjusted EBITDA was $186.6 million.
On liquidity, Hernandez said PriceSmart ended the quarter with $195.1 million in cash, cash equivalents, and restricted cash, plus $149.7 million of short-term investments. He noted that as of Feb. 28, 2026, the company held TTD 76.9 million in Trinidad-denominated cash equivalents and short-term investments that could not readily be converted to U.S. dollars.
The company declared an annual cash dividend in February totaling $1.40 per share, an 11.1% increase over last year, which Hernandez said marked “five consecutive years of increases.”
Management also addressed trade and geopolitical issues. Price said that because many products are consolidated through the Miami distribution center and “shipped in bond” (not nationalized in the U.S.), U.S. import tariffs “do not apply to most of our merchandise,” and the company is not owed a refund tied to a recent U.S. Supreme Court ruling invalidating certain tariffs. On Iran-related conflict risk, Price said the company is monitoring potential impacts to transportation costs, including fuel, and possible delays, though he said the company has not experienced major supply-chain disruptions so far.
Looking into the following month, Price provided a sales update noting that calendar timing of Semana Santa would skew March comparability. He said comparable net merchandise sales for the four weeks ended March 29, 2026 increased 12.3% in U.S. dollars and 9.2% in constant currency.
About PriceSmart NASDAQ: PSMT
PriceSmart, Inc NASDAQ: PSMT is a U.S.-based retailer specializing in membership warehouse clubs. Founded in 1993, the company operates under a business model that offers bulk quantities of goods at discounted prices to individuals and businesses that purchase annual memberships. PriceSmart's value proposition centers on low-cost operations, high-volume purchasing, and a no-frills shopping environment designed to pass savings directly to its members.
The company's product assortment covers a broad range of merchandise categories, including groceries and fresh produce, household essentials, electronics, appliances, office supplies, furniture, and health and beauty items.
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