PriceSmart Q4 Earnings Call Highlights

Key Points

• PriceSmart reported strong fiscal 2026 results: Fourth-quarter merchandise sales rose 13.8% to nearly $1.5 billion, while full-year sales increased 11.7% to nearly $5.8 billion. Full-year net income grew 12.6% to $166.6 million, or $5.40 per diluted share.
• Membership performance strengthened: Membership accounts increased 8.7% to nearly 2.2 million, renewal rates improved to 90.4%, and higher-priced Platinum memberships reached 23.4% of the base, driving a 17.8% increase in membership income.
• Expansion and digital growth remain central to the strategy: PriceSmart plans to open four additional clubs, including its first Chile location, bringing its expected total to 63 clubs. Digital sales rose 26.3%, although the RELEX forecasting and replenishment project has been delayed beyond the previously targeted second quarter of fiscal 2027.

PriceSmart NASDAQ: PSMT reported higher fourth-quarter and full-year fiscal 2026 sales and earnings, supported by growth in transactions, average ticket size, membership income and digital sales. The company also outlined an expanding club pipeline, including its planned entry into Chile, while noting higher technology, startup and administrative expenses.

For the fourth quarter ended Aug. 31, 2026, net merchandise sales rose 13.8% to nearly $1.5 billion, or 7.8% on a constant-currency basis. Comparable net merchandise sales increased 12.2% in U.S. dollars and 6.2% in constant currency. Total revenue exceeded $1.5 billion.

For the fiscal year, net merchandise sales reached nearly $5.8 billion, up 11.7%, or 8.4% in constant currency. Comparable sales rose 9.6% in U.S. dollars and 6.4% in constant currency. CEO David Price said customers “came more often, and they spent more when they did,” as fourth-quarter average ticket increased 7.5% and transactions rose 5.9%.

Regional Sales and Membership Growth

All three operating regions contributed to quarterly growth. Central America’s net merchandise sales increased 9.5%, or 5.9% in constant currency, while Caribbean sales rose 9.9%, or 8.4% in constant currency.

Colombia posted the fastest reported growth, with fourth-quarter net merchandise sales up 43.2%, or 15.9% in constant currency. Comparable sales in Colombia rose 44.2%, or 16.3% in constant currency. Price said the Colombian peso’s appreciation versus the prior year materially influenced the region’s U.S.-dollar results.

Membership accounts increased 8.7% year over year to nearly 2.2 million, representing more than 4 million cardholders. The company’s trailing-12-month renewal rate improved to 90.4% from 88.8% a year earlier.

Its higher-priced Platinum membership tier represented 23.4% of the membership base at fiscal year-end, up from 17.9% a year earlier. Membership income increased 17.8% to $100.8 million for fiscal 2026, driven primarily by greater Platinum penetration.

Private-label penetration, excluding a produce-category reclassification, rose 20 basis points year over year. Under the company’s updated methodology, Member’s Selection represented 26.9% of total merchandise sales.

Profitability, Expenses and Cash Flow

Fourth-quarter gross margin was 15.8% of net merchandise sales, up 10 basis points from the prior-year quarter. Full-year gross margin rose to 16% from 15.7%, primarily due to changes in product mix.

Operating income increased 8.1% in the fourth quarter to $57 million, though it declined as a percentage of revenue to 3.8% from 4% because of higher general and administrative expenses. For the full year, operating income rose 12.3% to $261 million and remained 4.4% of revenue.

Net income for the quarter was $37.6 million, or $1.21 per diluted share, compared with $31.5 million, or $1.02 per diluted share, a year earlier. Fiscal-year net income reached $166.6 million, or $5.40 per diluted share, up from $147.9 million, or $4.82 per diluted share, in fiscal 2025.

Adjusted EBITDA increased to $83.5 million in the quarter from $75.5 million a year earlier. For the full year, adjusted EBITDA rose 12.4% to $360.5 million.

Chief Financial Officer Gualberto Hernandez said full-year SG&A expenses rose to 13.2% of revenue from 12.9%. He attributed 20 basis points of the increase to technology investments and 10 basis points to a full year of CEO compensation. The company also recorded approximately $1.8 million in costs associated with the discontinuation of audiology services.

PriceSmart ended the fiscal year with $264.7 million in cash equivalents and restricted cash, plus about $111.4 million in short-term investments. Operating cash flow totaled $307.7 million. The company paid $43 million in dividends during the year.

Expansion Plans and Technology Projects

The company opened its 10th Costa Rica club in Ciudad Quesada during August and opened its third Jamaica club in Montego Bay during the first quarter of fiscal 2027. It expects to open four additional clubs: a fourth Jamaica location in Kingston in December 2026; a Guatemala club in Villanueva in late winter 2027; a Costa Rica club in Santo Tomás de Santo Domingo de Heredia in spring 2027; and its first Chile club in Santiago in spring 2027.

Once those sites open, PriceSmart expects to operate 63 warehouse clubs. The company has also entered executory agreements for two additional potential Chile locations and has hired a country general manager and local buying team there.

Digital-channel sales rose 26.3% to $387.4 million in fiscal 2026, representing 6.7% of net merchandise sales. Orders made directly through the website or app grew 9.2%, while average digital transaction value increased 15.5%.

The company said its RELEX forecasting and replenishment system will take longer to complete than previously expected. Price said that local vendor setups, merchandise-management work, process standardization and data changes across multiple countries have proved more complex than anticipated. PriceSmart no longer expects to finish the project by the second quarter of fiscal 2027 and did not provide a revised completion date.

Colombia Costs and Early Fiscal 2027 Sales

In response to an analyst question about Colombian operating margins, Hernandez said the Colombia segment included approximately $4.2 million of Chile startup costs during fiscal 2026. He also cited an approximately $800,000 wealth-tax impact, roughly $450,000 to $500,000 from a plastic tax, and about $9 million in additional expense allocations related to transfer-pricing rules.

Hernandez said PriceSmart views Colombia as a solid business but said reported margin results were affected by those items as well as foreign-exchange dynamics.

Looking ahead, management said it is monitoring higher fuel, freight and food costs, unreliable global shipping schedules and Panama Canal capacity. The company also cited the possibility of a strong El Niño weather pattern.

For the first eight weeks of fiscal 2027, ended Oct. 25, comparable net merchandise sales increased 11.8%, or 6% in constant currency.

About PriceSmart (NASDAQ:PSMT)

PriceSmart, Inc operates membership warehouse clubs serving consumers and businesses in Latin America and the Caribbean. The company offers a broad selection of products at value-oriented prices, including groceries, fresh foods, beverages, household supplies, apparel, appliances, electronics, furniture and other general merchandise.

Through its warehouse clubs and digital commerce platforms, PriceSmart provides shopping and delivery options designed for both individual members and small businesses.

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