PriceSmart, Inc. (NASDAQ: PSMT) Q3 2025 Earnings | 07/14/2025

Leadership Transition and Strategic Priorities Drive Growth at PriceSmart

PriceSmart, Inc. (PriceSmart) held its Q3 2025 earnings conference call, highlighting strong financial performance and outlining strategic initiatives, including a significant leadership transition.

Key Highlights:

• Leadership Change: Robert Price will transition from Interim CEO to Executive Chairman on September 1st, 2025, with David Price stepping into the CEO role. Gualberto Hernandez joined as the new Chief Financial Officer on June 1st, replacing Michael McCleary, who is retiring after over 20 years with the company.

• Strong Financial Performance (Q3 2025):

  • Net Merchandise Sales: Reached almost $1.3 billion, an 8.0% increase (9.5% in constant currency).

  • Comparable Net Merchandise Sales: Increased by 7.0% (8.5% in constant currency).

  • Operating Income: Grew by 12.7% to $56.2 million.

  • Net Income: Increased to $35.2 million ($1.13 per diluted share) from $32.5 million ($1.08 per diluted share) in Q3 2024.

  • Adjusted EBITDA: Was $79 million, up from $71 million in the prior year.

• Segment Performance:

  • Central America: 31 clubs, 7.5% sales increase (7.6% constant currency), 5.7% comparable sales growth.

  • Caribbean: 14 clubs, 8.2% sales increase (9.7% constant currency), 8.6% comparable sales growth.

  • Colombia: 10 clubs, 10.1% sales increase (19.3% constant currency), 9.9% comparable sales growth.

• Membership Growth and Loyalty:

  • Membership accounts grew 5.1% year-over-year to nearly 2 million, with an 88% 12-month renewal rate.

  • Platinum Membership represented 16.1% of the total base (up from 11% in Q3 FY24), offering increased cashback rewards and enhancing member value.

• Real Estate Expansion:

  • Opened a new warehouse club in San Jose, Costa Rica, in April 2025.

  • Plans to open a seventh club in Quetzaltenango, Guatemala, and a third club in La Romana, Dominican Republic, by spring 2026. These openings will bring the total club count to 57.

  • Actively exploring Chile as a potential new market, citing its strong middle class, favorable trade relations, and stable government.

• Supply Chain and Logistics Enhancements:

  • Operating major distribution centers (DCs) in Miami, Costa Rica, and Panama.

  • Planned DC upgrades in Panama and new DCs in Guatemala, Trinidad, and the Dominican Republic for FY2026 to improve product availability and reduce costs.

  • Testing distribution consolidation in China and utilizing own truck fleets for merchandise transport.

  • Leveraging free trade zone operations in the U.S. and Costa Rica for strategic advantage and efficiency.

• Omnichannel and Technology Investment:

  • Digital channel sales grew 19.8% year-over-year to $79 million, representing 6.1% of total net merchandise sales—the highest digital contribution to date.

  • 62% of members have online profiles, with nearly one-third making an online purchase.

  • Migration to the Relux platform is underway, expected to be operational by year-end, to enhance productivity, inventory management, and in-stock availability.

• Merchandise Categories: Strong growth across all categories, with health services (optical, audiology, pharmacy) increasing by 13.9%.

• Balance Sheet & Cash Flow: Ended the quarter with $183.1 million in cash and equivalents, plus $94 million in short-term investments. Net cash provided by operating activities increased by $13.4 million for the first nine months of FY25.

• Trinidad Liquidity: Secured up to $65 million in financing for Trinidad, including a $15 million U.S. dollar loan repaid in Trinidad dollars, to improve liquidity and manage U.S. dollar payables.

• Sustainability: Released its fiscal year 2024 sustainability report, highlighting commitments to environmental and social responsibility.

PriceSmart is focused on enhancing member value, expanding its physical and digital footprint, and optimizing its supply chain to drive continued growth and operational efficiency.