PriceSmart, Inc.
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Item 1. Business
General
PriceSmart was founded in 1996 by Sol and Robert Price, the creators of Price Club, the original warehouse club operator. The mission of PriceSmart is to operate its warehouse club business in Central America, the Caribbean and South America at operating standards as good as, or superior to, warehouse club operations in the United States.
As of August 31, 2025, we had 56 warehouse clubs in operation in Central America, the Caribbean and Colombia. In addition, we are continuing to advance our planned expansion into Chile, which we believe is a promising new market for our business model. We believe PriceSmart has become one of the most respected and trusted brands in the countries where we operate and with over two million membership accounts, and almost four million cardholders, we believe PriceSmart is an essential part of the shopping experience for consumers and small businesses in PriceSmart’s markets.
PriceSmart sources approximately half of its merchandise from suppliers within Latin America and the Caribbean, with the balance of merchandise sourced throughout the rest of the world. Product selection includes basic consumable merchandise for consumers and businesses, “Member’s Selection®” private label merchandise and consumable and non-consumable products that are often not otherwise available in our markets.
PriceSmart continually focuses on innovation. In recent years, PriceSmart has added optical, audiology, and pharmacy services in many of its locations. Beyond in-club shopping, our Members can shop via our mobile app or online at PriceSmart.com, both of which offer home delivery and curbside pickup via its Click & Go® service. PriceSmart is making significant investments in technology to both improve the digital shopping experience for its Members and to enhance operating efficiencies in its supply chain and the back office.
We seek to be an outstanding place to work and provide safe and pleasant working environments for our over 12,000 employees, along with excellent pay and benefits, including healthcare coverage and retirement benefits.
PriceSmart is committed to improving the quality of life for people living in the communities in which it does business. In partnership with Price Philanthropies Foundation, PriceSmart provides school supplies to approximately 140,000 children, and eye exams to thousands of children through the Aprender y Crecer program. In addition, the PriceSmart Foundation makes grants to support youth workforce development and small business growth in PriceSmart markets.
We believe that operating our business at the highest standards, providing outstanding jobs for our employees and being good stewards of the communities in which we operate result in PriceSmart being a good investment for our stockholders.
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The number of warehouse clubs for each country or territory were as follows:
Country/Territory (1) | Number of Warehouse Clubs in Operation as of August 31, 2024 | Number of Warehouse Clubs in Operation as of August 31, 2025 | Anticipated Warehouse Club Openings in Fiscal Year 2026 | Anticipated Warehouse Club Openings in Fiscal Year 2027 | ||||||||||||||||||
| Colombia | 10 | 10 | — | — | ||||||||||||||||||
| Costa Rica | 8 | 9 | — | — | ||||||||||||||||||
| Panama | 7 | 7 | — | — | ||||||||||||||||||
| Guatemala | 6 | 7 | — | — | ||||||||||||||||||
| Dominican Republic | 5 | 5 | 1 | — | ||||||||||||||||||
| Trinidad | 4 | 4 | — | — | ||||||||||||||||||
| El Salvador | 4 | 4 | — | — | ||||||||||||||||||
| Honduras | 3 | 3 | — | — | ||||||||||||||||||
| Nicaragua | 2 | 2 | — | — | ||||||||||||||||||
| Jamaica | 2 | 2 | 1 | 1 | ||||||||||||||||||
| Aruba | 1 | 1 | — | — | ||||||||||||||||||
| Barbados | 1 | 1 | — | — | ||||||||||||||||||
| U.S. Virgin Islands | 1 | 1 | — | |||||||||||||||||||
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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PRICESMART, INC.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements concerning PriceSmart, Inc.'s ("PriceSmart", the "Company", "we" or "our") anticipated future revenues and earnings, adequacy of future cash flows, digital and technological initiatives, proposed warehouse club and distribution center openings, the Company's performance relative to competitors and related matters. These forward-looking statements include, but are not limited to, statements containing the words “expect,” “believe,” “will,” “may,” “should,” “project,” “estimate,” “anticipated,” “scheduled,” “intend,” and like expressions, and the negative thereof. These statements are subject to risks and uncertainties that could cause actual results to differ materially including but not limited to the risks detailed in the Annual Report on Form 10-K for the fiscal year ended August 31, 2025 filed with the United States Securities and Exchange Commission (“SEC”) on October 30, 2025 under the heading “Part I. Item 1A. Risk Factors" and "Part I Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements, except as required by law. In addition, these risks are not the only risks that the Company faces. The Company could also be affected by additional factors that apply to all companies operating globally and in the U.S., as well as other risks that are not presently known to the Company or that the Company currently considers to be immaterial.
Overview
PriceSmart was founded in 1996 by Sol and Robert Price, the creators of Price Club, the original warehouse club operator. The objective of PriceSmart is to operate its warehouse club business in Central America, the Caribbean and South America at operating standards as good as, or superior to, warehouse club operations in the United States.
As of May 31, 2026, we had 57 warehouse clubs in operation in Central America, the Caribbean and Colombia. In addition, we are continuing to advance our planned expansion into Chile, which we believe is a promising new market for our Company. We believe PriceSmart has become one of the most respected and trusted brands in the countries where we operate, and with over two million membership accounts, and over four million cardholders, we believe PriceSmart is an essential part of the shopping experience for consumers and small businesses in PriceSmart’s markets.
PriceSmart sources approximately half of its merchandise from suppliers within Latin America and the Caribbean, with the balance of merchandise sourced from the United States and globally. Product selection includes basic consumable merchandise for consumers and businesses, “Member’s Selection®” private label merchandise and consumable and non-consumable products that are often not otherwise available in our markets.
PriceSmart continually focuses on innovation. Beyond in-club shopping, our Members can shop via our mobile app or online at PriceSmart.com, both of which offer home delivery and curbside pickup via our Click & Go® service. PriceSmart is making significant investments in technology both to improve the online shopping experience for its Members and to enhance operating efficiencies in the supply chain and the back office.
We seek to be an outstanding place to work and provide safe and pleasant working environments for our over 13,000 employees, along with excellent pay and benefits, including healthcare coverage and retirement benefits.
PriceSmart is committed to improving the quality of life for people living in the communities in which it does business. Through a partnership with Price Philanthropies Foundation we provide school supplies to approximately 140,000 children and vision screening and eye exams for thousands of children through the Aprender y Crecer program. In addition, the PriceSmart Foundation makes grants to support youth workforce development and small business growth in PriceSmart markets.
We believe that operating our business at the highest standards, providing outstanding jobs for our employees and being good stewards of the communities in which we operate results in PriceSmart being a good investment for our stockholders.
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The number of warehouse clubs for each country or territory were as follows:
| Country/Territory | Number of Warehouse Clubs in Operation as of May 31, 2025 | Number of Warehouse Clubs in Operation as of May 31, 2026 | Anticipated Warehouse Club Openings in Fiscal Year 2026 | Anticipated Warehouse Club Openings in Fiscal Year 2027 | ||||||||||||||||||||||
| Colombia | 10 | 10 | — | — | ||||||||||||||||||||||
| Costa Rica | 9 | 9 | 1 | 1 | ||||||||||||||||||||||
| Panama | 7 | 7 | — | — | ||||||||||||||||||||||
| Guatemala | 6 | 7 | — | 1 | ||||||||||||||||||||||
| Dominican Republic | 5 | 6 | — | — | ||||||||||||||||||||||
| Trinidad | 4 | 4 | — | — | ||||||||||||||||||||||
| El Salvador | 4 | 4 | — | — | ||||||||||||||||||||||
| Honduras | 3 | 3 | — | — | ||||||||||||||||||||||
| Nicaragua | 2 | 2 | — | — | ||||||||||||||||||||||
| Jamaica | 2 | 2 | — | 2 | ||||||||||||||||||||||
| Aruba | 1 | 1 | — | — | ||||||||||||||||||||||
| Barbados | 1 | 1 | — | — | ||||||||||||||||||||||
| U.S. Virgin Islands | 1 | 1 | — | — | ||||||||||||||||||||||
| Chile | — | — | — | 1 | ||||||||||||||||||||||
| Totals | 55 | 57 | 1 | 5 | ||||||||||||||||||||||
Our Member-facing warehouse clubs are all located in Latin America and the Caribbean. Our two regional distribution centers located in the United States (Miami) and Costa Rica operate in conjunction with our local distribution centers in all of our multi-club markets. Our corporate headquarters, U.S. buying operations and support service center offices are located in the United States. Lastly, we have additional support service centers in some of our markets. Our operating segments currently are the United States, Central America, the Caribbean and Colombia.
In the first quarter of fiscal year 2026, we purchased land for our third warehouse club in Jamaica, located in Montego Bay, approximately 100 miles west from the nearest club in the capital of Kingston. The club will be built on a five-acre property and is anticipated to open in the fall of 2026.
In the second quarter of fiscal year 2026, we purchased land and plan to open our tenth warehouse club in Costa Rica, located in Ciudad Quesada, approximately 47 miles northwest from the nearest club in the capital of San Jose. The club will be built on a six-acre property and is anticipated to open in August 2026.
In the first quarter of fiscal year 2026, we executed a land lease for our fourth warehouse club in Jamaica, located on South Camp Road (Kingston), approximately six miles southeast from the nearest club in the capital of Kingston. The club is under construction on a three-acre property and is anticipated to open in the winter of 2026-27.
In the third quarter of fiscal year 2026, we executed a land lease for our eighth warehouse club in Guatemala, located in Villa Nueva, approximately thirteen miles south from the nearest club in the capital of Guatemala City, subject to necessary permits being obtained. The club will be built on a five-acre property and is anticipated to open in the winter of 2027.
In the third quarter of fiscal year 2026, we executed a lease for our first warehouse club in Chile in Comuna Las Condes, Santiago. The club will be located within the Mallplaza Los Dominicos shopping center and is anticipated to open in the spring of 2027.
In the fourth quarter of fiscal year 2026, we purchased land and plan to open our eleventh warehouse club in Costa Rica, located in Santo Tomas de Santo Domingo (Heredia), approximately four miles east from the nearest club in Heredia. The club will be built on a six-acre property and is anticipated to open in the spring of 2027.
Once these six new clubs are open, the Company will operate 63 warehouse clubs.
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We continue to evaluate opportunities to expand our warehouse club operations in our existing markets and to assess potential entry into new markets. In Chile, in addition to our planned warehouse club in the Mallplaza Los Dominicos shopping center, we have entered into executory agreements to acquire land for two additional potential warehouse clubs, subject to normal contingencies.
Factors Affecting the Business
Overall economic trends, foreign currency exchange volatility, and other factors impacting the business.
Our sales and profits vary from market to market depending on general economic factors, including Gross Domestic Product ("GDP") growth; consumer preferences; foreign currency exchange rates; political and social conditions; local demographic characteristics (such as population growth); the number of years we have operated in a particular market; and the level of retail and wholesale competition in that market. The economies of many of our markets are dependent on foreign trade, tourism, remittances from foreign workers located in the United States to individuals or family members in their home countries, and foreign direct investments. Uncertain economic conditions and a slowdown in global economic growth and investment may impact the economies in our markets, causing significant declines in GDP and employment and devaluations of local currencies against the U.S. dollar.
Inflationary pressures could significantly impact product costs, and commodity price increases have and could again impact our financial results and could lead to reduced sales, fewer units sold, and/or margin pressure. For example, we are monitoring the resolution of the conflict with Iran, including the impact on global commodity prices and potential shipping and logistics disruptions. We may experience increases in transportation costs or delays in the shipment or delivery of our products.
Currency fluctuation can be one of the largest variables affecting our overall sales and profit performance because many of our markets are susceptible to foreign currency exchange rate volatility. As of May 31, 2026, some markets, primarily Colombia and Costa Rica, benefited from currency appreciation, which was partially offset by currency devaluations we experienced in Honduras, when compared to May 31, 2025. During the first nine months of fiscal years 2026 and 2025, approximately 81.0% and 80.0%, respectively, of our net merchandise sales were in currencies other than the U.S. dollar. Of those sales, 48.8% and 49.3% consisted of sales of products we purchased in U.S. dollars.
A devaluation of local currency reduces the value of sales and membership income that is generated in that country when translated to U.S. dollars for our consolidated results. In addition, when a local currency experiences devaluation, we may elect to increase the local currency price of imported merchandise to maintain our target margins, which could impact demand for the merchandise affected by the price increase. Alternatively, we may elect not to raise prices to fully cover the impact of the devaluation, adversely affecting our margins. For example, during fiscal year 2023, the currency in Colombia devalued approximately 15%, but we selectively held pricing steady or took pricing actions to mitigate declines in demand, which negatively impacted our consolidated total gross margin percentage. We may also modify the mix of imported versus local merchandise and/or the source of imported merchandise to mitigate the impact of currency fluctuations. Information about the effect of local currency devaluations is discussed further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net Merchandise Sales and Comparable Sales.”
Our wallet-share capture of total retail and wholesale sales can vary from market to market due to competition and the availability of other shopping options for our Members. Demographic characteristics within each of our markets can affect both the overall level of sales and future sales growth opportunities. Certain island markets, such as Aruba, Barbados and the U.S. Virgin Islands, offer limited upside for sales growth given their overall market size.
We continue to face the risk of political instability which may have significant effects on our business. For example, protestors set up roadblocks in Panama during October and November 2023 as a reaction to an agreement between the Panamanian government and a mining company, disrupting traffic to our clubs throughout most of the market. In the third quarter of fiscal year 2025, Panama once again experienced widespread protests and social unrest against the government. Roadblocks in Guatemala in October 2023 related to election protests also limited access to certain of our warehouse clubs. Civil unrest in Colombia in response to tax reform and austerity measures paralyzed significant portions of the country’s infrastructure during the third quarter of fiscal year 2021.
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Our operations are subject to volatile weather conditions and natural disasters. For example, in October 2025, Hurricane Melissa brought catastrophic winds, flash flooding and storm surge throughout the island of Jamaica resulting in the closure of our Jamaica clubs for two days. Although our warehouse clubs were not significantly affected and we were able to manage our supply chain to keep our warehouse clubs stocked with merchandise, similar natural disasters could adversely impact our overall sales, costs and profit performance in the future.
At times we face difficulties in the shipment of, and the risks inherent in the importation of, merchandise to our warehouse clubs. One of those difficulties is possible governmental restrictions on the importation of merchandise. In late May 2023, disputes with Nicaraguan customs and tax authorities resulted in delays in the issuance of our importation clearance, and general delays in the customs inspection process. While this situation had occurred frequently prior to May 2023, we generally were able to plan around these import blockages and resume imports within a matter of days. However, the 2023 delay in obtaining importation clearance resulted in our being unable to import merchandise into Nicaragua for several weeks in June 2023. While our tax clearances and imports have returned to a normal cadence, we could see delays of imports into Nicaragua again as well as in other jurisdictions in which we operate.
Our operations depend on shipping, trucking, ports and other elements of the supply chain that often rely on unionized labor. A work stoppage or other limitation on operations from union or other labor-related matters could occur for any number of reasons, including as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiation of new collective bargaining agreements. For example, while it did not impact our export activities, we experienced a brief disruption to the flow of imported merchandise into our Miami distribution center because of the U.S. dockworkers strike in October 2024.
Current uncertainties about U.S. tariffs and reciprocal tariffs may have an adverse effect on our Company. On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Power Act (the "IEEPA Decision"). However, immediately following the IEEPA decision, the U.S. government initiated new tariffs under Section 122 of the Trade Act of 1974, which were struck down by the U.S. Court of International Trade and are currently under appeal. Our Miami Distribution Center, which operates within a Free Trade Zone ("FTZ"), has helped us avoid potential economic risks, and as a result, we did not pay tariffs and are not owed a refund.
In July 2025, the United States enacted significant tax legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent many provisions of the Tax Cuts and Jobs Act of 2017 and introduces additional changes affecting individuals and businesses. Key business related provisions include the continuation of the 21% federal corporate income tax rate, enhancements to bonus depreciation and expensing rules, and modifications to certain international provisions, including Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income deductions.
We have reviewed the OBBBA and continue to monitor and model its potential impact on our operations and effective tax rate. Based on our current analysis of the Company's operating profile, we do not expect material effects on our 2026 fiscal year results or to our results going forward, considering our existing tax profile. Most provisions that represent substantive changes to existing law, including adjustments to international tax regimes and certain deduction limitations, are scheduled to take effect during our fiscal year 2027.
Changes in tax laws, increases in the enacted tax rates, adverse outcomes in connection with tax audits in any jurisdiction, or any change in the pronouncements relating to accounting for income taxes could have a material adverse effect on our financial condition and results of operations. In one of the countries where we operate, the government made changes several years ago in the method of computing minimum tax payments, under which the government sought to require retailers to pay taxes based on a percentage of sales if the resulting tax were greater than the tax payable based on a percentage of income (Alternative Minimum Tax or "AMT"). We, together with our tax and legal advisers, appealed these interpretations and litigated our cases in the country’s court system. Nevertheless, in fiscal year 2023, we recorded a $7.2 million charge to settle the minimum tax payment dispute. To address the inherent risk of operating in a country in which tax legislation changes can significantly impact our business because of our low-margin business model and in which our ability to successfully appeal the application of these taxes is limited, we have increased prices in this market to offset or partially offset the rise in costs to comply with the annual AMT payment. These and other challenges may persist or become more acute and could have a material adverse effect on our business and results of operations.
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From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity). This impedes our ability to convert local currencies obtained through merchandise sales into U.S. dollars to settle the U.S. dollar liabilities associated with our imported products or otherwise fund our operations. This illiquidity also increases our foreign exchange exposure to any devaluation of the local currency relative to the U.S. dollar. Additionally, the Company may incur significant premium costs to convert our local currencies into available tradable currencies and U.S. dollars. For instance, since fiscal year 2017, we have experienced this situation in Trinidad and have been unable to source a sufficient level of tradable currencies. We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies. Our balance as of May 31, 2026 of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollars was $44.1 million, a decrease of $56.4 million from the peak of $100.5 million as of November 30, 2020. However, as the Trinidad central bank strictly manages the exchange rate of the Trinidad dollar with the U.S. dollar and affects the level of U.S. dollar liquidity in the market through its interventions, we are subject to continued challenges in converting our Trinidad dollars to U.S. dollars, as well as being exposed to the risk of a potential devaluation of the currency. In July 2025 and again in the third quarter of fiscal year 2026, the Company entered into financing transactions to provide our Trinidad subsidiary with additional U.S. dollar liquidity needed to meet its operational needs and help reduce the shortfall in U.S. dollar sourcing due to continued illiquid foreign exchange conditions in that market. While we currently expect to convert increased amounts of Trinidad dollars going forward, the timing and availability of U.S. dollars remains uncertain, and we may incur significant premium costs to complete such conversions.
While we are currently able to source substantially all the U.S. dollars that we need in Honduras, we faced similar U.S. dollar liquidity challenges in Honduras during fiscal year 2023 through much of fiscal year 2025, and the central bank still has strict controls in place that impact the availability of U.S. dollars.
During fiscal year 2026, our Costa Rica subsidiary recognized unrealized foreign currency losses primarily related to the revaluation of U.S. dollar-denominated assets and liabilities held in that market. Our balance as of May 31, 2026 of U.S. dollar-denominated cash and cash equivalents, short-term investments, and other assets and liabilities in our Costa Rican subsidiary was $76.5 million. Refer to “Management’s Discussion & Analysis – Other Expense, Net” for additional information.
Mission
PriceSmart's mission is to provide all Members an outstanding shopping experience with high quality, exciting merchandise and services at the lowest possible prices.
Purpose
PriceSmart's purpose is to improve the lives and businesses of our Members, our employees and our communities through the responsible delivery of the best quality goods and services at the lowest possible prices. We aim to serve as a model company, which operates profitably and provides a good return to our investors, by providing Members in emerging and developing markets with exciting, high-quality merchandise sourced from around the world and valuable services at compelling prices in safe U.S.-style clubs and through PriceSmart.com. We prioritize the well-being and safety of our Members and employees. We believe we provide good jobs, excellent wages and benefits and opportunities for advancement. We strive to treat our suppliers right and empower them when we can, including both our regional suppliers and those from around the world. We try to conduct ourselves in a socially responsible manner as we endeavor to improve the quality of the lives of our Members and their businesses, while respecting the environment and the laws of all the countries in which we operate. We also believe in facilitating philanthropic contributions to the communities in which we do business. We charge Members an annual membership fee that enables us to operate our business with lower margins than traditional retail stores. As we continue to invest in technological capabilities, we believe we are enhancing our capabilities to drive sales, operational efficiencies, and provide a better Member experience. We believe we are well positioned to blend the excitement and appeal of our brick-and-mortar business with the convenience and additional benefits of online shopping and services, while simultaneously enhancing Member experience and engagement.
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Growth
As we look to the future, our Company is focused on three major drivers of growth:
•Invest in Adding New PriceSmart Locations, Expanding into New Markets, Remodeling Current PriceSmart Clubs and Opening More Distribution Centers
•Increase Membership Value
•Drive Incremental Sales via PriceSmart.com and Enhanced Digital and Technological Capabilities
I.Invest in Adding New PriceSmart Locations, Expanding into New Markets, Remodeling Current PriceSmart Clubs and Opening More Distribution Centers. We continue to pursue opportunities to add new warehouse clubs in our existing markets and to assess opportunities in new markets. We have acquired land for three new warehouse clubs and entered into leases for three new warehouse clubs. These warehouse clubs will be our third and fourth warehouse clubs in Jamaica, our tenth and eleventh warehouse clubs in Costa Rica, our eighth warehouse club in Guatemala, and our first warehouse club in Chile. Once these six new clubs are open, PriceSmart will operate 63 warehouse clubs in total. In addition, in Chile, we have entered into executory agreements for two potential sites for two new warehouse clubs and are actively reviewing other potential sites. As part of our expansion into Chile, we have hired local consultants to assist us, appointed a country general manager, begun building our local team and opened a central office in Chile.
Additionally, we believe that one of the quickest and most effective ways to increase sales and profitability is to increase the size and efficiency of our existing warehouse clubs and the number of parking spaces at our high-volume locations. To support this strategy, we plan to begin warehouse club and parking lot expansions and remodels in fiscal year 2026 and 2027 in Via Brasil, Panama and Barbados. During fiscal year 2023, we entered into a lease agreement to relocate and extend the lease term for our Miraflores club, which is our highest selling location in Guatemala. The new warehouse will have increased sales floor square footage and a greater number of parking spaces, along with covered parking for our Members. We expect to relocate our Miraflores club to this new location in the first half of calendar year 2028.
We are enhancing our distribution and logistics network through the opening of distribution centers in China and in each of our multi-club markets, either operated by PriceSmart or through the use of third-party logistics providers. We completed full implementation of these distribution centers in China in the second quarter of fiscal year 2026. These distribution centers have helped reduce landed costs and lead times (via direct shipments from Asia to our local markets). In addition to our regional distribution center in Costa Rica, we have PriceSmart-operated distribution centers in various stages of development and implementation in other key markets. In the second quarter of fiscal year 2026, we opened a distribution center in Trinidad. In the third quarter of fiscal year 2026, we opened a distribution center in Colombia. In addition, we plan to open a distribution center in Jamaica during fiscal year 2026 and a distribution center in the Dominican Republic during fiscal year 2027. We also expect to relocate and consolidate our cold regional distribution center into the existing regional distribution center in Miami during fiscal year 2027.
II.Increase Membership Value. At PriceSmart, we are dedicated to attracting new Members and fostering long-term loyalty by continually enhancing the value of membership. In addition to providing low prices on merchandise, we seek to provide Members with greater convenience and an expanding range of services. This includes access to PriceSmart.com for online shopping, seamless club pickup and delivery services, and our comprehensive well-being initiative. Members enjoy optical services with free eye exams, affordably priced eyeglass frames, audiology services with hearing tests, and competitively priced hearing aids. In select markets, we offer pharmacy services to further enrich the PriceSmart membership experience. We increased the membership fee by $5 in all but one market during fiscal year 2024 and may consider further adjustments as member benefits and value continue to grow.
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We focus on the growth of our membership base, Member renewal rates and average ticket as part of determining how Members see the value we offer. A key driver of our membership strategy is the Platinum Membership, which is designed to offer even more value to our most engaged Members. Platinum Members enjoy exclusive benefits, including an annual cashback reward on eligible purchases, which directly translates to savings that reward loyalty and increase purchasing power. By offering tangible financial rewards, we believe Members can derive maximum value from their membership, particularly when paired with the PriceSmart co-branded credit card which offers an additional cash back incentive for Members with the card. Platinum Members tend to demonstrate higher renewal rates and increased spending compared to other membership tiers. Platinum Membership accounts were 21.3% of our total membership base as of May 31, 2026, an increase from 16.1% as of May 31, 2025. This directly contributes to the Company's revenue growth and reinforces our commitment to providing best-in-class value for our Members.
Additionally, our private-label products that we sell under the “Member’s Selection®” brand plays a crucial role in enhancing the membership value proposition. We believe these branded products, available only at PriceSmart, deliver superior value while maintaining the high standards that our Members expect. Sourced with care and designed to meet everyday needs, “Member’s Selection®” products range from pantry staples to household essentials, providing affordable alternatives without compromising on quality. During the first nine months of fiscal year 2026, our private-label sales represented 26.7% of total net merchandise sales, down slightly from 27.7% in the same period of fiscal year 2025. In the first quarter of fiscal year 2026, the Company discontinued selling produce under the “Member’s Selection®” brand as we determined that these products no longer aligned with the value proposition we strive to deliver with our private-label products. Excluding discontinuation of produce under the “Member’s Selection®” brand, our private-label sales, as a percentage of total net merchandise sales, increased by 40 basis points compared to the same period of fiscal year 2025.
Our strategy is to offer our Members a curated selection of high‑quality merchandise at prices we believe consistently deliver strong value across our markets. Our model focuses on fast‑turning items, with limited variations in styles, sizes, and colors to maximize efficiency and drive savings. We offer a limited number of stock keeping units ("SKUs") with large pack sizes. Our "Treasure Hunt" experience offers the best value on exclusive or one-time-buy merchandise. By continuously enhancing our benefits and maintaining a strong focus on membership growth, renewal rates, and Member spending, we provide our Members with unmatched value, no matter how, when or where they choose to shop.
III.Drive Incremental Sales via PriceSmart.com and Enhanced Digital and Technological Capabilities. We’ve continued to tailor our digital experience to try to exceed our Members' expectations of how, when and where they want to shop. In the third quarter of fiscal year 2026, our digital channel sales reached $99.6 million, a 26.2% increase year-over-year, representing 6.9% of total net merchandise sales. We continue to modernize our processes and technology across the organization. During the third quarter of fiscal year 2026, we made further progress in our migration to the RELEX supply chain and inventory management software platform. We expect to complete the implementation in the second quarter of fiscal year 2027. We believe this upgraded technology enhances employee productivity and is designed to improve inventory management, reduce spoilage and increase in‑stock availability, driving both sales and operating efficiency.
We finalized implementing a new point-of-sale system, Elera, a Toshiba product, in all of our English-speaking markets in the Caribbean and one of our Spanish-speaking countries in Central America, and we are continuing the rollout of Elera in the remainder of our Spanish‑speaking markets. We believe with this upgraded technology we can achieve faster checkout times, improve employee productivity and enhance our payment option capabilities.
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In the third quarter of fiscal year 2026, we continued advancing the implementation of Workday's human capital management system to replace legacy human resource systems. This technology upgrade is designed to enhance the employee experience with modern, user-friendly tools, while improving processes and efficiencies, strengthening compliance and providing scalable, integrated data to support future growth. We also progressed further in our multi‑phase implementation of the E2Open Global Trade Management platform during the third quarter of fiscal year 2026. This platform is designed to enhance automation, compliance, and controls across global import and export operations. Once fully implemented, we believe this platform will strengthen trade compliance, improve data visibility, and support scalable international growth.
During the third quarter of fiscal year 2026, we continued the migration of our mobile application to fully native iOS and Android architectures to enhance speed, reliability, and accessibility for our Members. By solidifying our digital foundation and enabling faster deployment of new features, we believe we are well positioned to deliver an outstanding shopping experience while continuing to reduce costs.
We also continued development of our Membership Omnichannel Transformation ("MOT"), a unified platform designed to streamline the full membership lifecycle across all channels and geographies. We expect MOT to consolidate member identity, transaction history, and interaction data into a single system of record, replacing fragmented legacy processes with a consistent, auditable framework. By standardizing how enrollment, renewal, upgrades, and in-club and digital transactions are processed globally, we believe MOT will improve data quality, reduce friction in the member experience, and increase operational efficiency across our teams. We also believe capturing this data through MOT will allow us analytical opportunities to better understand Member preferences and trends.
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Financial highlights for the third quarter of fiscal year 2026 included:
•Total revenues increased 12.5% over the comparable prior year period.
•Net merchandise sales increased 12.5% over the comparable prior year period. We ended the quarter with 57 warehouse clubs compared to 55 warehouse clubs at the end of the third quarter of fiscal year 2025. Net merchandise sales - constant currency increased 8.5% over the comparable prior-year period.
•Comparable net merchandise sales (that is, sales in the 54 warehouse clubs that have been open for more than 13 ½ calendar months) for the 13 weeks ended May 31, 2026 increased 10.7%. Comparable net merchandise sales - constant currency for the 13 weeks ended May 31, 2026 increased 6.9%.
•Membership income for the third quarter of fiscal year 2026 increased 17.6% to $25.7 million over the comparable prior-year period.
•Total gross margins (net merchandise sales less associated cost of goods sold) increased 14.0% over the prior year period, and merchandise gross profit as a percent of net merchandise sales was 16.0%, an increase of 20 basis points when compared to the same period in the prior year.
•Selling, general and administrative expenses increased 13.4% compared to the third quarter of fiscal year 2025, primarily due to increases in warehouse club and other operations costs. Selling, general and administrative expenses as a percentage of total revenues in the third quarter of fiscal year 2026 increased to 13.3% from 13.2% in the same period last year.
•Operating income for the third quarter of fiscal year 2026 was $65.6 million, an increase of 16.7%, or $9.4 million, compared to the third quarter of fiscal year 2025.
•We recorded a $10.5 million net loss in total other expense in the third quarter of fiscal year 2026 compared to a $7.2 million net loss in total other expense in the same period last year. This increase in total other expense was primarily due to an increase in other expense, net of $3.0 million, which was primarily driven by an increase in total foreign currency transaction losses.
•Our effective tax rate decreased slightly in the third quarter of fiscal year 2026 to 28.0% from 28.4% in the third quarter of fiscal year 2025.
•Net income for the third quarter of fiscal year 2026 was $39.7 million, or $1.28 per diluted share, compared to $35.2 million, or $1.14 per diluted share, in the third quarter of fiscal year 2025.
•Adjusted EBITDA for the third quarter of fiscal year 2026 was $90.4 million compared to $79.0 million in the same period last year.
Financial highlights for the nine months ended May 31, 2026 included:
•Total revenues increased 10.7% over the comparable prior year period.
•Net merchandise sales increased 11.0% over the comparable prior year period. We ended the first nine months of fiscal year 2026 with 57 warehouse clubs compared to 55 warehouse clubs at the end of the first nine months of fiscal year 2025. Net merchandise sales - constant currency increased 8.6% over the comparable prior-year period.
•Comparable net merchandise sales (that is, sales in the 54 warehouse clubs that have been open for more than 13 ½ calendar months) for the 39 weeks ended May 31, 2026 increased 8.8%. Comparable net merchandise sales - constant currency for the 39 weeks ended May 31, 2026 increased 6.4%.
•Membership income for the first nine months of fiscal year 2026 increased 16.9% to $73.6 million over the comparable prior-year period.
•Total gross margins (net merchandise sales less associated cost of goods sold) increased 12.9% over the prior year period, and merchandise gross profit as a percent of net merchandise sales was 16.0%, an increase of 30 basis points when compared to the same period in the prior year.
•Selling, general and administrative expenses increased 12.9% compared to the first nine months of fiscal year 2025, primarily due to increases in warehouse club and other operations costs. Selling, general and administrative expenses as a percentage of total revenues in the first nine months of fiscal year 2026 increased to 13.0% from 12.8% in the same period last year.
•Operating income for the first nine months of fiscal year 2026 was $204.0 million, an increase of 13.5%, or $24.2 million, compared to the first nine months of fiscal year 2025.
•We recorded a $26.5 million net loss in total other expense in the first nine months of fiscal year 2026 compared to a $19.6 million net loss in total other expense in the same period last year. This increase in total other expense was primarily due to an increase in other expense, net of $5.0 million, which was mainly driven by an increase in unrealized losses in the value of U.S. dollar-denominated monetary assets and liabilities in several of our markets and an increase in interest expense, net of interest income, of $1.8 million.
•Our effective tax rate increased slightly in the first nine months of fiscal year 2026 to 27.4% from 27.3% in the first nine months of fiscal year 2025.
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•Net income for the first nine months of fiscal year 2026 was $128.9 million, or $4.18 per diluted share, compared to $116.3 million, or $3.80 per diluted share, in the first nine months of fiscal year 2025.
•Adjusted EBITDA for the first nine months of fiscal year 2026 was $277.0 million compared to $245.1 million in the same period last year.
Non–GAAP (Generally Accepted Accounting Principles) Financial Measures
The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with U.S. GAAP (Generally Accepted Accounting Principles). In addition to relevant GAAP measures, we also provide non-GAAP measures including Adjusted EBITDA, net merchandise sales - constant currency and comparable net merchandise sales - constant currency because management believes these metrics are useful to investors and analysts by excluding items that we do not believe are indicative of our core operating performance. These measures are customary for our industry and commonly used by competitors. However, these non-GAAP financial measures should not be reviewed in isolation or considered as an alternative to any other performance measure derived in accordance with GAAP and may not be comparable to similarly titled measures used by other companies in our industry or across different industries.
Adjusted EBITDA
Adjusted EBITDA is defined as net income before interest expense, provision for income taxes and depreciation and amortization, adjusted for the impact of certain other items, including interest income and other income (expense), net. The following is a reconciliation of our Net income to Adjusted EBITDA for the periods presented:
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| (Amounts in thousands) | May 31, 2026 | May 31, 2025 | May 31, 2026 | May 31, 2025 | ||||||||||||||||||
Net income as reported | $ | 39,691 | $ | 35,158 | $ | 128,948 | $ | 116,346 | ||||||||||||||
| Adjustments: | ||||||||||||||||||||||
| Interest expense | 3,850 | 2,762 | 12,229 | 7,995 | ||||||||||||||||||
| Provision for income taxes | 15,446 | 13,917 | 48,572 | 43,797 | ||||||||||||||||||
| Depreciation and amortization | 24,778 | 22,757 | 73,027 | 65,386 | ||||||||||||||||||
| Interest income | (3,259) | (2,486) | (9,840) | (7,441) | ||||||||||||||||||
Other expense, net (1) | 9,913 | 6,888 | 24,079 | 19,050 | ||||||||||||||||||
| Adjusted EBITDA | $ | 90,419 | $ | 78,996 | $ | 277,015 | $ | 245,133 | ||||||||||||||
(1) Primarily consists of transaction costs of converting the local currencies into available tradable currencies in some of our countries with liquidity issues and foreign currency losses or gains due to the revaluation of monetary assets and liabilities (primarily U.S. dollars) for the three and nine months ended May 31, 2026 and 2025.
Net Merchandise Sales - Constant Currency and Comparable Net Merchandise Sales - Constant Currency
As a multinational enterprise, we are exposed to changes in foreign currency exchange rates. The translation of the operations of our foreign-based entities from their local currencies into U.S. dollars is sensitive to changes in foreign currency exchange rates and can have a significant impact on our reported financial results. We believe that constant currency is a useful measure, indicating the actual growth of our operations. When we use the term "net merchandise sales – constant currency," it means that we have translated current year net merchandise sales at prior year monthly average exchange rates. Net merchandise sales - constant currency results exclude the effects of foreign currency translation. Similarly, when we use the term "comparable net merchandise sales - constant currency," it means that we have translated current year comparable net merchandise sales at prior year monthly average exchange rates. Comparable net merchandise sales – constant currency results exclude the effects of foreign currency translation. Refer to “Management’s Discussion & Analysis – Net Merchandise Sales” and “Management’s Discussion & Analysis – Comparable Net Merchandise Sales” for our quantitative analysis and discussion. Reconciliations between net merchandise sales – constant currency and comparable net merchandise sales - constant currency and the most directly comparable GAAP measures are included where applicable.
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COMPARISON OF THE THREE AND NINE MONTHS ENDED MAY 31, 2026 AND 2025
The following discussion and analysis compares the results of operations for the three- and nine-month periods ended on May 31, 2026 with the three- and nine-month periods ended on May 31, 2025 and should be read in conjunction with the consolidated financial statements and the accompanying notes included elsewhere in this report. Unless otherwise noted, all tables present U.S. dollar amounts in thousands. Certain percentages presented are calculated using actual results prior to rounding.
Net Merchandise Sales
The following tables indicate the net merchandise club sales in the reportable segments in which we currently operate and the percentage growth in net merchandise sales by segment during the three and nine months ended May 31, 2026 and May 31, 2025:
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| May 31, 2026 | May 31, 2025 | ||||||||||||||||||||||||||||||||||
| Amount | % of Net Sales | Increase from Prior Year | Change | Amount | % of Net Sales | ||||||||||||||||||||||||||||||
| Central America | $ | 868,123 | 59.9 | % | $ | 83,348 | 10.6 | % | $ | 784,775 | 60.8 | % | |||||||||||||||||||||||
| Caribbean | 379,148 | 26.1 | 24,264 | 6.8 | 354,884 | 27.5 | |||||||||||||||||||||||||||||
| Colombia | 203,427 | 14.0 | 53,089 | 35.3 | 150,338 | 11.7 | |||||||||||||||||||||||||||||
| Net merchandise sales | $ | 1,450,698 | 100.0 | % | $ | 160,701 | 12.5 | % | $ | 1,289,997 | 100.0 | % | |||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||||||||||||||
| May 31, 2026 | May 31, 2025 | ||||||||||||||||||||||||||||||||||
| Amount | % of Net Sales | Increase from Prior Year | Change | Amount | % of Net Sales | ||||||||||||||||||||||||||||||
| Central America | $ | 2,561,824 | 60.0 | % | $ | 224,386 | 9.6 | % | $ | 2,337,438 | 60.7 | % | |||||||||||||||||||||||
| Caribbean | 1,128,246 | 26.4 | 59,779 | 5.6 | 1,068,467 | 27.8 | |||||||||||||||||||||||||||||
| Colombia | 580,954 | 13.6 | 138,448 | 31.3 | 442,506 | 11.5 | |||||||||||||||||||||||||||||
| Net merchandise sales | $ | 4,271,024 | 100.0 | % | $ | 422,613 | 11.0 | % | $ | 3,848,411 | 100.0 | % | |||||||||||||||||||||||
Comparison of Three and Nine Months Ended May 31, 2026 and 2025
Overall, total net merchandise sales grew by 12.5% for the third quarter of fiscal year 2026 and grew 11.0% for the nine-month period ended May 31, 2026. The third quarter increase resulted from a 7.1% increase in transactions and a 5.0% increase in average ticket. For the nine-month period, the increase resulted from a 7.6% increase in transactions and a 3.1% increase in average ticket. Transactions represent the total number of visits our Members make to our warehouse clubs resulting in a sale and the total number of PriceSmart.com curbside pickup via our Click & Go® service and delivery service transactions. Average ticket represents the amount our Members spend on each visit or PriceSmart.com order. We had 57 clubs in operation as of May 31, 2026 compared to 55 clubs as of May 31, 2025.
Net merchandise sales in our Central America segment increased 10.6% and 9.6%, respectively, during the third quarter and the nine months ended May 31, 2026. This increase had a 650 basis point (6.5%) and 580 basis point (5.8%) positive impact on total net merchandise sales growth for the third quarter and the nine months ended May 31, 2026. All markets within this segment had positive net merchandise sales growth for the third quarter and for the nine months ended May 31, 2026. We opened our ninth warehouse club in Costa Rica in April 2025, our seventh warehouse club in Guatemala in August 2025.
Net merchandise sales in our Caribbean segment increased 6.8% and 5.6%, respectively, during the third quarter and the nine months ended May 31, 2026. These increases had a 190 basis point (1.9%) and 160 basis point (1.6%) positive impact on total net merchandise sales growth for the third quarter and the nine months ended May 31, 2026. All markets within this segment, except USVI, had positive net merchandise sales growth for the third quarter and the nine months ended May 31, 2026. We opened our sixth warehouse club in the Dominican Republic in May 2026.
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Net merchandise sales in our Colombia segment increased 35.3% and 31.3%, respectively, during the third quarter and the nine months ended May 31, 2026 due to the appreciation of the Colombian peso and an increase in the number of transactions. These increases had a 410 basis point (4.1%) and 360 basis point (3.6%) positive impact on total net merchandise sales growth for the third quarter and the nine months ended May 31, 2026.
The following table indicates the impact that currency exchange rates had on our net merchandise sales in dollars and the percentage change from the three- and nine-month periods ended May 31, 2026. When we use the term "net merchandise sales - constant currency," it means that we have translated current year net merchandise sales at prior year monthly average exchange rates. Net merchandise sales - constant currency results exclude the effects of foreign currency translation. Impact of foreign currency is the effect of currency fluctuations on our net merchandise sales.
Three Months Ended May 31, 2026 | |||||||||||||||||||||||||||||||||||
| Net Merchandise Sales | Net Merchandise Sales - Constant Currency | Impact of Foreign Currency Exchange | Net Merchandise Sales Growth | Net Merchandise Sales - Constant Currency Growth | % Impact of Foreign Currency Exchange | ||||||||||||||||||||||||||||||
| Central America | $ | 868,123 | $ | 844,984 | $ | 23,139 | 10.6 | % | 7.7 | % | 2.9 | % | |||||||||||||||||||||||
| Caribbean | 379,148 | 376,907 | 2,241 | 6.8 | 6.2 | 0.6 | |||||||||||||||||||||||||||||
| Colombia | 203,427 | 178,245 | 25,182 | 35.3 | 18.6 | 16.7 | |||||||||||||||||||||||||||||
| Consolidated total | $ | 1,450,698 | $ | 1,400,136 | $ | 50,562 | 12.5 | % | 8.5 | % | 4.0 | % | |||||||||||||||||||||||
Nine Months Ended May 31, 2026 | |||||||||||||||||||||||||||||||||||
| Net Merchandise Sales | Net Merchandise Sales - Constant Currency | Impact of Foreign Currency Exchange | Net Merchandise Sales Growth | Net Merchandise Sales - Constant Currency Growth | % Impact of Foreign Currency Exchange | ||||||||||||||||||||||||||||||
| Central America | $ | 2,561,824 | $ | 2,529,620 | $ | 32,204 | 9.6 | % | 8.2 | % | 1.4 | % | |||||||||||||||||||||||
| Caribbean | 1,128,246 | 1,136,901 | (8,655) | 5.6 | 6.4 | (0.8) | |||||||||||||||||||||||||||||
| Colombia | 580,954 | 512,406 | 68,548 | 31.3 | 15.8 | 15.5 | |||||||||||||||||||||||||||||
| Consolidated total | $ | 4,271,024 | $ | 4,178,927 | $ | 92,097 | 11.0 | % | 8.6 | % | 2.4 | % | |||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-15 | Velasco Francisco | EVP - CLO, CRCO | Sell | -338 | $158.56 | -$53,593 |
| 2026-05-04 | ZURCHER EDGAR | Director | Sell | -2,259 | $155.17 | -$350,529 |
| 2026-04-30 | Hanson Gordon H. | Director | Sell | -635 | $157.60 | -$100,076 |
| 2026-04-23 | PRICE ROBERT E indirect | Director | Sell | -10,000 | $161.79 | -$1,617,928 |
| 2026-04-22 | PRICE ROBERT E indirect | Director | Sell | -10,000 | $159.60 | -$1,595,956 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-10-29 10-K expected by 2026-11-01 (in 112 days)
- ~2027-01-07 10-Q expected by 2027-01-07 (in 182 days)
- ~2027-04-08 10-Q expected by 2027-04-08 (in 273 days)
- ~2027-07-08 10-Q expected by 2027-07-08 (in 364 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-07-08 10-Q Quarterly Report
- 2026-07-08 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-08 10-Q Quarterly Report
- 2026-04-08 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-06 8-K Officer/Director Change; Shareholder Vote Results; Other Events; Financial Statements and Exhibits
- 2026-01-07 10-Q Quarterly Report
- 2026-01-07 8-K Earnings Release; Financial Statements and Exhibits
- 2025-10-30 10-K Annual Report
- 2025-10-30 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-05 8-K/A Officer/Director Change; Financial Statements and Exhibits
- 2025-07-14 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-10 10-Q Quarterly Report
- 2025-06-20 8-K/A Officer/Director Change
- 2025-05-09 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-04-09 10-Q Quarterly Report