Q3 2025 PriceSmart Inc Earnings Call

Operator: for the third quarter of fiscal year 2025, which ended on May 31st, 2025.

Operator: After remarks from our company's representative, Robert Price, Interim Chief Executive Officer, and Michael McCleary, Executive Vice President, Finance, you will be given an opportunity to ask questions as time permits.

Good afternoon everyone and welcome to price smart inks, earnings release conference. Call for the third quarter of fiscal year 2025 which ended on May 31st 2025

Operator: As a reminder, this conference call is limited to one hour and is being recorded today, Monday, July 14th, 2025.

After remarks from our company's representative, Robert Price, interim, chief executive officer and Michael McCleary Executive, Vice President Finance. You'll be given an opportunity to ask questions as time permits.

Operator: A digital replay will be available shortly following the conclusion of the call through July 21st, 2025, by dialing 888-660-6264 for domestic callers or 646-517-3975 for international callers and entering replay access code 90598.

As a reminder, this conference calls limited to 1 hour and is being recorded today. Monday July 14th 2025

A digital replay will be available shortly following the conclusion of the call.

Michael McCleary: For opening remarks, I would like to turn the call over to PriceSmart's Executive Vice President of Finance, Michael McCleary. Please proceed, sir.

to July 21st, 2025 by dialing 888-660-6264 for domestic callers or 64651 3975 for international callers and entering replay access code, 90598 pound

Speaker Change: For opening remarks, I would like to turn the call over to price smarts Executive. Vice, President Finance. Michael McLaren, please. Proceed sir.

Michael McCleary: Thank you, operator, and welcome to PriceSmart Inc's earnings call for the third quarter of fiscal year 2025, which ended on May 31st, 2025.

Michael McCleary: We will be discussing the information that we provided in our earnings press release and our 10Q, which were both released on July 10th, 2025.

thank you operator and welcome to price martings earnings call for the third quarter of fiscal year 2025 which ended on May 31st 2025

Michael McCleary: Also in these remarks, we refer to non-GAAP financial measures.

We will be discussing the information that we provided in our earnings press release and our 10 Q, which were both released on July 10th 2025.

Michael McCleary: You can find a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures in our earnings press release in our 10-Q.

Also, in these remarks, we refer to non-gaap financial measures

Michael McCleary: These documents are available on our investor relations website at investors.pricesmart.com where you can also sign up for email alerts.

Speaker Change: Website at investors.com where you can also sign up for email alerts.

Michael McCleary: 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. Board 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, July 14, 2025.

Speaker Change: As a reminder, all statements made on this conference call other than statements of historical fact. Our forward-looking statements concerning the company's anticipated plans revenues and related matters.

Speaker Change: We're looking statements include but are not limited to statements containing the words expect. Believe plan will May should estimate and some other expressions.

Michael McCleary: 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 on July 10, 2025, 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.

Speaker Change: All 4 looking statements are based on current expectations and assumptions as of today, July 14th, 2025.

These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risk detailed in the company's most recent and a report on form. 10K, the quarterly report on form. 10 Q filed on July 10th, 2025 and other filings with the SEC which are accessible on the sec's website. At www.sec.gov

Michael McCleary: The company undertakes no obligation to update four lifting statements made during this call.

Speaker Change: These risks may be updated from time to time.

Speaker Change: The company undertakes. No obligation to update 4 looking statements made during this call.

Robert Price: Now I will turn the call over to Robert Price, PriceSmart's Interim Chief Executive Officer. Thank you, Michael, and good day, everyone. Welcome to our third quarter earnings call.

Now, I will turn the call over to Robert Price Vice, Mark's interim, chief executive officer.

Robert Price: Thank you, Michael and good day, everyone. Welcome to our third quarter earnings call.

Robert Price: As we have previously announced, David Price will be PriceSmart's new Chief Executive Officer, effective September 1st, 2025. David is very well prepared for his CEO responsibility. I am looking forward to working with David in my role as Executive Chairman of our company.

Robert Price: As we have previously announced, David Price will be price. Bart's new chief executive officer, effective, September 1st, 2025.

Robert Price: David is very well prepared for his CEO responsibilities.

I am looking forward to working with David in my role as executive chairman of our company.

Robert Price: I would also like to acknowledge Michael McCleary for his many years of dedicated service to our company. most recently as Chief Financial Officer.

I would also like to acknowledge Mychal McLeary for as many years of dedicated service to our company.

Robert Price: most recently, as Chief Financial Officer,

Robert Price: With Michael's retirement, I welcome Walberto Hernandez as PriceSmart's new Chief Executive Officer. Alberto comes with well-prepared for his new responsibilities. with significant senior executive financial experience, including working in the retail industry in South America.

With Michael's retirement, I welcome Alberto Hernandez as price Mart's, new chief executive officer.

Robert Price: Alberto comes with well-prepared for his new responsibilities.

With significant, senior executive Financial experience including working in the retail industry in South America.

Robert Price: As always, I want to express my appreciation to our 12,000 employees. for their dedication to PriceSmart. We are so proud of their many contributions to PriceSmart's success.

Speaker Change: As always, I want to express my appreciation to our 12,000 employees.

Robert Price: For their dedication to Price Mart.

Robert Price: We are so proud of their many contributions to price smart success.

Robert Price: Finally, I want to thank our stockholders for their support and continuing confidence.

David Price: Now it is my pleasure to turn the meeting over to David. Thank you, Robert, and good morning, everyone.

Finally, I want to thank our stockholders for their support and continuing competence.

Now, it is my pleasure to turn the meeting over to David.

David Price: Let me begin by sharing how honored I am to step into the role of CEO of PriceSmart, effective September 1st. Building on the legacy of my father and grandfather, Sol Price, I'm committed to leading with the same values that have guided this company from the beginning. Integrity, Excellence, and Community. Values that are centered on our employees, members, providers, and the communities where we operate. Over the past decade, I've had the opportunity to work across many areas of the business From launching and scaling our digital commerce business, to advancing our sustainability efforts, and more recently, to partnering closely with Robert, John Hildebrandt, and the executive team on our broader operations.

Thank you, Robert and good morning everyone. Let me Begin by sharing how honored I am to step into the role of CEO of price. Mark effective September 1st.

Building on the legacy of my father and grandfather saw price. I'm committed to Leading with the same values that have guided this company from the beginning.

Integrity excellence and community.

values that are centered on our employees members providers in the communities where we operate

over the past decade, I've had the opportunity to work across many areas of the business.

David Price: These experiences have deepened my understanding of what makes PriceSmart different, our purpose, our people, and our model, and sharpened my view of where we can go from here.

From launching and scaling, our digital Commerce, business to advancing our sustainability efforts in more recently to partner closely with Robert, John Hildebrand, and the executive team on our broader operations.

These experiences have deepened. My understanding of what makes price, smart different, our purpose, our people and our model and sharpen my view of where we can go from here.

David Price: As I step into this role, my priorities are grounded in our core values, prioritizing the welfare of our employees, delivering exceptional value to our members. raising the bar on execution and innovation and driving sustainable long-term results for our shareholders.

David Price: As we shared in May, Gualberto Hernandez joined PriceSmart as CFO on June 1st. He brings strong experience in strategic finance and operations, most recently at the Estee Lauder company.

Robert Price: As I step into this role, my priorities are grounded in our core values. Prioritizing the welfare of our employees, delivering exceptional value to our members. Raising the bar on execution and innovation in driving, sustainable long-term results for our shareholders.

David Price: Michael McCleary will be retiring after more than 20 years at PriceSmart, including the last five at CFO.

Speaker Change: As we shared in mayto Hernandez, joined price. Mar to CFO on June 1st. He brings strong experience in strategic finance and operations most recently at the Estee Lauder Companies.

David Price: I want to thank Michael for his outstanding service and welcome Gualberto to the team.

David Price: Now moving on to the main factors and strategic priorities we are focused on to continue increasing sales and member value, starting with real estate. In April 2025, we opened a new warehouse club in Cartago, near the capital of San Jose, in Costa Rica. Additionally, we plan to open our seventh warehouse club in Guatemala, located in Quetzaltenango, approximately 122 miles west from the nearest club in the capital of Guatemala City. This club is in the final phases of construction and is expected to open in August. In the third quarter of fiscal year 2025, we purchased land and plan to open our sixth warehouse club in the Dominican Republic, located in La Romana, approximately 73 miles east from the nearest club in the capital of Santo Domingo.

Speaker Change: My will be retiring after more than 20 years of price Mark, including the last 5 as CFO. I want to thank Michael for his outstanding service and welcome while Berto to the team.

Now, moving on to the main factors and strategic priorities, we are focused on to continue increasing sales and member value.

Speaker Change: Starting with real estate.

Speaker Change: In April 2025, we opened a new Warehouse Club in cartago near the capital of San Jose in Costa Rica. Additionally. We plan to open our seventh Warehouse Club in Guatemala located in Kettle tonongo. Approximately 122 Mi West.

Speaker Change: From the nearest club in the capital of Guatemala City. This club is in the final phases of construction and is expected to open in August.

David Price: The club will be built on a 5-acre property and is anticipated to open in the spring of 2026. Once these tuning clubs are open, PriceSmart will operate 57 warehouse clubs.

Speaker Change: Quarter of fiscal year 2025, we purchased land and plan to open our sixth Warehouse Club. In the Dominican Republic located in La Romana approximately 73 miles east from the nearest club in the capital of San Domingo.

The club will be built on 5, acre property and is anticipated to open in the spring of 2026.

Speaker Change: Once these 2 new clubs are open. Price, Mark will operate 57 Warehouse clubs.

David Price: We continue to pursue opportunities to expand in our existing markets and to assess opportunities in new markets.

David Price: In particular, we are currently evaluating Chile as a potential new market for PriceSmart. We have hired local consultants to help us in this process and are actively looking for potential sites in Chile.

Speaker Change: We continue to pursue opportunities to expand in our existing markets and to assess opportunities in New Markets.

Speaker Change: In particular, we are currently evaluating Chile as a potential new market for Price Market.

David Price: Having recently visited Chile myself, together with other members of our leadership team, I am excited about the potential opportunities this market offers us. However, opening PriceSmart in Chile remains subject to our completing our market analysis, finding appropriate sites, and securing permits.

Speaker Change: We have hired local Consultants to help us in this process and are actively looking for potential sites in Chile. Having recently visited Chile myself together with other members of our leadership team. I am excited about the potential opportunities. This Market offers us, however, opening Price Market in Chile remains subject to our completing our market analysis.

Speaker Change: Finding appropriate sites and securing permits.

David Price: We continue to strengthen our distribution and logistics infrastructure to better serve our members. Today, we operate major distribution centers in Miami, Costa Rica, and Panama.

David Price: In fiscal year 2026, we plan to upgrade our Panama DC to support cold products and to open new DCs in Guatemala, Trinidad, and the Dominican Republic. These local facilities are expected to improve product availability, reduce lead times, and lower landed costs. Along with these new DCs, we are currently testing distribution consolidation in China to streamline shipments directly to our markets. We are exploring ways to enhance logistics in our multiclub markets by utilizing a combination of PriceSmart Managed and third-party operations. In certain countries, we have also introduced the use of our own fleet of trucks to transport merchandise directly to the clubs.

Speaker Change: We continue to strengthen our distribution and Logistics infrastructure to better. Serve our members today we operate major distribution centers in Miami, Costa Rica, and Panama.

Speaker Change: In fiscal year 2026, we plan to upgrade our Panama DC, to support cold products and to open new DCS in Guatemala, Trinidad, and the Dominican Republic.

Speaker Change: These local facilities are expected to improve product availability, reduced lead times and lower landed costs.

Speaker Change: Along with these new DC's we are currently testing distribution consolidation in China streamlined, shipments directly to our markets.

David Price: And a last word on distribution and logistics.

David Price: As international trade becomes more complex, our free trade zone operations in the U.S. and Costa Rica give us a strategic advantage by allowing us to consolidate and export goods without duties or tariffs. We're actively pursuing strategies such as supply chain diversification, expanded offshore consolidation, and increased free trade zone utilization, all to improve efficiency and help offset rising costs for our members.

Speaker Change: We are exploring ways to enhance Logistics in our multi Cloud markets by utilizing a combination of price, Mark, managed and third-party operations in certain countries, we have also introduced the use of our own Fleet of trucks to transport, merchandise directly to the clubs and the last word on distribution and Logistics as International Trade becomes more complex. Our free trade zone operations in, the US in Costa Rica, give us a strategic Advantage by allowing us to consolidate and export goods without duties, or tariffs.

Speaker Change: We're actively pursuing strategies such as supply chain diversification, expanded offshore, consolidation and increased free trade zone utilization. All to improve efficiency and help offset Rising costs for our members.

David Price: Turning now to Other Ways We Are Enhancing Our Membership Beyond Low Price. Our private label, members selection, remains a key part of our value proposition. These high-quality, competitively-priced products offer meaningful savings without compromising on quality. For the first nine months of FY 2025, private label sales represented 27.7% of total merchandise sales of 30 basis points from the same period last year.

Speaker Change: Turning. Now, to other ways, we are enhancing our membership Beyond low prices.

A private label member selection remains a key. Part of our value proposition.

Speaker Change: These high-quality competitively priced products offer, meaningful savings without compromising on quality.

David Price: In Central America, we've renewed and enhanced our co-branded consumer credit card with BAC, effective July 2025. The new agreement offers increased cash back rewards on purchases at PriceSmart, PriceSmart.com, BAC's travel program, and other retailers and services, adding even more value for our We continue to invest in omni-channel capabilities to meet our members where they are. In Q3, digital channel sales reached $79 million, a 19.8% increase year over year, representing 6.1% total net merchandise sales, our highest digital contribution to date. Orders placed directly through our website or app grew 16.7%, with average transaction value up 3.2%.

Speaker Change: For the first 9 months of FY 2025 private label sales represented. 27.7% of total merchandise sales up 30 basis points from the same period last year.

In Central America, we've renewed and enhanced our co-branded consumer credit card with back effective, July 2025. The new agreement offers increased Cash Back Rewards on purchases at price price mark.com backs, travel program and other retailers and services, adding even more value for our members.

Speaker Change: We continue to invest in Omni Channel capabilities, to meet our members, where they are in Q3 digital channel, sales reached 79 million. A 19.8% increase year-over-year, representing 6.1% of total, net merchandise sales, our highest digital contribution to date.

Speaker Change: Orders placed directly through our website or app through 16.7% with average transaction value up. 3.2%

David Price: As of May 31st, 62% of our members had created an online profile, and nearly one-third of those have made a purchase online. We see continued opportunity in this space, and we'll keep investing to enhance the digital experience we offer our members. We're also modernizing our processes and technology. Taking one example, our migration to the RELEX platform is well underway and expected to be substantially operational by year-end. This upgrade enhances employee productivity and is designed to improve inventory management, reduce spoilage, and increase in-stock availability, driving both sales and efficiency.

Speaker Change: As of May 31st.

Speaker Change: 62% of our members had created an online profile and nearly 1/3 of those. Have made a purchase online.

Speaker Change: We see continued opportunity in the space and we'll keep investing to enhance the digital experience. We offer our members

David Price: Lastly, we recently released our Fiscal Year 2024 Sustainability Report, highlighting our commitment to environmental and social responsibility. The full report is available at Investors.PriceSmart.com under the ESG tab, and more information can be found at PriceSmart.org.

Speaker Change: We're also modernizing our processes and Technology taking 1 example. Our migration to the relaxed platform as well underway, and expected to be substantially operational by year end. This upgrade enhances employee productivity and is designed to improve Inventory, management, reduce spoilage and increase in stock availability driving both sales and efficiency.

Speaker Change: Lastly, we recently released our fiscal year 2024 sustainability report, highlighting our commitment to environmental and social responsibility.

Michael McCleary: With that, I'll turn it over to Michael McCleary for the financial review. Thank you, David. We had a strong third quarter as net merchandise sales reached almost $1.3 billion and total revenue was over $1.3 billion. During the first nine months of our fiscal year, net merchandise sales reached over $3.8 billion and total revenue was over $3.9 billion. During the third quarter, Net Merchandise Sales increased by 8% or 9.5% in constant currency and Comparable Net Merchandise Sales increased by 7% or 8.5% in constant currency. For the first nine months of the fiscal year, net merchandise sales increased by 7.2% or 8.2% in constant currency.

Speaker Change: The full report is available at investors.com price.com under the ESG table and more information can be found at price.org with that. I'll turn it over to Michael McCleary for the financial review.

Michael McCleary: Thank you, David.

Michael McCleary: We have a strong third quarter as net merchandise, sales reached almost 1.3 billion dollars and total revenue was over 1.3 billion.

Over 3.9 million.

Michael McCleary: During the third quarter, net merchandise sales increased by 8% or 9.5% in constant currency and comparable. Net, merchandise sales, increased by 7% or 8.5% in constant currency.

Michael McCleary: And comparable net merchandise sales increased by 6.5% or 7.6% in constant currency. By segment, in Central America where we had 31 clubs at quarter end, net merchandise sales increased 7.5% or 7.6% in constant currency. with a 5.7% increase in convertible and merchandise sales or 5.9% in constant currency. All of our markets in Central America had positive comparable net merchandise sales growth. Our Central America segment contributed approximately 350 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the third quarter. In the Caribbean, where we had 14 clubs at quarter-end, net merchandise sales increased 8.2% or 9.7% in constant currency.

Michael McCleary: For the first 9 months of the fiscal year, net merchandise sales increased by 7.2% or 8.2% in constant currency and comparable numbers on merchandise sales, increase by 6.5%, or 7.6% in constant currency.

By segments in Central America where we had 31 clubs at quarter in.

Michael McCleary: Net merchandise, sales increased 7.5% or 7.6% in constant currency.

With a 5.7% increase in comparable, net merchandise sales or 5.9% in constant currency.

all of our markets in Central America had positive comparable Network, merchandise, sales growth,

Michael McCleary: Our Central America, segment contributed approximately 350 basis, points of positive impact to the growth. In total Consolidated comparable, net merchandise sales, for the third quarter,

Michael McCleary: And comparable net merchandise sales increased 8.6% or 10.1% in constant currency. Our Caribbean region contributed approximately 240 basis points of positive impact to the growth in total consolidated comparable net merchandise sales from the third quarter. In Colombia, where we had 10 clubs open at the end of our third quarter, net merchandise sales increased 10.1% or 19.3% in constant currency, and comparable net merchandise sales increased 9.9% or 19.1% in constant currency. Columbia contributed approximately 110 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 3rd quarter sales to the same period in the prior year, our foods category grew approximately 7.8%, our non-foods category increased approximately 9%, our food services and bakery categories increased approximately 6.7%, and our health services including optical, audiology, and pharmacy increased approximately 13.9%.

Michael McCleary: In the Caribbean where we had 14 clubs at quarter in net, merchandise sales, increased 8.2% or 9.7% in constant currency and comparable number to my sales increased 8.6% or 10.1% in constant currency.

Michael McCleary: Our Caribbean region contributed approximately 240 basis, points of positive impact, to the growth in total Consolidated comparable, networks night sales for the third quarter.

In Columbia where we had 10 clubs open, at the end of our third quarter, net merchandise, sales increased, 10.1%, or 19.3% in constant currency.

Michael McCleary: And comparable numbers in those sales, increased 9.9% or 19.1% in constant currency.

Michael McCleary: Columbia contributed approximately 110 basis, points of positive impact to the growth. In total Consolidated comparable that merchandise sales for the quarter.

Michael McCleary: In terms of merchandise categories, when comparing our third quarter sales to the same period in the prior year, our Foods category grew approximately 7.8%, our non-foods category increased approximately, 9% our food services. And bakery categories, increased approximately 6.7% and our health services including Optical Audiology and Pharmacy, increased approximately 13.9%.

Michael McCleary: Membership accounts grew 5.1% versus the prior year to almost 2 million accounts, with a 12-month renewal rate of 88% as of May 31, 2025. A key driver of our membership strategy is the Platinum Membership, which is designed to offer even more value to our most engaged members. Item members enjoy exclusive benefits, including an annual cash back reward on eligible purchases, which directly translates to savings that reward loyalty and increased purchasing power. Platinum accounts, as of May 31st, 2025, represented 16.1% of our total membership base, an increase from 11% in the prior year third quarter and 12.3% as of August 31st, 2024.

membership accounts grew 5.1% versus the prior year to almost 2 million accounts with a 12-month manual rate of 88% as of May, 31st 2025

Michael McCleary: A key driver of our membership strategy is the platinum membership which is designed to offer even more value to our most engaged members.

Michael McCleary: Item members enjoy exclusive benefits including an annual cashback reward on eligible purchases, which directly translates to savings that reward loyalty and increase purchasing power.

Michael McCleary: This increase is due to additional focus on growing this important segment of our membership, which included platinum promotional campaigns during fiscal years 2024 and 2025. Total gross margin for the quarter as a percentage of net merchandise sales increased 20 basis points to 15.8% and $17.5 million or approximately 9.4% versus the same prior year period. Total revenue margins increased 30 basis points to 17.4% of total revenue when compared to the same period last year. During the third quarter, our average sales ticket grew by 1.9% and transactions grew 6% versus the same prior year period. The average price per item remained relatively flat year over year, while average items per basket increased approximately 1.8% compared to the same period of the prior year.

Michael McCleary: Platinum accounts as of May, 31st 2025 represented 16.1% of our total membership base an increase from 11% in the prior year. Third quarter and 12.3% as of August 31st 2024

Michael McCleary: this increase is due to additional focus on growing this important signal of our membership, which included Platinum, promotional campaigns during fiscal years, 2024 and 25,

Michael McCleary: So low gross margin for the quarter as a percentage of net merchandise sales, increased 20 basis points to 15.8% and 17.5 million or approximately 9.4% versus the same prior year period.

Michael McCleary: Total revenue margins increased 30 basis points, to 17.4% of total revenue when compared to the same period last year.

Michael McCleary: During the third quarter, our average sales ticket, grew by 1.9% and transactions, grew 6% versus the same priority period.

The average price per item remained relatively flat year-over-year. While average items per basket increased approximately 1.8% compared to the same period of the prior year.

Michael McCleary: Total SG&A expenses increased to 13.2% of total revenues for the third quarter of fiscal year 2025 compared to 13% for the third quarter of fiscal year 2024. and increased 12.8% versus 12.6% for the nine-month period ended in May. The 20 basis point increase of SG&A as a percentage of revenue primarily related to planned technology investments to support the future growth of our business. Operating income for the third quarter of fiscal year 2025 increased 12.7% from the same period last year to $56.2 million. Operating income for the first nine months of fiscal year 2025 increased 4.7% from the same period last year to $179.89.

12 Spa expenses increased to 13.2% of total revenues for the third quarter of fiscal year 2025 compared to 13% for the third quarter of fiscal year 2024.

And increased 12.8% versus 12.6% for the 9-month period ended in May.

Michael McCleary: The 20 basis point increase of sgna as a percentage of Revenue, primarily related to planned technology Investments to support the future growth of our business.

Michael McCleary: Operating income for the third quarter of fiscal year 2025 increased 12.7% from the same period last year to 5 6. 2.

Operating income for the first 9 months of fiscal year 2025 increased 4.7% from the same period last year to 179.8 million.

Michael McCleary: In the third quarter of fiscal year 2025, we recorded a $7.2 million net loss in total other expense converted to a $2.9 million net loss in total other expense in the same period last year. This increase is primarily driven by an increase in unrealized losses in value of U.S. dollar-denominated monetary assets and liabilities in several of our markets. This increase was also driven by an increase in our cost of premiums to convert local currency into U.S. dollars from $3.8 million in the prior year to $4.8 million in the current Our effective tax rate for the third quarter of fiscal year 2025 came in at 28.4% versus 30.8% a year ago.

Michael McCleary: This increase is primarily driven by an increase in unrealized losses, in value of US dollar denominated monetary assets and liabilities in several of our markets.

This increase was also driven by an increase in our cost of premiums to convert local currency in the US dollars from 3.8 million in the prior year to 4.8 million in the current year.

Michael McCleary: Our effective tax rate for the first nine months of fiscal year 2025 was 27.3% compared to 31.3% for the prior year period. A decrease in the effective tax rate is primarily related to our implementation of certain tax optimization initiatives at the end of fiscal year 2024. On a go-forward basis, we estimate our annualized effective tax rate will be approximately 27 to 29 percent. Net income for the third quarter of fiscal year 2025 was $35.2 million, or $1.14 for diluted share, compared to $32.5 million, or $1.08 for diluted share, in the third quarter of fiscal year 2024.

Michael McCleary: Our effective tax rate for the third quarter of fiscal year 2025 came in at 28.4% versus 30.8% a year ago.

Michael McCleary: Our effective tax rate for the first 9 months of fiscal year 2025 was 27.3% compared to 31.3% for the prior year period.

The decrease in the effective tax rate is primarily related to our implementation of certain tax optimization initiatives at the end of fiscal year 2024,

Michael McCleary: On a go forward basis, we estimate our annualized effective, tax rate will be approximately 27 to 29%.

Michael McCleary: Net income for the third quarter of fiscal year 2025 was 35.2 million or a dollar for team for diluted share.

Michael McCleary: compared to the 32.988% of fiscal year 2024,

Michael McCleary: The adjusted EBITDA for the third quarter of fiscal year 2025 was $79 million compared to $71 million in the same period last year. Net income for the first nine months of fiscal year 2025 was $116.3 million, or $3.80 per diluted share, compared to $109.8 million, or $3.62 per diluted share in the comparable prior year period. Adjusted EBITDA for the first nine months of fiscal year 2045 was $245.1 million compared to $232.9 million in the same period last year.

Michael McCleary: Adjusted to beat that for the third quarter of fiscal year 2025 was 79 million compared to 71 million in the same period last year.

Michael McCleary: Net income for the first 9 months of fiscal year 2025 was 116.3 million or 3.80 cents per diluted share, compared to 1 0 9. 8 3,

Adjusted to beat dock for the first 9 months of a fiscal year 2025 was 245.1 Million compared to 232.9% period last year.

Michael McCleary: Moving on to our Strong Balance Sheet, we ended the quarter with cash, cash recoupments, and restricted cash totaling $183.1 million, plus approximately $94 million of short-term investment. When reviewing our cash balances, it is important to note that as of May 31, 2025, we had $75.9 million of cash, cash recoupments, and short-term investments denominated in local currency in Trinidad and Honduras, which we could not readily convert into U.S. dollars. This is a decrease from the $77.3 million at the end of the second quarter of fiscal year 2025, driven by our ability to reduce our position in Honduran limpiras during the third quarter.

Michael McCleary: Moving on to our strong balance sheet, we ended the quarter with cash cash equivalents and restricted, cash totaling 183.1 million plus approximately 94 million of short-term Investments.

When reviewing our cash balances, it is important to note that as of May, 31st 2025, we had 785.9 million of cash cash equivalents and short-term investments denominated in local currency in Trinidad and Elders, which we could not readily convert into US dollars.

Michael McCleary: While we have seen improvement in availability in Honduras of U.S. dollars during fiscal year 2025, we continue to monitor the situation actively as the underlying limitations on availability of U.S. dollars persist. From a cash flow perspective, net cash provided by operating activities increased $13.4 million for the first nine months of fiscal year 2025, largely due to improved operating results. Net cash used in investing activities decreased by $53.6 million for the first nine months of fiscal year 2025 compared to the prior year, primarily due to a $40.3 million decrease in property and equipment expenditures and a $14 million increase.

Michael McCleary: This is a decrease from the 77.3 million at the end of the second quarter of fiscal year 2025 driven by our ability to reduce our position in Honduras during the third quarter.

While we have seen Improvement in availability and Honduras of US Dollars during fiscal year 2025 we continue to monitor the situation actively as the underlying limitations on availability of US Dollars. Persist

Michael McCleary: From a cash flow perspective, net cash provided by operating activities increased 13.4 million for the first 9 months of fiscal year. 20125 largely due to improved operating results.

Michael McCleary: in proceeds from settlements and purchases of short-term investments compared to the same nine-month period a year ago.

Michael McCleary: Net cash used in investing activities, decreased by 53.6 million for the first 9 months of fiscal year 2025 compared to the prior primarily due to a 40.00% property and Equipment expenditures and a 14 million increase.

Michael McCleary: In proceeds from settlements and purchases of short-term Investments compared to the same 9-month period, a year ago.

Michael McCleary: Net cash used in financing activities during the first nine months of fiscal year 2025 decreased by $82.4 million, primarily the result of fewer repurchases or a common stock partially offset by an increase in repayments of and a decrease in proceeds from long-term bank borrowings compared to the same period a year ago.

Net cash used in financing activities during the first 9 months of fiscal year 2025 decreased by 82.4 million. Primarily the result of fewer repurchases or a common stock partially offset by an increase in repayments of and a decrease. In proceeds from long-term Bank, borrowings compared to the same period a year ago.

Michael McCleary: Looking forward a little into our current fourth quarter, our comparable net merchandise sales for the four weeks into June 29, 2025 were up 7.7% in both U.S. dollars and constant currency.

Michael McCleary: Looking forward a little into our current fourth quarter.

Our comparable, net merchandise sales, for the 4 weeks into June 29th, 2025 were up 7.7% in both US Dollars and constant currency.

Michael McCleary: In closing, we are excited to be able to share these pivotal investments that we have made in our continued commitment to operational efficiency and accessibility. We believe these changes will continue to enhance the member experience, creating a mutually beneficial relationship built on trust, value, and innovation.

Michael McCleary: In closing, we are excited to be able to share these pivotal Investments that we have made in our continued commitment to operational, efficiency and excellence.

Michael McCleary: Thank you for joining our call today. Before turning the call over for questions, we would like to request that due to the CEO and CFO transition process, and that due to travel schedules, we were not able to all be in the same location today.

We believe these changes will continue to enhance the member experience creating a mutually beneficial relationship built on, trust value and innovation.

Michael McCleary: Thank you for joining our call today.

Michael McCleary: We would like to request that you direct your questions on today's call to Robert or myself.

Operator: I will now turn the call over to the operator to take your questions.

Before turning the call over for questions, we would like to request that due to the CEO and CFO transition process and that due to travel schedules, we were not able to all be in the same location today. We would like to request that you direct your questions on today's call to Robert or myself.

Operator: Operator, you may now start taking our callers. Thank you.

Michael McCleary: I will now turn the call over to the operator, to take your questions, operator. You may now start taking our callers questions.

Michael McCleary: Thank you.

Operator: Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised.

ladies and gentlemen, we will

Operator: Should you wish to decline from the polling process, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys.

Hear a prompt that your hand has been raised. Should you wish to decline from the polling process? Please press the star followed by the 2 if you're using a speaker-phone, please. Lift the handset before pressing any keys.

John Braatz: Your first question comes from John Braatz. with Kansas City Capital.

1 moment, please for your first question.

John Bratz: Your first question comes from John Bratz.

Michael McCleary: John, please go ahead. Thank you, everyone. Michael, a question on your Trinidad funding plans that you discussed in the 10-Q. How has that helped solve your convertibility issue in Trinidad, and how do you see the impact on the P&L and maybe your liquidity premium that you're charging? And lastly, I guess it's a Trinidad-Jamaica type of transaction, does that generate an additional currency issue when you have the conversion between Trinidad and Jamaica?

Speaker Change: With Kansas City capital. John please go ahead.

John Bratz: Everyone.

uh Michael uh question uh, on the your Trinidad funding plans that you discussed in the, um,

John Bratz: In the uh, 10 Q.

How does how is that um, help solve solve your conversion? Is uh, convertible convertibility issue in in Trinidad and

John Bratz: and how do you see the impact on the p&l and maybe your liquidity premium uh, that you're charging and

John Bratz: Does. And and and then lastly does uh, be as your your, I guess your, uh, it's a, um, Trinidad. Jamaica type of transaction does, does that? Uh,

John Bratz: Uh, does that generate an an additional currency issue when you have the, uh, uh, conversion between Trinidad and Jamaica?

Michael McCleary: Hi, John. Great questions. Thanks.

Michael McCleary: So, so basically, there's a few, there's several different components of these transactions, right? There's a total of up to $65 million. The cleanest and simplest, if you will, is the US dollar loan for $15 million in which we repay in Trinidad dollars. So that obviously gives us a direct connection to work on our Trinidad payables. The other $50 million, as you brought up, there's a piece that's in Jamaican dollars, but it's indexed to US dollars. So there won't be any additional exposure from the Jamaican currency. It's just a matter of where the investors were that were subscribing to pieces of that transaction.

Michael McCleary: So the maximum FX exposure to this transaction would be between the Trinidad dollar and the US dollar for the $50 million, not for the $15 that we pay back in Trinidad dollars, and no additional Jamaican exposure.

Michael McCleary: As far as the purpose, I mean, it's just another tool for our toolbox here. Obviously, just like most of the rest of the countries, we're in Trinidad, about half of our merchandise is imported. So those vendors need to pay $50 million.

John Bratz: Hi John uh, great questions. Thanks. Um so uh so basically there's a few there's several different components of the of these transactions, right? There's a total of up to 65 million dollars. The the the cleanest and simplest if you will, is the is the uh US dollar loan for 15 million in which we repay in Trinidad dollars. So that obviously gives us a direct connection to work down our um, our trade payables, the other 50 million, um, as as you brought up, there's a piece that's in, Jamaican dollars, but it's um, but, uh, it's indexed to, uh, US dollars. So, there won't be any additional exposure from the Jamaican currency. It's just a matter of where the investors were that were, uh, that were subscribing to pieces of that transaction. So, um, the the Maximum FX exposure, um, to this transaction would be between the Trinidad dollar and the US dollar for the 50 million. Not for the fifth, not for the 15th that we pay back in in Trinidad dollars and no additional, um, Jamaican exposure, um, as far as

The purpose. I mean, you know, it's just another tool for our toolbox here. Um, obviously, you know, just like the most of the rest of the countries where, um, in Trinidad about half of our merchandise is is imported. So, um, those those vendors need

John Bratz: f***.

Michael McCleary: John, are you still there? Help at all? Anybody there? Can you hear me? Yeah. Okay, great. It looks like you just cut off there at the end of your question. I can't hear anybody. Okay, let me just see what's going on here one moment, sorry. Looks like we got disconnected with John.

Are you still there?

John Bratz: Hello.

John Bratz: Anybody there?

John Bratz: Can you hear me? Yes.

John Bratz: Okay, great. Uh, it looks like you just cut off there at the end of your question.

Speaker Change: I can't hear anybody.

Speaker Change: Okay, let me just see what's going on here. 1 moment, sorry.

Hector Maya: I will move on to the next question from Hector Maya with Scotiabank. Please go ahead Thank you very much, Robert, Michael. Thank you for taking my questions.

Speaker Change: Uh, it looks like we got disconnected with John. I will move on to the next question. From ha Maya with Scotia Bank, please go ahead.

Hector Maya: I just wanted to know if you could please share with us the thinking process that went into your strategic decision to consider Chile for future openings over other markets, and also to understand how you are thinking in terms of the potential for that market to understand what was so appealing about this opportunity, and also how open you could be to considering other opportunities in the region.

Speaker Change: Watch. So appealing about this opportunity and also how open you could be to considering other other opportunities in the region.

Operator: Yes, this is Michael. So, can you please... No, we won't be sending those back yet, but I'll give you a link in the description. All right. Bye-bye.

Michael: Yes, this is Michael.

Speaker Change: So, can you please?

Operator: Hello operator, are we live? Please go ahead. Operator, are we live now? Yes to our life. Okay. Did my answer to John's question get fully answered before we cut off there? No, it looks like John got disconnected near the end of his question. Okay, so you did not hear my answer to John's question? No, we did not. Okay, we are getting some static. Let me try to... Is John still on the line?

Speaker Change: Hello Operator. Are we live?

Please go ahead.

Operator. Are we live now?

Yes you are live. Okay did did the my answer to John's question get fully uh answered before we broke before we cut off their

Speaker Change: No, it looks like uh, John got disconnected near the end of his question.

Speaker Change: Okay, um, so you did not hear. You did not hear my answer to John's question. No, we did not.

Oh okay, we are getting some static. So um let me let me try to is John still on the line.

Operator: Checking now Okay, but let's, can you have, do you want Hector to ask his question again?

Operator: So we're going to go ahead and answer Hector's question and then I'll go back to Robert's question and sorry everybody about the technical difficulties. So Hector, I'll respond here. You really had two questions, I think. One is the considerations that went into considering going, you know, our decision, or at least almost decisions, we haven't finalized everything, to enter the market in Chile. And then other markets that we might be considering. I think that was, those were your questions. Is that right? I don't know where he is now, heck... Is Hector's line still open, operator? Operator, can you confirm that you heard Robert's answer?

Speaker Change: Um, checking. Now I, okay. Let's let's, let's can you have, do you want Hector to ask his question again or okay? All right, so we're gonna go ahead and answer, uh, Hector's question and then I'll go back to. Uh, Robert's question. I'm sorry, everybody about the technical difficulties. I'm not sure.

Speaker Change: So ha, I, I'll respond to your, you really had 2 questions. I think 1 is the considerations that went into consider going, you know, our decision or at least almost decisions. We haven't finalized everything to to enter the market in Chile. And then other markets that we might be considering I think that was those were your questions.

Is, is that right?

Speaker Change: No, I don't know where he is. Now ha.

Speaker Change: The Hector's lines, still open.

Speaker Change: Okay, operator, can you confirm that? You heard Robert's, um, answer.

Operator: Hi, yes, I heard that, and I'm looking for Hector right now, just to double-check. Well, we'll just go ahead and proceed, I guess, at this point.

Speaker Change: Hi yes I heard that and I I'm looking for Hector right now just to double check. Yeah. Well we'll we'll just go ahead and proceed. I guess at this point.

Robert Price: Okay, so why don't we have Robert go ahead.

Robert Price: Okay, well, regarding the considerations that went into our you know, at least a pretty possible decision to open in Chile. We haven't really final-finaled everything, is the fact that Chile is a... has a strong middle class. The economics are good, there's a good trade relation and tax relationship between the United States and Chile, and it's a very stable government. I think, you know, a lot of our countries, we are...

Speaker Change: He's not there. Okay. So why don't we have Robert go ahead and okay. Well, regarding the considerations that went into our

you know, at least, uh,

Speaker Change: Pretty possible decision to open into that. We haven't really finalized. Everything is the fact that Chile is a um,

Speaker Change: has a strong middle class. Um,

Robert Price: Challenging in terms of Some of the political and economic issues that we face in our countries, Chile is, we believe, would be a much more stable and more developed country, so we think it would be a positive. and also that the market in Chile, we think we could do well because of the strong middle class.

The economics are good. There's a good trade relation and tax relationship between the United States and Chile and uh, very stable government. I think, you know, a lot of our countries we are are challenging in terms of um, some of the uh, political and economic issues that we face in our countries. Chile is a, we, we believe would be a much more, uh, stable and for, uh, developed countries. So we think it would be a positive.

Robert Price: As far as other markets in Latin America, at the moment, we aren't doing any serious study of any other markets, but we would continue to assess opportunities that might come up, but nothing to report really on.

Uh market and also the the market in Chile. We think uh we could do well because of the strong middle class as far as other markets in Latin America. At the moment we aren't doing any serious study of any other markets but we would continue to assess opportunities that might come up but nothing to report really on that.

Robert Price: Hey. Well, once again, I do want to apologize for those technical difficulties. The last few calls have been very smooth, sorry about that. I want to go back to John's question here. I don't think we have him on the line anymore, but let me just try to recreate that and see if I covered the pieces of John's question. John was asking about the Trinidad financing arrangements and how that affects our liquidity situation in Trinidad to the extent you haven't already heard this answer. I don't think it went through. Of the up to $65 million of financing that we've arranged that we expect to fund in Q4, $15 million of that is we will receive proceeds in U.S.

Okay. Um, well once again, do you want to apologize for those technical difficulties? Uh

Speaker Change: Last few calls have been very smooth, sorry about that. Um, I want to go back to John's question here. Um, I don't think we have them on the line anymore, but let me just try to um, recreate that and see if I covered over the pieces of John's question. John was asking about um the internet financing arrangements and how that affects our our liquidity situation in Trinidad, um,

Robert Price: dollars and we will repay in Trinidad dollars. So that gives us a clear path towards...

Robert Price: towards our converting our PriceSmart Inc., Hctor Lpez, Robert Price, PriceSmart Inc., Hctor Lpez, PriceSmart Inc., Hctor Lpez, Robert Price, PriceSmart Inc. And that was just a convenience factor for certain of the investors that are part of that deal. And then overall, the $50 million is just another tool in our toolbox. Just like the rest of our country, about 50% of our products that are sold in Trinidad is imported, which means we have U.S. dollar vendors primarily through PriceSmart Inc. that need to be paid. And so this will allow PriceSmart Trinidad to pay money out to PriceSmart Inc., who can then pay on to their vendors and give us a path to spread that conversion over several years.

Speaker Change: To the extent. You haven't already heard this answer? I think. I I don't think it went through, um, the uh, of the up to 65 million dollars of uh, financing that we've arranged that we expect to fund in Q4 um, 15 million dollars of that is uh, we will receive a proceeds in US Dollars and we will repay and turn it into dollars. So that gives us a clear path towards. Um,

Speaker Change: uh, towards converting our, um

Speaker Change: our, uh,

$39 into US dollars. The other million dollars is, is um, going to be primarily in US Dollars. Some of it is actually um, tied to Jamaican dollars. But from our perspective, the liabilities and US dollars is indexed to US dollars. So we're not introducing any uh third currency. As far as volatility. Um, to the US dollar, Jamaican dollar exchange rate. It will just be us dollar Trinidad, um, for that 15 million dollars entirely. And, uh, that was just a convenience factor for certain of the investors that are part of part of that deal. Um, and then, uh, overall, the that's just another, the 50 million is just another tool in our toolbox, um, about just like the rest of our countries about 50% of our products are sold, uh,

Robert Price: The last piece of the question from John was regarding the FX accrual and how we're including a premium for our members. And that's something that we constantly evaluate to see how much that will impact our pricing. And we do consider that, and we are figuring that into our calculations for next year. We're going to do our best to make sure that that does not impact member pricing, but that's a work in process. Thank you. And sorry for that technical difficulty there. I'm not sure what happened.

Speaker Change: Um, in that are sold in Trinidad, is is important, which means we have US dollar, um, vendors, uh, primarily through price point Inc that need to be paid. And so, um, this will allow, um, price Mark. Turn it out to pay money up to Fresh money in cook and then pay on to their vendors. And, uh, give us a path to spread that conversion over several years. Uh, last piece of the question from John was regarding, um, the FX approval and how we're, um, including a premium for our members. And that's something that we constantly evaluate, um, to, to, uh, to, uh, see how much that will, um, impact. Our

Our um, our pricing and we do consider that and we are figuring that into our calculations for next year. Uh, we're going to do our best to make sure that that does not impact me member pricing. Um, but that's a work in process.

Operator: But as a reminder, if you do wish to ask a question, please press star one.

Speaker Change: Thank you and uh, sorry for that technical difficulty there. I'm not sure what happened. Um, but as a reminder, if you do wish wish to ask a question, please press star 1.

Hector Maya: Okay, it looks like we have Hector with a question from Scotiabank.

Hector Maya: Hector, please go ahead. Thank you very much. Hey, sorry. Sorry about that. I think there were some technical issues. Yeah, no problem. Thank you.

Speaker Change: Okay, it looks like we have um ha with a question from Scotia Bank, how do I please go ahead?

Speaker Change: Thank you very much. Can you please?

Hector Maya: Thanks so much, Robert, Michael, for taking my questions. I was basically asking if you could please share the thinking process that went into the strategic decision to consider Chile for future openings over other markets, and also to understand how you are thinking in terms of the potential in that market. And would it be also fair to assume that now PriceSmart would be open to considering other opportunities in the region, and how these could change the growth algorithm in terms of store openings in the future? Hector, I answered most of that already, I don't know if you...

Speaker Change: Thank thanks so much.

Decision to consider Chile for future openings, over other markets and also to understand how you are thinking in terms of the potential in that, uh, market. And could it be also fair to assume that now, Prisma would be open to considering other opportunities in the region and I mean how this could change the growth algorithm in terms of store openings in the future?

Robert Price: Got it or not, but I did answer a few minutes ago most of your questions. Regarding, I think the one thing in Chile that you mentioned now about the potential for that market I think it's, you know, the gross domestic product in Chile is about the same as it is in the United States. Columbia, about $350 billion, and the population is much smaller, so it's a much stronger middle class. And so we think, you know, although a big portion of the population is located in Santiago, we feel that we could have quite a, you know, a number of PriceSmart locations in the capital and also in some of the secondary cities.

Speaker Change: Vector. I, I answered most of that already. I don't know if you

Got it or not but I did answer a few minutes ago most of your questions. Um regarding um I think the 1 thing in Chile that you mentioned now about the potential for that market.

Speaker Change: um,

Speaker Change: I I think it's, you know, the the gross domestic product in Chile is about the same as it is in. Um,

Columbia about 350 billion dollars and, um, the population is much smaller. So the as a much stronger middle class and so we think, you know, although a big portion of the population is located, in Santiago, we feel that we could have quite a, you know, a number of low of price smart locations in the capital and also in

Robert Price: It's a market potential. You know, it's really hard to say, but we think it could be pretty good for us. So, um... There's still a work in progress as we continue to assess the mark. I understand. I'm sorry about that. I was also having issues to connect initially to the call, so maybe I missed that.

Speaker Change: Some of the secondary cities.

Speaker Change: if the market potential,

Speaker Change: You know, it's really hard to say, but we think it could be pretty good for us. So uh, it's still a work in progress as we continue to assess the markets.

I I understand. I'm sorry about that. I was also having issues to connect an issue with the call so maybe I missed that call.

Robert Price: There will be a transcript coming out shortly, so hopefully you can catch that. Thank you.

Speaker Change: They'll be a transcript coming out shortly, so hope you can. You can catch that.

Operator: So there are no further questions at this time.

Michael McCleary: I will now turn the call over to Michael McCleary for closing remarks. Please continue. Okay, once again, everybody, sorry about the technical difficulties. Hopefully, everybody was able to hear our answers clearly. I think we answered both John and Hector's questions, and thank you for your participation today.

Speaker Change: Thank you. Um so there are no further questions at this time. I will now turn the call over to Michael McCleary for closing remarks. Please continue.

Michael McCleary: Take care. Bye-bye.

Michael McCleary: Okay, once again everybody. Sorry about the technical difficulties, hopefully everybody was able to hear our answers clearly. I think we answered both John and and Hector's questions. And uh, thank you for your participation today. Take care. Bye bye.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, you may