Q4 2025 PriceSmart Inc Earnings Call
Speaker #1: Welcome to the conference.
Operator: Welcome to the conference.
David Brown: Hello?
Speaker #2: Thank you for holding. May I have the name of your conference? Thank you. And may I have your first and last name? And may I have your email address as well?
Operator: Thank you for holding. May I have the name of your conference?
David Brown: Yes. PriceSmart.
Operator: Thank you. May I have your first and last name?
David Brown: David Brown.
Operator: May I have your email address as well?
David Brown: David@aira.com.
Speaker #2: Thank you. I'll join you now.
Operator: Thank you. I'll join you now.
David Brown: Thank you.
Speaker #3: Current role, Robert and I are working closely together, and I'm deeply appreciative of the productive, positive, and collaborative relationship we have built. This year's results reflect the passion and dedication of our teams across clubs, distribution centers, and offices in 13 countries, working together to serve our members.
David Price: Current role, Robert and I are working closely together, and I'm deeply appreciative of the productive, positive, and collaborative relationship we have built. This year's results reflect the passion and dedication of our teams across clubs, distribution centers, and offices in 13 countries working together to serve our members. We saw strong momentum in membership, sales, and income driven by the commitment of our teams across digital, supply chain, merchandising, and operations. They delivered on our mission and provided the value our members expect. Since stepping into the CEO role on September 1, I've had the opportunity to visit many of our clubs, distribution centers, and offices. What I've seen firsthand makes me incredibly optimistic about the future of PriceSmart Inc. Most importantly, I continue to be inspired by the passion and dedication of our teams throughout the regions we serve.
Speaker #3: We saw strong momentum in membership, sales, and income, driven by the commitment of our teams across digital, supply chain, merchandising, and operations. They delivered on our mission and provided the value our members expect.
Speaker #3: Since stepping into the CEO role on September 1st, I've had the opportunity to visit many of our clubs, distribution centers, and offices, what I've seen firsthand makes me incredibly optimistic about the future of PriceSmart.
Speaker #3: But most importantly, I continue to be inspired by the passion and dedication of our teams throughout the regions we serve. I'm also excited to share a major milestone for the company.
David Price: I'm also excited to share a major milestone for the company. We have officially moved into our new corporate headquarters in San Diego. This move represents a meaningful step forward, providing us space designed to foster the kind of culture and ways of working that will support our people and mission for years to come. Now, let's turn to the key factors and strategic priorities we are focused on to continue driving sales and delivering greater value to our members, starting with real estate. In August 2025, we opened our seventh warehouse club in Guatemala, located in Quetzaltenango. In the third quarter of fiscal year 2025, we purchased land for our sixth warehouse club in the Dominican Republic, in La Romana, about 73 miles east of the nearest club in Santo Domingo. The club will be built on a five-acre property and is expected to open in spring 2026.
Speaker #3: We have officially moved into our new corporate headquarters in San Diego. This move represents a meaningful step forward, providing us with a space designed to foster the kind of culture and ways of working that will support our people and mission for years to come.
Speaker #3: Now, let's turn to the key factors in strategic priorities we are focused on to continue driving sales and delivering greater value to our members, starting with real estate.
Speaker #3: In August 2025, we opened our seventh warehouse club in Guatemala, located in Quetzaltenango. In the third quarter of fiscal year 2025, we purchased land for our sixth warehouse club in the Dominican Republic.
Speaker #3: In La Romana, about 73 miles east of the nearest club in Santo Domingo, the club will be built on a five-acre property and is expected to open in spring 2026.
Speaker #3: In the first quarter of fiscal year 2026, we purchased land for a third warehouse club in Jamaica. Located in Montego Bay, about 100 miles west of the nearest club in Kingston, this club will also be built on a five-acre site and is anticipated to open in summer 2026.
David Price: In the first quarter of fiscal year 2026, we purchased land for our third warehouse club in Jamaica, located in Montego Bay, about 100 miles west of the nearest club in Kingston. This club will also be built on a five-acre site and is anticipated to open in summer 2026. Additionally, we executed a land lease for our fourth warehouse club in Jamaica, located on South Camp Road, about six miles southeast from the nearest club in the capital of Kingston. The club will be built on a three-acre property and is anticipated to open in fall 2026. Once these three new clubs are open, we will operate 59 warehouse clubs in total. Before I continue, I want to take a moment to acknowledge the impact of Hurricane Melissa on our team members, their families, and our members in Jamaica, the Dominican Republic, and across the region.
Speaker #3: Additionally, we executed a land lease for our fourth warehouse club in Jamaica, located on South Camp Road, about six miles southeast from the nearest club in the capital of Kingston.
Speaker #3: The club will be built on a three-acre property and is anticipated to open in Fall 2026. Once these three new clubs are open, we will operate 59 warehouse clubs in total.
Speaker #3: Before I continue, I want to take a moment to acknowledge the impact of Hurricane Melissa on our team members, their families, and our members in Jamaica, the Dominican Republic, and across the region.
Speaker #3: Our thoughts are with everyone affected, and we remain committed to supporting recovery efforts and ensuring the safety and well-being of our people and communities.
David Price: Our thoughts are with everyone affected, and we remain committed to supporting recovery efforts and ensuring the safety and well-being of our people and communities. Our operations in Jamaica were affected by both the preparations for and the impact of the storm's landfall, resulting in the closure of our Jamaica clubs for a couple of days earlier this week. I'm deeply grateful for the dedicated efforts of our team. With those efforts, we were able to reopen our clubs on Wednesday, October 29. Going forward, our focus continues to be the safety of our employees and our members. We're advancing on our plan to enter Chile, a market we believe offers strong potential for multiple PriceSmart warehouse clubs. As part of this initiative, we've hired a Country General Manager and signed an executory agreement for a prospective club site.
Speaker #3: Our operations in Jamaica were affected by both the preparations for and the impact of the storm's landfall, resulting in the closure of our Jamaica clubs for a couple of days earlier this week.
Speaker #3: I'm deeply grateful for the dedicated efforts of our team. With those efforts, we were able to reopen our clubs on Wednesday, October 29.
Speaker #3: Going forward, our focus continues to be the safety of our employees and our members. We're advancing on a plan centered in Chile, a market we believe offers strong potential for multiple PriceSmart warehouse clubs.
Speaker #3: As part of this initiative, we've hired a country General Manager and signed an executory agreement for a prospective club site. While we haven't announced a target opening date, we're moving quickly and managing key factors that influence our opening date, such as permitting and construction.
David Price: While we haven't announced a target opening date, we're moving quickly and managing key factors that influence our opening date, such as permitting and construction. In addition to opening new clubs in existing markets and Chile, we're continuing to optimize our current footprint. Increasing club size, improving efficiency, and expanding parking spaces at high-volume locations remain some of the most effective ways to drive sales and enhance the member experience. To support this strategy, we'll begin expansions and remodels at select clubs and parking lots across our markets in fiscal year 2026. Now moving to our supply chain transformation strategy. One of the key drivers in keeping prices low is improving how we move and distribute merchandise to our clubs. Today, we operate major distribution centers in Miami, Costa Rica, and Panama.
Speaker #3: In addition to opening new clubs in existing markets and Chile, we're continuing to optimize our current footprint. Increasing club size, improving efficiency, and expanding parking spaces at high-volume locations remain some of the most effective ways to drive sales and enhance the member experience.
Speaker #3: To support this strategy, we'll begin expansions and remodels at select clubs and parking lots across our markets in fiscal year 2026. Now moving to our supply chain transformation strategy.
Speaker #3: One of the key drivers in keeping prices low is improving how we move and distribute merchandise to our clubs. Today, we operate major distribution centers in Miami, Costa Rica, and Panama.
Speaker #3: In the first quarter of fiscal year 2026, we adapted our Panama facility to handle cold merchandise and began operations at a new dry distribution center in Guatemala.
David Price: In the first quarter of fiscal year 2026, we adapted our Panama facility to handle cold merchandise and began operations at a new dry distribution center in Guatemala. Looking ahead, we plan to open PriceSmart run distribution centers in Trinidad and the Dominican Republic during fiscal year 2026. These local facilities are expected to improve product availability, reduce lead times, and lower landed costs, among other efficiencies. Alongside these new distribution centers, we've begun implementing third-party distribution centers in China to consolidate merchandise sourced in the country, driving greater efficiencies and lowering costs. We're also exploring additional ways to enhance logistics in multi-club markets by leveraging a mix of PriceSmart-managed and third-party operations. Finally, in select countries, we've introduced our own fleet of trucks to deliver merchandise directly to the clubs and capitalize on backhaul opportunities.
Speaker #3: Looking ahead, we plan to open PriceSmart Run distribution centers in Trinidad and the Dominican Republic during fiscal year 2026. These local facilities are expected to improve product availability, reduce lead times, and lower landed costs, among other benefits.
Speaker #3: Alongside these new distribution centers, we've begun implementing third-party distribution centers in China to consolidate merchandise sourced in the country, driving greater efficiencies and lowering costs.
Speaker #3: We're also exploring additional ways to enhance logistics and multi-club markets by leveraging a mix of PriceSmart-managed and third-party operations. Finally, in select countries, we've introduced our own fleet of trucks to deliver merchandise directly to the clubs and capitalize on backhaul opportunities.
Speaker #3: In fiscal year 2025, we made significant progress migrating to our new forecasting and replenishment system, the Relics platform. While we didn't complete implementation as originally anticipated, we remain on track and expect to finalize the migration in fiscal year 2026.
David Price: In fiscal year 2025, we made significant progress migrating to our new forecasting and replenishment system, the RELIX platform. While we didn't complete implementation as originally anticipated, we remain on track and expect to finalize the migration in fiscal year 2026. This upgrade is a critical part of our supply chain strategy and is expected to boost productivity, improve inventory management, and increase in-stock availability, ultimately driving sales growth and operational efficiency. Turning now to other ways we're enhancing membership. Our private label brand, Member Selection, is a cornerstone of our strategy and a key differentiator in our product mix. These products are crafted to deliver high quality at competitive prices, offering our members exceptional value without compromise. During fiscal year 2025, private label sales represented 28.1% of total merchandise sales, up 50 basis points from 27.6% in the comparable period of fiscal year 2024.
Speaker #3: This upgrade is a critical part of our supply chain strategy and is expected to boost productivity, improve inventory management, and increase stock availability, ultimately driving sales growth and operational efficiency.
Speaker #3: Turning now to other ways we're enhancing membership. Our private label brand members' selection is a cornerstone of our strategy and a key differentiator in our product mix.
Speaker #3: These products are crafted to deliver high quality at competitive prices, offering our members exceptional value without compromise. During fiscal year 2025, private label sales represented 28.1% of total merchandise sales.
Speaker #3: Up 50 basis points from 27.6% in the comparable period of fiscal year 2024. Some of the top-selling private label items this year included shredded mozzarella cheese, hypoallergenic baby wipes, and cold-extracted extra virgin olive oil.
David Price: Some of the top-selling private label items this year included shredded mozzarella cheese, hypoallergenic baby wipes, and cold-extracted extra virgin olive oil. In Central America, we've renewed and enhanced our co-branded consumer credit card with Banco Creditomatic at BAC, which launched in July 2025. This new agreement offers higher cashback rewards on purchases at PriceSmart, PriceSmart.com, on BAC's travel program, and other retailers and services, adding even more value for our members in that region. We continue to invest in omnichannel capabilities to meet our members where they are. Digital channel sales reached $306.7 million in fiscal year 2025, up 21.6% year-over-year, and represented 6% of total net merchandise sales. Orders placed directly through our website or app grew 22.4%, and average transaction value increased 3.7% compared to last fiscal year. As of August 31, 2025.
Speaker #3: In Central America, we've renewed and enhanced our co-branded consumer credit card with Banco Credomatic Bank, which launched in July 2025. This new agreement offers higher cashback rewards on purchases at PriceSmart and PriceSmart.com.
Speaker #3: On BAC's travel program and other retailers and services, we are adding even more value for our members in that region. We continue to invest in omnichannel capabilities to meet our members where they are.
Speaker #3: Digital channel sales reached $306.7 million in fiscal year 2025, up 21.6% year over year, and represented 6% of total net merchandise sales. Orders placed directly through our website or app grew 22.4%, and average transaction value increased 3.7% compared to last fiscal year.
Speaker #3: As of August 31, 2025, approximately 60.1% of our members had created an online profile, and 32.4% of our membership base has made a purchase on PriceSmart.com or our app.
David Price: Approximately 60.1% of our members have created an online profile, and 32.4% of our membership base has made a purchase on PriceSmart.com or our app. We see continued opportunity in this space, and we will keep investing to enhance the digital experience we offer our members. For example, in fiscal year 2026, we will begin migrating our mobile application to fully native iOS and Android architecture to enhance speed, reliability, and accessibility for our members. This foundation will allow faster deployment of new features and help us deliver an outstanding member experience in our digital channels. In the first quarter of fiscal year 2026, we expect to complete implementation of our new point-of-sale system, ALERA, a Toshiba product, in all English-speaking Caribbean markets. Later in fiscal year 2026, we'll begin rolling out this system in our Spanish-speaking markets.
Speaker #3: We see continued opportunity in this space, and we will keep investing to enhance the digital experience we offer our members. For example, in fiscal year 2026, we will begin migrating our mobile application to fully native iOS and Android architecture to enhance speed, reliability, and accessibility for our members.
Speaker #3: This foundation will allow for faster deployment of new features and help us deliver an outstanding member experience in our digital channels. In the first quarter of fiscal year 2026, we expect to complete the implementation of our new point of sale system, Elera, a Toshiba product, in all English-speaking Caribbean markets.
Speaker #3: Later in fiscal year 2026, we'll begin rolling out this system in our Spanish-speaking markets. Elera will help us achieve faster checkout times, improve productivity, and expand payment options, among other benefits.
David Price: ALERA will help us achieve faster checkout times, improve productivity, and expand payment options, among other benefits. Also, in the first quarter of this fiscal year 2026, we began implementing Workday's human capital management system to replace legacy HR applications. This upgrade is designed to enhance the employee experience with modern, user-friendly tools while improving processes, strengthening compliance, and providing scalable, integrated data to support our future growth. Now, I'd like to highlight some of our sales results, starting with a strong fourth quarter. Net merchandise sales and total revenue were both over $1.3 billion in the fourth quarter. Net merchandise sales increased by 9.2%, or 9.1% in constant currency. Comparable net merchandise sales in U.S. dollars and constant currency both increased by 7.5%. For the fiscal year ended August 31, 2025, total net merchandise sales reached almost $5.2 billion, and total revenues were almost $5.3 billion.
Speaker #3: Also, in the first quarter of this fiscal year 2026, we began implementing Workday's Human Capital Management system to replace legacy HR applications. This upgrade is designed to enhance the employee experience with modern, user-friendly tools, while improving processes, strengthening compliance, and providing scalable, integrated data to support our future growth.
Speaker #3: Now I'd like to highlight some of our sales results, starting with a strong fourth quarter. Net merchandise sales and total revenue were both over $1.3 billion in the fourth quarter.
Speaker #3: Net merchandise sales increased by 9.2%, or 9.1% in constant currency. Comparable net merchandise sales in U.S. dollars in constant currency both increased by 7.5%.
Speaker #3: For the fiscal year ended August 31, 2025, total net merchandise sales reached almost $5.2 billion, and total revenues were almost $5.3 billion.
Speaker #3: Net merchandise sales increased by 7.7% or 8.5% in constant currency. Comparable net merchandise sales increased by 6.7% or 7.5% in constant currency for the 12-month and 52-week periods, respectively.
David Price: Net merchandise sales increased by 7.7%, or 8.5% in constant currency. Comparable net merchandise sales increased by 6.7%, or 7.5% in constant currency for the 12-month and 52-week periods, respectively. During the quarter, our average sales ticket grew by 0.5%, and transactions grew 8.7% versus the same prior year period. For the 12-month period, our average ticket grew by 1.7%, and transactions grew by 5.9% versus the prior year. The average price per item remained relatively flat year-over-year, while average items per basket increased approximately 1.7% compared to the prior year. Now looking at our business by segment. First, in Central America, where we had 32 clubs at quarter end, net merchandise sales for the fourth quarter increased 8.9%, or 8% in constant currency, with a 6% increase in comparable net merchandise sales, or 5.3% in constant currency.
Speaker #3: During the quarter, our average sales ticket grew by half a percent, and transactions grew by 8.7% versus the same prior year period. For the 12-month period, our average ticket grew by 1.7% and transactions grew by 5.9% versus the prior year.
Speaker #3: The average price per item remained relatively flat year over year, while average items per basket increased approximately 1.7% compared to the prior year. Now looking at our business by segment.
Speaker #3: First, in Central America, where we had 32 clubs at quarter end, net merchandise sales for the fourth quarter increased 8.9%, or 8% in constant currency.
Speaker #3: We experienced a 6% increase in comparable net merchandise sales, or 5.3% in constant currency. Additionally, we opened our ninth warehouse club in Costa Rica in April 2025, and our seventh warehouse club in Guatemala.
David Price: Additionally, we opened our ninth warehouse club in Costa Rica in April 2025 and our seventh warehouse club in Guatemala in August 2025, resulting in our high single-digit net merchandise sales growth. Although lower than net merchandise sales, all our markets in Central America had positive comparable net merchandise sales growth, validating the strong demand we're seeing in the region. Our Central America segment contributed approximately 360 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter. Second, in the Caribbean, where we had 14 clubs at quarter end, net merchandise sales for the fourth quarter increased 6.3%, or 7.5% in constant currency, and comparable net merchandise sales increased 6.5%, or 7.8% in constant currency. All of our markets in this segment had positive comparable net merchandise sales growth.
Speaker #3: In August 2025, we achieved high single-digit net merchandise sales growth. Although this growth was lower than our net merchandise sales in all markets, Central America had positive comparable net merchandise sales growth, validating the strong demand we're seeing in the region.
Speaker #3: Our Central America segment contributed approximately 360 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter.
Speaker #3: Second, in the Caribbean, where we had 14 clubs at quarter end, net merchandise sales for the fourth quarter increased 6.3%, or 7.5% in constant currency.
Speaker #3: Comparable net merchandise sales increased by 6.5% or 7.8% in constant currency. All of our markets in this segment had positive comparable net merchandise sales growth.
Speaker #3: Our Caribbean region contributed approximately 180 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter. Lastly, in Colombia, where we had 10 clubs open at the end of our fourth quarter, net merchandise sales for the fourth quarter increased 18.2% or 18.7% in constant currency.
David Price: Our Caribbean region contributed approximately 180 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter. Last, in Colombia, where we had 10 clubs open at the end of our fourth quarter, net merchandise sales for the fourth quarter increased 18.2%, or 18.7% in constant currency, and comparable net merchandise sales increased 18.3%, or 18.8% in constant currency. Colombia contributed approximately 210 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 fourth quarter sales for the same period in the prior year, our foods category grew approximately 7.6%. Our non-foods category increased approximately 7.9%, and our foods, services, and bakery category increased approximately 7.5%. Our health services, including optical, audiology, and pharmacy, increased approximately 17%. Membership accounts grew 6.2% year-over-year to over 2 million.
Speaker #3: Comparable net merchandise sales increased 18.3%, or 18.8% in constant currency. Colombia contributed approximately 210 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter.
Speaker #3: In terms of merchandise categories, when comparing our fourth quarter sales to the same period in the prior year, our Foods category grew approximately 7.6%.
Speaker #3: Our non-foods category increased approximately 7.9%, and our foods, services, and bakery category increased approximately 7.5%. Our health services, including optical, audiology, and pharmacy, increased approximately 17%.
Speaker #3: Membership accounts grew 6.2% year over year to over 2 million. Platinum membership represented 17.9% of our total base as of August 31, 2025. That's up from 12.3% at the end of the prior year.
David Price: Platinum memberships represented 17.9% of our total base as of August 31, 2025. That's up from 12.3% at the end of the prior year. This growth reflects our increased focus on the segment through targeted platinum promotional campaigns. Fourth quarter membership income reached $22.6 million, a 14.9% increase over the same period last year, driven by higher platinum penetration and a $5 annual fee increase for all membership types implemented gradually across fiscal year 2024 in all but one market. We continued with a strong 12-month renewal rate of 88.8% for fiscal year 2025. With that, I'll turn it over to Gualberto to continue the financial review. Thank you, David. Continuing with the income statement, total gross margin as a percentage of net merchandise sales for the fourth quarter of fiscal year 2025 remained unchanged at 15.7% when compared to the fourth quarter of fiscal year 2024.
Speaker #3: This growth reflects our increased focus on the segment through targeted platinum promotional campaigns. Fourth quarter membership income reached $22.6 million, a 14.9% increase over the same period last year.
Speaker #3: Driven by higher platinum penetration and a $5 annual fee increase for all membership types, implemented gradually across fiscal year 2024 in all but one market.
Speaker #3: We continued with a strong 12-month renewal rate of 88.8% for fiscal year 2025. With that, I'll turn it over to Gualberto to continue the financial review.
Speaker #2: Thank you, David. Continuing with the income statement, total gross margin as a percentage of net merchandise sales for the fourth quarter of fiscal year 2025 remained unchanged at 15.7%.
Speaker #2: When compared to the fourth quarter of fiscal year 2024, total gross margin increased by $16.9 million, or approximately 9%, versus the same quarter of the prior fiscal year.
David Price: In dollars, total gross margin increased by $16.9 million, or approximately 9%, versus the same quarter of the prior fiscal year. Total revenue margins for the fourth quarter increased 10 basis points to 17.4% of total revenue when compared to the same period last year. The 10 basis point increase is primarily driven by the strong membership results that David mentioned before. Moving to SG&A, total SG&A expenses increased to 13.5% of total revenues for the fourth quarter of fiscal year 2025, compared to 13.3% for the fourth quarter of fiscal year 2024. For the full fiscal year 2025, total SG&A expenses increased to 12.9% of total revenues, compared to 12.7% of total revenues for fiscal year 2024. The increase in both periods is primarily due to investments in technology.
Speaker #2: Total revenue margins for the fourth quarter increased 10 basis points to 17.4% of total revenue when compared to the same period last year. The 10 basis point increase is primarily driven by the strong membership results that David mentioned before.
Speaker #2: Moving to SG&A, total SG&A expenses increased to 13.5% of total revenues for the fourth quarter of fiscal year 2025, compared to 13.3% for the fourth quarter of fiscal year 2024.
Speaker #2: For the full fiscal year 2025, total SG&A expenses increased to 12.9% of total revenues, compared to 12.7% of total revenues for fiscal year 2024.
Speaker #2: The increase in both periods is primarily due to investments in technology. The company incurred costs of approximately $600,000 in the fourth quarter and $3.7 million in the fiscal year related to growth and technology projects.
David Price: The company incurred costs of approximately $600,000 in the fourth quarter and $3.7 million in the fiscal year related to growth and technology projects, such as the implementation of the RELIX and ALERA systems. Additionally, we had approximately $700,000 in the fourth quarter and $1.6 million in the fiscal year of one-time expenses associated with CFO transition costs, as well as approximately $600,000 in the fourth quarter and $1.1 million in the fiscal year related to the relocation of the San Diego corporate office. For fiscal year 2026, G&A expenses will be impacted by the compensation of our Chief Executive Officer, as our interim Chief Executive Officer in fiscal year 2025 declined to receive compensation for his services during his term. Operating income in the quarter increased 7.2% versus prior year to $52.8 million. Operating income for the fiscal year increased 5.2% versus prior year to $232.5 million.
Speaker #2: Such as the implementation of the RELEX and ELERA systems. Additionally, we had approximately $700,000 in the fourth quarter, and $1.6 million in the fiscal year, of one-time expenses associated with CFO transition costs, as well as approximately $600,000 in the fourth quarter, and $1.1 million in the fiscal year, related to the relocation of the San Diego corporate office.
Speaker #2: For fiscal year 2026, G&E expenses will be impacted by the compensation of our Chief Executive Officer, as our Interim Chief Executive Officer in fiscal year 2025 declined to receive compensation for his services during his term.
Speaker #2: Operating income in the quarter increased 7.2% versus the prior year to $52.8 million. Operating income for the fiscal year increased 5.2% versus the prior year to $232.5 million.
Speaker #2: In other expenses in the fourth quarter, we recorded a loss of $6.4 million. This is better than the fourth quarter of fiscal year 2024 by $1 million.
David Price: In other expenses in the fourth quarter, we recorded a loss of $6.4 million. This is better than the fourth quarter of fiscal year 2024 by $1 million, primarily driven by a decrease in foreign currency conversion transaction costs. Our effective tax rate for the fourth quarter of fiscal year 2025 came in at 32% versus 30.4% a year ago, as we fell into a minimum tax position in some of our markets to close the year. Tax planning is central to us, as it's a significant expense. It's also complicated, as we operate in many jurisdictions, making it particularly complex to estimate quarter by quarter, as the tax provision is projected and calculated on an annual basis.
Speaker #2: Primarily driven by a decrease in foreign currency conversion transaction costs. Our effective tax rate for the fourth quarter of fiscal year 2025 came in at 32%.
Speaker #2: Versus 30.4% a year ago, as we fell into a minimum tax position in some of our markets to close the year. Tax planning is central to us, as it's a significant expense.
Speaker #2: It's also complicated, as we operate in many jurisdictions, making it particularly complex to estimate quarter by quarter, as the tax provision is projected and calculated on an annual basis.
Speaker #2: Despite the increase in the rate in the fourth quarter, it's important to note that for the full fiscal year 2025, the effective tax rate was 28.4%, down from 31.1% for the prior year period.
David Price: Despite the increase in the rate in the fourth quarter, it's important to note that for the full fiscal year 2025, the effective tax rate was 28.4%, down from 31.1% for the prior year period. This shows the result of our continued efforts in the area. Net income for the fourth quarter of fiscal year 2025 was $31.5 million, or $1.02 per diluted share, compared to $29.1 million, or $0.94 per diluted share in the fourth quarter of fiscal year 2024. For the full fiscal year 2025, net income was $147.9 million, or $4.82 per diluted share, compared to $138.9 million, or $4.57 per diluted share in the comparable prior year period. Adjusted EBITDA for the fourth quarter of fiscal year 2025 was $75.5 million, compared to $70.7 million in the same period last year.
Speaker #2: This shows the result of our continued efforts in the area. Net income for the fourth quarter of fiscal year 2025 was $31.5 million, or $1.02 per diluted share.
Speaker #2: Compared to $29.1 million, or 94 cents per diluted share, in the fourth quarter of fiscal year 2024. For the full fiscal year 2025, net income was $147.9 million, or $4.82 per diluted share, compared to $138.9 million, or $4.57 per diluted share in the comparable prior year period.
Speaker #2: Adjusted EBITDA for the fourth quarter of fiscal year 2025 was $75.5 million, compared to $70.7 million in the same period last year. Adjusted EBITDA for fiscal year 2025 was $320.7 million, compared to $303.6 million in the same period last year.
David Price: Adjusted EBITDA for fiscal year 2025 was $320.7 million, compared to $303.6 million in the same period last year. Moving on to our balance sheet and cash flow, we ended the quarter with cash, cash equivalents, and restricted cash totaling $285.3 million, in addition to approximately $73.2 million of short-term investments. From a cash flow perspective, net cash provided by operating activities reached $261.3 million in the fiscal year, an increase of $53.7 million versus prior year. Changes in our merchandise inventory and accounts payable positions contributed $17.7 million to the overall increase. The primary cause of this was a lower year-over-year increase in inventory compared to prior year due to one less club that opened in fiscal year 2025 versus the three clubs that we opened in fiscal year 2024, and due to the timing of holiday seasonal buildup.
Speaker #2: Moving on to our balance sheet and cash flow, we ended the quarter with cash, cash equivalents, and restricted cash totaling $285.3 million, in addition to approximately $73.2 million of short-term investments.
Speaker #2: From a cash flow perspective, net cash provided by operating activities reached $261.3 million in the fiscal year, an increase of $53.7 million versus the prior year.
Speaker #2: Changes in our merchandise inventory and accounts payable positions contributed $17.7 million to the overall increase. The primary cause of this was a lower year-over-year increase in inventory compared to the prior year, due to one less club that opened in fiscal year 2025 versus three clubs that we opened in fiscal year 2024.
Speaker #2: And due to the timing of the holiday seasonal buildup, net cash used in investing activities decreased by $46.6 million for fiscal year 2025 compared to the prior year.
David Price: Net cash used in investing activities decreased by $46.6 million for fiscal year 2025 compared to the prior year, primarily due to a decrease in additions to property and equipment of $10.4 million and a net decrease in purchases, less proceeds of short-term investments of $35.4 million. Net cash provided by financing activities during fiscal year 2025 increased by $164.2 million, primarily driven by a $65.4 million net increase in long-term back borrowings, a $66.8 million decrease in repurchases of our common stock, and a $27.4 million decrease in cash dividend payments. When reviewing our cash balances, it is important to note that as of August 31, 2025, we had $59.7 million of cash, cash equivalents, and short-term investments denominated in local currency in Trinidad, which we could not readily convert into U.S. dollars. In Honduras, we're currently able to store substantially all the U.S.
Speaker #2: Primarily due to a decrease in additions to property and equipment of $10.4 million, and a net decrease in purchases less proceeds of short-term investments of $35.4 million.
Speaker #2: Net cash provided by financing activities during fiscal year 2025 increased by $164.2 million, primarily driven by a $65.4 million net increase in long-term borrowings, a $66.8 million decrease in repurchases of our common stock, and a $27.4 million decrease in cash dividend payments.
Speaker #2: When reviewing our cash balances, it is important to note that as of August 31, 2025, we had $59.7 million of cash, cash equivalents, and short-term investments denominated in local currency in Trinidad.
Speaker #2: which we could not readily convert into US dollars. In Honduras, we are currently able to source substantially all the US dollars that we need, but we faced similar US dollar liquidity challenges in the country from fiscal year 2023 to the first half of fiscal year 2025.
David Price: dollars that we need, but we faced similar U.S. dollar liquidity challenges in the country from fiscal year 2023 to the first half of fiscal year 2025. We're monitoring this closely as the central bank still has strict controls there on the availability of U.S. dollars. Looking forward a little into our current first quarter, our comparable net merchandise sales for the eight weeks ended October 26, 2025, were at 7.2% and 6.5% in constant currency. In closing, we're proud of all our accomplishments in the fourth quarter and fiscal year 2025. As we enter fiscal year 2026, we remain dedicated to our members, our people, and our communities.
Speaker #2: We are monitoring this closely, as the central bank still has strict controls on the availability of U.S. dollars. Looking forward a little into our current first quarter, our comparable net merchandise sales for the eight weeks ended October 26, 2025, were at 7.2% and 6.5% in cost and currency.
Speaker #2: In closing, we're proud of all our accomplishments in the fourth quarter (Q4) and fiscal year 2025. As we enter fiscal year 2026, we remain dedicated to our members, our people, and our communities.
Speaker #2: We're excited about the many initiatives we have underway, especially on the technological front, to make our point-of-sale supply chain and other front- and back-office processes more efficient. We are looking forward to a year of growth in fiscal year 2026.
David Price: We're excited about the many initiatives we have underway, especially on the technological front, to make our point-of-sale, supply chain, and other front and back office processes more efficient, and are looking forward to a year of growth in fiscal year 2026. Thank you for joining our call today. I will now turn the call over to the operator to take your questions. Operator, you may now start taking our callers' questions. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw that question, again, press star one. Your first question comes from Jon Braatz with Kansas City Capital. Please go ahead. Morning, everyone. David.
Speaker #2: Thank you for joining our call today. I will now turn the call over to the operator to take your questions. Operator, you may now start taking our callers' questions.
Speaker #2: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press *1 on your telephone keypad to raise your hand and join the queue.
Speaker #2: And if you would like to withdraw that question, again, press star 1. Your first question comes from John Bratz with Kansas City Capital. Please go ahead.
Speaker #3: Morning, everyone. David, in Jamaica, I take it that with the stores being open, they were undamaged during the hurricane. Is that correct?
David Price: In Jamaica, I take it that with the stores being open, that they were undamaged during the hurricane. Is that correct? David? Hello? One moment, please. Okay. How about now? Can you hear me? Yeah. Can you hear me? David? Yes. Can you? Oh, yes. Okay. Jamaica, I don't know if you heard my question. I take it your stores—I did, Jon. Okay. Let's restart. Yeah. Regarding our clubs in Jamaica, they were not damaged. We take great care in how we construct those buildings, knowing very well that we're in a hurricane area. Luckily, for those locations, the storm turned westward at the last minute, so we were spared the full brunt of the storm. We're open, and we're flowing, and the Kingston Port, we're starting to get merchandise in. Different parts of the islands had different impacts, right? It's going to take time for the country to recover.
Speaker #4: David? Hello?
Speaker #2: One moment, please.
Speaker #4: Yeah. Yeah. Yeah. Yeah.
Speaker #3: Okay. How about now?
Speaker #4: Can you hear me?
Speaker #3: Yeah.
Speaker #4: Can you hear me? Yes. Oh,
Speaker #3: David? Can you?
Speaker #4: yes.
Speaker #3: Okay. I don't know if you heard my...
Speaker #4: Jamaica.
Speaker #3: I take it your stores.
Speaker #4: I did, John.
Speaker #3: Okay. Let's restart. Yeah. So regarding our clubs in Jamaica, they were not damaged. We take great care in how we construct those buildings, knowing very well that we're in a hurricane area.
Speaker #3: And luckily, the storm turned west well; luckily for those locations, the storm turned westward kind of at the last minute. So we were kind of spared the full brunt of the storm.
Speaker #3: So we're open, and we're flowing. The Kingston port is starting to receive merchandise. However, different parts of the island have experienced varying impacts, right?
Speaker #3: And so it's going to take time for the country to recover.
Speaker #4: Okay. So, you're getting merchandise in to restock?
David Price: Okay. So you're getting merchandise in to restock? Yep. Okay. Looking at the two stores that you are going to build in Trinidad and Montego Bay and South Camp, South Camp is a smaller acreage. Is it going to be a smaller store than what is typical? That's not the intention. We're going to have to do some changes in our parking format to support the sort of parking that we require, but the intention is to have a typical-sized club there. Your next question comes from the line of Hector Maya with Scotiabank. Please go ahead. Hi, David. Hector, thank you very much for taking my questions, and congratulations to you both on your new roles. I know that you are still assessing the potential opportunities for expansion in Chile, and we saw your store opening pipeline for 2026 and 2027.
Speaker #3: Yep.
Speaker #4: Okay. Okay. Looking at the two stores that you are going to build in Trinidad and Montego Bay and South Camp, South Camp is a smaller acreage.
Speaker #4: Is it going to be a smaller store than what is typical?
Speaker #3: That's not the intention. We're going to have to make some changes in our parking format to support the sort of parking that we require.
Speaker #3: But the intention is to have a typical-sized club. There.
Speaker #2: Your next question comes from the line of Hector Maya with Scotiabank. Please go ahead.
Speaker #5: Hi, David. Well, Hector, thank you very much for taking my questions, and congratulations to you both on your new roles. I know that you are still assessing the potential opportunities for expansion in Chile.
Speaker #5: And we saw your store opening pipeline for 2026 and 2027. We wanted to know if, everything goes well in your analysis in Chile, would it be fair to assume that any first openings there might come in 2026 or 2027?
David Price: We wanted to know if everything goes well in your analysis in Chile, would it be fair to assume that any first openings there might come in 2026 or 2027, or should we assume that it might still take longer than 2027 to see something there? Maybe—sorry. That one first, and then I have a follow-up. Thank you. Thank you, Hector, for calling in today and for your question. We haven't provided any information beyond what's in the 10-K about our opening plans. We do have a site that's under executive agreement. That's good. We continue to make progress there, but we have not provided opening date information at this point. That's all I can share with you. I appreciate the question. Understand. That's perfect. Thank you very much.
Speaker #5: Or should we assume that it might still take longer than 2027 to see something there? And also, on every—sorry, well, yeah, that one first and I have a follow-up.
Speaker #5: Thank you.
Speaker #3: Okay. Well, thank you, Hector, for calling in today and for your question. We haven't provided any information beyond what's in the 10-K about our opening plans.
Speaker #3: We do have a site that's under executive agreement, and so that's good. We continue to make progress there, but we have not provided opening date information at this point.
Speaker #3: So that's all I can share with you, but I appreciate the question.
Speaker #5: Understand. That's true. Thank you very much. Also, could you please share a bit about the margins by segment, as well as the dynamics by country? Were there any methodology changes there?
David Price: Also, and maybe the margins by segment, could you please share a bit of the dynamics by country and if there were any methodology changes there? Just making sure. Yes, Hector, thank you for the question. There were no changes in the methodology. As you know, we don't disclose details on this, but I can tell you that we have not seen any material mix changes that would impact EBITDA. Your next question comes from the line of Jon Braatz with Kansas City Capital. Please go ahead. I'm back. David, as we look ahead into the next calendar year, there's going to be some changes in remittances from the U.S. back to a number of your countries. I guess my question is, there's a 1% fee. Do you think that could have an impact on the sales performance of some of your stores? Thank you, Jon, for the question.
Speaker #5: Just making sure.
Speaker #3: Yes, Hector. Thank you for the question. There were no changes in the methodology. And as you know, we don't disclose details on this. But I can tell you that we have not seen any material mix changes that would impact EBITDA.
Speaker #2: Your next question comes from the line of John Bratz with Kansas City Capital. Please go ahead.
Speaker #4: I'm back. David, as we look ahead into the next calendar year, there are going to be some changes in remittances from the U.S. back to a number of your countries.
Speaker #4: I guess my question is, there's a 1% fee. Do you think that could have an impact on the sales performance of some of your stores?
Speaker #3: Thank you, John, for the question. That's an informed question. I mean, you're right that several of our markets have significant portions of GDP represented by remittances.
David Price: That's an informed question. You're right that several of our markets have a significant portion of GDP represented by remittances, particularly Jamaica, Honduras, and El Salvador are the largest, but Guatemala is not insignificant, neither is Nicaragua. Having said that, we have no indication so far of a slowdown that's impacted consumption that we can see. Certainly, it's not out of the realm of possible that there could be an impact, but at this point, we don't have an indication that there's an impact from that flow of income for Jamaica. That concludes our question and answer session. I will now turn it back over to David for closing comments. Great. Thank you very much. I just want to thank everyone for calling in today and send another message of gratitude to our team just for everything they do.
Speaker #3: Particularly, Jamaica under El Salvador is the largest, but Guatemala is not insignificant. Neither is Nicaragua. Having said that, we have no indication so far that a slowdown has impacted consumption that we can see.
Speaker #3: Certainly, it's not out of the realm of possibility that there could be an impact. But at this point, we don't have an indication that there's an impact from that flow of income.
Speaker #2: That concludes our question and answer session. I will now turn it back over to David for closing comments.
Speaker #3: Great. Thank you very much. I just want to thank everyone for calling in today and send another message of gratitude to our team for everything they do.
Speaker #3: We wouldn't be here without all of our great employees on the ground and in our central office. So, thank you a lot, everyone. Have a good day.
David Price: We wouldn't be here without all of our great employees on the ground and in our central office. Thanks a lot, everyone. Have a good day. Have a good day. This concludes today's conference call. Thank you for your participation, and you may now disconnect.
Speaker #4: Have a good day.
On August 31, 2025 after remarks from our company Representatives, David price Chief Executive Officer.
Walbert, Joe Hernandez, Chief Financial Officer, you will be given an opportunity to ask questions as time permits as a reminder, this conference call is limited to one hour and is being recorded today Friday October 31 2025.
A digital replay will be available following the conclusion of today's conference call through November seven 2025 by dialing one 807 702030 for domestic callers or.
164736 to 9199 for international callers and by entering the replay access code 5898084.
For opening remarks, I would like to turn the call over to price Smart Chief Financial Officer, Roberto Hernandez. Please proceed sir.
Thank you operator, and welcome to plasma Inc earnings call for the fourth quarter of fiscal year 2025, which ended on August 31st 2025.
Well, we will be discussing the information that we provided in our earnings question is and I would think.
Which were both released yesterday afternoon.
2025.
Also in these remarks, we refer to non-GAAP financial measures.
You can find the reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures in the specialties on I would think.
These documents are available on our Investor Relations website at investors stock price might have a call where you can also sign up for you Matt.
As a reminder, all statements made on this conference call other than statements of historical facts are forward looking statements concerning the company's anticipated plans revenues and related matters.
Forward looking statements include but are not limited to statements containing the words expects.
Beliefs.
We've made sure.
Sure.
Estimate and similar expressions.
Forward looking statements are based on current expectations and assumptions as of today October 31st 2025.
The statements are subject to risks and uncertainties that could cause actual results to differ materially including the risks detailed in the company's report on Form 10-K filed yesterday another financed with the SEC, which are accessible on the Sec's website Www SEC Gov.
May be updated from time to time.
The company undertakes no obligation to update forward looking statements made during this call.
Now I will turn the call over to David price Basmati, Chief Executive Officer. Thank.
Thank you operator, and good morning, everyone I'd like to start by expressing my sincere gratitude to these higher price for our team.
This is the first earnings call for both Palmetto and me in our new roles and we're excited to be here with our shareholders.
We're settling in well and energized by the opportunities ahead.
I also want to thank Robert price, our executive chairman for his invaluable leadership during his multiple tenures as CEO, especially his most recent one in.
In his current role Robert and I are working closely together and I'm deeply appreciative of the productive positive and collaborative relationship we have built.
This year's results reflects the passion and dedication of our teams across clubs distribution centers and offices in 13 countries working together to serve our members.
We saw strong momentum in membership sales and income.
Driven by the commitment of our teams across digital supply chain merchandising and operations.
They delivered on our mission and provided the value our members expect.
Since stepping into the CEO role on September one.
Had the opportunity to visit many of our clubs distribution centers and offices, what I've seen firsthand makes me incredibly optimistic about the future of price environment, but most importantly, I continue to be inspired by the passion and dedication of our teams throughout the regions we serve.
I'm also excited to share a major milestone for the company. We have officially moved into our new corporate headquarters in San Diego.
This move represents a meaningful step forward, providing us space decided to foster the kind of culture and ways of working that will support our people and mission for years to come.
Now, let's turn to the key factors and strategic priorities. We are focused on to continue driving sales and delivering greater value to our members starting with real estate and.
In August 2005, we opened our seventh warehouse club in Guatemala, located in peso Conoco.
In the third quarter of fiscal year 2025, we purchased land for our sixth warehouse clubs in the Dominican Republic, and La Romana about 73 miles east of the nearest club in Santo Domingo.
The club will be built on a five acre property and is expected to open in spring 2026.
In the first quarter of fiscal year 2026, we purchased land for a third warehouse club in Jamaica located in Montego Bay about 100 miles west of the nearest club in Kingston.
This club will also be built on a five acre site and is anticipated to open in summer 2026. Additionally.
Additionally, we executed a land lease for a fourth warehouse club in Jamaica, located on South Camp Road about six miles South east from the nearest club and the capital Kingston.
It will be built on a three acre property is anticipated to open in fall 2026.
Once these three new clubs are open we will operate 59 warehouse clubs in total.
Before I continue I want to take a moment technology impact of Hurricane Melissa on our team members that families and our members in Jamaica, the Dominican Republic and across the region.
Our thoughts are with everyone affected and we remain committed to supporting recovery efforts and ensuring the safety and wellbeing of our people and communities.
Our operations in Jamaica were affected by both the preparations for and the impact of the storm's landfall, resulting in the closure of our to make the clubs for a couple of days earlier this week.
I'm deeply grateful for the dedicated efforts of our team.
And with those efforts, we were able to reopen our clubs on Wednesday October 29.
Going forward, our focus continues to be the safety of our employees and our members.
We are advancing on our planned central Chile market, we believe offer strong potential for multiple price smart warehouse clubs.
As part of this initiative, we've hired a country general manager.
And signed an executive order agreement for a prospective club site.
While we Havent announced target opening date, we're moving quickly and managing key factors that influence our opening dates such as permitting and construction.
In addition to opening new clubs in existing markets and Chile, we're continuing to optimize our current footprint, increasing club size, improving efficiency and expanding parking spaces at high volume locations remain some of the most effective ways to drive sales and enhance the member experience to.
To support this strategy will begin expansions and remodels at select clubs in parking lots across our markets in fiscal year 2026.
Now moving to our supply chain transformation strategy.
One of the key drivers and keeping prices low is improving how we move and distribute merchandise to our clubs.
Today, we operate a major distribution centers in Miami, Costa Rica and Panama.
In the first quarter of fiscal year 2026, we adapted our Panama facility to handle called merchandise and began operations at a new dry distribution center in Guatemala.
Looking ahead, we plan to open price front run distribution centers in Trinidad and the Dominican Republic during fiscal year 2026.
These local facilities are expected to improve product availability reduce lead times and lower landed cost among others.
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Alongside these new distribution centers, we've begun implementing third party distribution centers in China to consolidate merchandize source in the country driving greater efficiencies and lowering costs.
We're also exploring additional ways to enhance logistics and multi club markets by leveraging a mix price aren't managed and third party operations. Finally in select countries. We've introduced our own fleet of trucks to deliver merchandize directly to the clubs and capitalize on backhaul opportunities.
In fiscal year 2025, we made significant progress migrating to our new forecasting and replenishment system the relics platform while.
While we Didnt complete implementation as originally anticipated we remain on track and expect to finalize the migration of fiscal year 2026. This upgrade is a critical part of our supply chain strategy and is expected to boost productivity improve inventory management and increase in stock availability ultimately driving sales growth and operational efficiency.
Turning now to other ways, we're enhancing membership.
Our private label brand member's selection is a cornerstone of our strategy and a key differentiator in our product mix. These.
These products are crafted to deliver high quality at competitive prices offering our members exceptional value without compromise during.
During fiscal year 2025, private label sales represented 28, 1% of total merchandise sales up 50 basis points from 27, 6% and comparable period of fiscal year 2020 for.
Some of the top selling private label items. This year included shredded mozzarella cheese, Hypo allergenic baby wipes and cold extracted extra Virgin olive oil.
In Central America will be renewed and enhanced our co branded consumer credit card with Banco credit Madison back, which launched in July 2025.
New agreement offers higher cashback rewards on purchases of price might correct me Dot com on <unk> travel program and other retailers and services, adding even more value for our members in that region.
We continue to invest in omni channel capabilities to meet our members where they are digital channel sales reached $306 7 million in fiscal year 2025 up 21, 6% year over year and represented 6% of total net merchandise sales.
Orders placed directly through our website or App grew 22, 4% and average transaction value increased three 7% compared to last fiscal year.
As of August 31, 2025, approximately 61% of our members had created an online profile and 32, 4% of our membership base has made a purchase price of our dot com or our app we.
We see continued opportunity in this space and we will keep investing to enhance the digital experience. We offer our members for example in fiscal year 2026, we will begin migrating our mobile application to fully native iOS and Android architecture to enhance speed reliability and accessibility for our members. This foundation will allow faster deployment of <unk>.
Teachers and help us deliver an outstanding member experience and the digital channels.
In the first quarter of fiscal year 2006, we expect to complete implementation of our new point of sale system, Allegra, Toshiba product and all English speaking Caribbean markets.
Later in fiscal year 2026, we'll begin rolling out the system in our Spanish speaking markets.
Allegra will help us achieve faster checkout times improve productivity and expand payment options among other benefits.
Also in the first quarter of this fiscal year 2026, we began implementing workdays human capital management system to replace legacy HR applications.
This upgrade is designed to enhance the employee experience with modern user friendly tools, while improving processes strengthening compliance and providing scalable integrated data to support our future growth.
Now I'd like to highlight some of our sales results starting with a strong fourth quarter.
Net merchandise sales and total revenue were both over $1 3 billion in the fourth quarter.
Net merchandise sales increased by nine 2% or nine 1% in constant currency comparable net merchandise sales in us dollars and constant currency both increased by seven 5%.
For the fiscal year ended August 31, 2025, total net merchandise sales reached almost $5 2 billion and total revenues were almost $5 3 billion net.
Net merchandise sales increased by seven 7% or eight 5% in constant currency and comparable net.
Net merchandise sales increased by six 7% or seven 5% in constant currency for the 12 months and 52 week periods respectively.
During the quarter, our average sales ticket grew by 5% and transactions grew eight 7% versus the same prior year period for.
For the 12 month period, our average ticket grew by one 7% and transactions grew by five 9% versus the prior year. The average price per item remained relatively flat year over year, while average items per basket increased approximately one 7% compared to the prior year.
Now looking at our business by segment first in Central America, where we had 32 clubs at quarter end net merchandise sales for the fourth quarter increased eight 9% or 8% in constant currency with a 6% increase in comparable net merchandise sales or five 3% constant currency. Additionally, we opened our ninth.
Warehouse club in Costa Rica in April 2025, and our seventh warehouse club in Guatemala, and August 25, resulting in a high single digit net merchandise sales growth.
Although lower than net merchandise sales all our markets in Central America had positive comparable net merchandise sales growth validating the strong demand we're seeing in the region.
Our Central America segment contributed approximately 360 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter.
In the Caribbean, where we had 14 clubs at quarter end net.
<unk> sales for the fourth quarter increased six 3% or seven 5% in constant currency and comparable net merchandise sales increased six 5%.
Or seven 8% in constant currency.
All of our markets and the segment had positive comparable net merchandise sales growth of.
Our Caribbean region contributed approximately 180 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter.
Last in Colombia, where we had 10 clubs opened at the end of our fourth quarter.
Net merchandise sales for the fourth quarter increased 18, 2% or 18, 7% in constant currency and comparable net merchandise sales increased 18, 3% or 18, 8% in constant currency.
Colombia contributed approximately 210 basis points positive impact to the growth in total consolidated comparable net merchandise sales per quarter.
In terms of merchandise categories, when comparing our fourth quarter sales for the same period in the prior year. Our foods category grew approximately seven 6% our non foods categories increased approximately seven 9% and our food services bakery category increased approximately seven 5% our health services <unk>.
Leading optical audiology pharmacy increased approximately 17%.
Membership accounts grew six 2% year over year to over $2 million.
Platinum membership represented 17, 9% of our total base as of August 31, 2025, that's up from 12, 3% at the end of the prior year.
This growth reflects our increased focus on the segment through targeted platinum promotional campaigns.
Fourth quarter membership income reached $22 6 million or.
A 14, 9% increase over the same period last year, driven by higher platinum penetration and a $5 annual fee increase for all membership types implemented gradually across fiscal year, 2024, and all but one market.
We continued with a strong 12 months renewal rate of 88, 8% for fiscal year 2025.
With that I'll turn it over to Bob <unk> continue the financial review.
Thank you David continuing with the income statement total gross margin as a percentage of net merchandise sales for the fourth quarter of fiscal year 2025 remain unchanged at $15, 7% when compared to the fourth quarter of fiscal year 2024.
In total gross margin increased by $16 9 million or approximately 9% versus the same quarter of the prior fiscal year.
Total revenue margins for the fourth quarter increased 10 basis points to 17, 4% of total revenue when compared to the same period last year.
The 10 basis point increase is primarily driven by the strong membership results that David mentioned before.
Moving to SG&A.
SG&A expenses increased to 15, 5% of solar revenues for the fourth quarter of fiscal year 2025.
Payouts were 15, 3% for the fourth quarter of fiscal year 2024.
For the full fiscal year 2025, total SG&A expenses increased to 12, 9% of total revenues compared to $12, 7% all spoke on revenues for fiscal 2000 and tasteful.
The increase in both periods is primarily due to investments in technology.
The company incurred costs of approximately 600000 Lotus in the fourth quarter and $3 7 million in the fiscal year related to growth and technology projects such as.
The implementation of the railings and neither of those systems.
Additionally, we had approximately 700000 doors in the fourth quarter of $1 $6 million in the fiscal year of one time expenses associated with CFO transition costs as well as approximately 600000 boes in the fourth quarter and $1 1 million into fiscal year related to the relocation of some gave a corporate office.
For fiscal year, <unk> expenses would be impacted by the compensation of our Chief Executive officer, as our interim Chief Executive Officer, and fiscal year 2025 declines to receive compensation for his services staff.
Operating income in the quarter increased seven 2% versus prior year to $52 eight video.
Operating income for the fiscal year increased five 2% versus prior year to $232 5 million.
In other expenses in the fourth quarter, we recorded a loss of $6 4 million. This is better than the fourth quarter of fiscal year 2020 floor by $1 million, primarily driven by a decrease in foreign currency conversion transaction cost.
Our effective tax rate for the fourth quarter of fiscal year 2025 came in at 32% versus 34% a year ago as we sell into a minimum tax position some of our markets to close of the year.
Tax planning is central to us.
Significant expense.
It's also complicated as we operate in many jurisdictions, making it particularly complex to estimate quarter by quarter, the tax provision as projected and calculated on an ongoing basis.
Despite the increase in the rate in the fourth quarter. It's important to note that for the full fiscal year 2025, the effective tax rate was 28, 4% down from 31, 1% for the prior year period. This shows the result of our continued efforts in gear.
Net income.
For the fourth quarter of fiscal year, two and simplify with $31 5 million or $1.02 per diluted share.
Compared to $29 1 million or 94.
We would share in the fourth quarter of fiscal year 2024.
For the full fiscal year 2025, net income was $147 9 million or $4 82 per diluted share compared to $158 9 million or <unk> 67 per diluted share in the comparable prior year period.
Adjusted EBITDA for the fourth quarter of fiscal year, 2025, plus $75 5 million compared.
Compared to $78 7 million in the same period last year.
Adjusted EBITDA for fiscal year, 2025 was $328 7 million compared to $3 6 million in the same period last year.
Moving onto our balance sheet and cash flow, we ended the quarter with cash cash equivalents and restricted cash totaling $285 3 million.
In addition to approximately $73 2 million of short term investments.
A cash flow perspective, net cash provided by operating activities reached $261 3 million during the fiscal year.
An increase of $53 7 million versus prior year.
Changes in our merchandise inventory and accounts payable positions contributed $17 7 million for the overall increase.
Primary causal fees with a lower year over year increase in inventory compared to prior year due to one less class, but also into fiscal year 2025 versus the three clubs that we opened in fiscal year 2024.
And due to the timing of holiday seasonal buildup.
Net cash used in investing activities decreased by $46 6 million for fiscal year 2025 compared to the prior year.
Finally, due to a decrease in additions to property and equipment standpoint 4 million.
The net decrease in purchases less proceeds of short term investments of $35 for me.
Net cash provided by financing activities in fiscal year 2025 increased by $164 2 million, primarily driven by $65 4 million net increase in long term bank borrowings.
At $66 $8 million decrease will repurchases of our common stock.
And at $27 4 million decrease in cash dividend payments.
When reviewing our cash balances. It is important to note that as a follow ups as the first 2025, we had $59 7 million of cash cash equivalents and short term investments.
Nominated in local currency in Trinidad.
Which we could not really convert into U S dollars.
Honduras were currently able to serve substantially all of the U S dollar that we need.
We faced similar U S dollar liquidity challenges in the country from fiscal year 2020 through the first half of fiscal year 2025.
We're monitoring this closely of the Central Bank still has the street puzzles there on the availability of U S dollars.
Looking forward a little into our current first quarter, our comparable net merchandise sales for the eight weeks ended October 26 2025.
Seven 2% and six 5% in constant currency.
In closing, we're proud of all our accomplishments in the fourth quarter and fiscal year 2025, as we enter fiscal year 2026, we remained dedicated to our members our people on our communities.
We're excited about the many initiatives, we have underway, especially on the technological front to make our point of sale. So clay turn another front and back office processes more efficient.
Looking forward to growth will be steady in 2026.
Thank you for joining our call today.
I will now turn the call over to the operator to take your questions.
Operator, you may now start taking out cost questions.
Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.
If you would like to withdraw that question again press star one.
Your first question comes from Jon Braatz, with Kansas City Capital. Please go ahead.
Good morning, everyone.
David.
In Jamaica I take it that.
With the stores being opened that they were on damage.
During the hurricane as that is.
Correct.
Okay, let's restart yes, so regarding our clubs in Jamaica, they were not damaged.
And we take great care in how we construct those buildings and knowing very well that we are in a hurricane area.
The storm turned westward Luckily for those locations listing structure in Westwood kind.
Kind of at the last minute. So we were.
Kind of spurred the full brunt of the storm. So we're open and we're flowing in Kingston.
We're starting to get merchandising.
But different parts of the islands have different impacts right and so.
It's going to take time for the countries too.
To recovery.
Okay, So youre getting merchandise.
<unk>.
Yes.
Okay looking at the two stores that you.
We're going to build in.
Turning to that and I'll take or pay and soft cap South campus.
A smaller acreage is it is it going to be a smaller store than what is typical.
That's not the intention we're going to have to do some changes in our parking format.
To support the sort of parking that we require but the intention is to have a typical size clubs there.
Your next question comes from the line of Hector Maya with Scotiabank. Please go ahead.
Alright, well. Thank you very much for taking my questions and congratulations to you both on your new roles.
I know that you're still assessing the potential opportunities for expansion in Chile.
We saw you saw Anthony sorry, one last one.
Seven.
And once it's been now if everything goes well.
Now it is in Chile would it be fair to assume that any first opening there Mike.
2020, thanks for attending from Kevin should we assume that it might take longer than Jonathan are starting to see something there.
And also.
Yes that one person go ahead I have a follow up thank you.
Okay well.
Thank you.
For calling in today and for your question.
So we haven't provided any information beyond what's in the 10-K about.
Our opening plan. So we do have a site thats under executive 40 agreement.
And so that we.
We continue to make progress there.
But we have not provided opening data information at this point. So that's all I can share with you but.
But I appreciate the question.
Hello, Stan I'm, sorry, thank you very much.
Also and maybe the margins by segment could you. Please share the dynamics by country and there were any methodology changes or just.
Sure.
Yes. Thank you for the question.
No changes in the methodology.
As you know we don't we don't disclose details on D, but I can tell you that.
We have not seen any material mix changes that would impact EBITDA.
Your next question comes from the line of Jon Braatz with Kansas City Capital. Please go ahead.
I'm back.
David Eric.
As we look ahead.
And the next calendar year.
They're going to be some changes in remittances.
From the U S back to a number of your countries.
I guess my question is.
And there was a 1% per year.
Think that could have an impact on.
On the sales performance of <unk>.
Of your stores.
Thank you John for the question that's an important question.
You're right that several of our markets have significant portion of GDP represented by remittances Ciber invented particularly Jamaica.
Andreas El Salvador, and the largest by Guatemala is not insignificant cabinet can either as Nicaragua, but having said that we have no indication so far.
A slowdown that's impacted.
That's an assumption that we can see certainly coming out of the realm of the hospital.
And at this point, we don't have any indication.
And impact.
Clothes for England.
Okay.
Thanks.
That concludes our question and answer session I will now turn it back over to David for closing comments.
Great. Thank you very much I just want to thank everyone for calling in today and send another message of gratitude to our team for everything they do we wouldn't be here without all of our great employees on the ground and in our Central office. So thanks. Thanks, a lot everyone have a good day.
This concludes today's conference call. Thank you for your participation and you may now disconnect.