PriceSmart, Inc. (PSMT) - Q3 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended May 31, 2026, and the nine months ended May 31, 2026. PriceSmart operates 57 membership warehouse clubs across 12 countries and one U.S. territory (Central America, the Caribbean, and Colombia). The company is actively expanding, with plans to open six new clubs by fiscal year 2027, including its first location in Chile. The company reported 30,860,524 shares of common stock outstanding as of June 30, 2026.
Key Financial Metrics
| Metric (Nine Months Ended May 31) | 2026 (in thousands) | 2025 (in thousands) | Change |
|---|---|---|---|
| Total Revenues | $4,360,050 | $3,939,119 | +10.7% |
| Net Merchandise Sales | $4,271,024 | $3,848,411 | +11.0% |
| Operating Income | $203,988 | $179,760 | +13.5% |
| Net Income | $128,948 | $116,346 | +10.8% |
| Diluted EPS | $4.18 | $3.80 | +10.0% |
| Adjusted EBITDA | $277,015 | $245,133 | +13.0% |
| Operating Cash Flow | $192,210 | $179,160 | +7.3% |
| Total Debt (Current + Long-term) | $179,700 | $186,597 | -3.7% |
| Cash & Equivalents (Total) | $254,622 | $285,291 | -10.7% |
Margins: Total gross margin percentage was 16.0% for the nine months ended May 31, 2026, an increase of 30 basis points year-over-year. Total revenue margin was 17.7%, up 40 basis points.
Material Changes vs. Prior Period
- Revenue Growth: Driven by a 7.6% increase in transactions and a 3.1% increase in average ticket. Comparable net merchandise sales increased 8.8% (6.4% on a constant currency basis).
- Segment Performance: The Colombia segment saw significant growth (31.3% increase in net merchandise sales) largely due to the appreciation of the Colombian peso. Central America and Caribbean segments also posted double-digit and mid-single-digit growth, respectively.
- Other Expenses: "Other expense, net" increased to $24.1 million (from $19.1 million) primarily due to $9.2 million in losses from the revaluation of U.S. dollar-denominated monetary assets/liabilities (notably in Costa Rica) and $15.1 million in transaction costs related to currency conversion in markets with U.S. dollar liquidity issues (e.g., Trinidad).
- Capital Expenditures: Increased significantly to $144.1 million (from $101.6 million) to fund new club openings, distribution centers, and technology upgrades.
Guidance, Outlook, and Risks
- Expansion Strategy: The company plans to open six new clubs by fiscal 2027, including locations in Jamaica, Costa Rica, Guatemala, and Chile. Distribution centers are being opened in Trinidad, Colombia, and planned for Jamaica and the Dominican Republic.
- Digital Growth: Digital channel sales reached $99.6 million in Q3 2026, a 26.2% year-over-year increase, representing 6.9% of total net merchandise sales.
- Membership: Platinum membership accounts now represent 21.3% of the total base (up from 16.1% last year). The trailing twelve-month renewal rate reached an all-time high of 90.5%.
- Risks & Contingencies:
- Currency Volatility: Significant exposure to foreign exchange fluctuations, particularly in Colombia, Costa Rica, and the Dominican Republic. Devaluations can reduce reported sales and margins.
- U.S. Dollar Liquidity: Ongoing challenges in converting local currencies to U.S. dollars in Trinidad and Honduras, leading to transaction costs and potential funding delays.
- Tax Receivables: The company holds significant income tax receivables ($59.4 million) and VAT receivables ($36.7 million) in various jurisdictions, with recovery timelines ranging from months to years. No allowance has been recorded as management believes recovery is probable.
- Geopolitical & Operational: Risks include civil unrest (e.g., Panama, Guatemala), natural disasters (e.g., Hurricane Melissa in Jamaica), and supply chain disruptions.
Investor Verification Checklist
- Currency Impact: Verify the sustainability of the Colombian peso appreciation and its effect on future reported earnings versus constant currency performance.
- Liquidity Constraints: Monitor the status of U.S. dollar availability in Trinidad and Honduras and the associated premium costs for currency conversion.
- Tax Receivables Recovery: Assess the timeline and probability of recovering the $59.4 million in income tax receivables and $36.7 million in VAT receivables, particularly in jurisdictions with complex tax laws.
- Capital Allocation: Review the ROI on the increased capital expenditures ($144.1M) for new clubs and distribution centers, specifically the Chile expansion.
- Membership Trends: Track the growth rate of Platinum memberships and renewal rates to ensure continued revenue stability from membership fees.