PriceSmart (NASDAQ:PSMT) reported higher third-quarter sales and earnings for fiscal 2026, with management pointing to broad-based comparable sales growth, stronger membership trends and continued investment in new clubs, supply chain capabilities and technology.
On the company’s earnings call, Chief Executive Officer David Price said PriceSmart delivered the results “against the backdrop of continued global uncertainty, currency volatility, evolving trade policy, and broader macroeconomic pressures.” He said the company is encouraged by business trends heading into the final quarter of the fiscal year.
For the first nine months of fiscal 2026, net merchandise sales reached nearly $4.3 billion, while total revenue was nearly $4.4 billion. Net merchandise sales increased 11%, or 8.6% in constant currency, and comparable net merchandise sales rose 8.8%, or 6.4% in constant currency.
Sales Growth Spans Regions and Categories
Price said the company’s third-quarter sales growth reflected both higher ticket sizes and more transactions. The average sales ticket increased 5% from the prior-year period, while transactions rose 7.1%. The average price per item increased 6%, while average items per basket declined 1%.
By region, PriceSmart reported growth across its operating footprint:
- Central America: Net merchandise sales increased 10.6%, or 7.7% in constant currency. Comparable net merchandise sales rose 7.9%, or 5.2% in constant currency.
- Caribbean: Net merchandise sales increased 6.8%, or 6.2% in constant currency. Comparable net merchandise sales rose 6.2%, or 5.6% in constant currency.
- Colombia: Net merchandise sales increased 35.3%, or 18.6% in constant currency. Comparable net merchandise sales rose 35.7%, or 18.9% in constant currency.
Price said Colombia’s increase was driven in part by appreciation of the Colombian peso compared with the prior year, along with other operational and market-driven factors.
On merchandising, the foods category grew approximately 12.5% in the third quarter, while non-foods increased approximately 12.3%. Price said the company has benefited from reconfigured warehouse club layouts that increased visibility for soft-line merchandise. He also highlighted momentum in limited-time and seasonal offerings, including apparel, housewares, small appliances and sporting goods.
PriceSmart also built a broader assortment around the 2026 FIFA World Cup, including food, beverage, electronics and soccer-themed offerings, as well as digital campaigns in select markets.
Membership Income Rises as Platinum Penetration Expands
Membership accounts increased 8.6% year over year to more than 2.1 million. Price said Colombia posted particularly strong account growth of 11.6%, and has also been one of the company’s leading markets for Platinum Membership sign-ups.
Membership income increased 17.6% from the prior-year quarter. Platinum accounts represented 21.3% of the total membership base as of May 31, up from 16.1% a year earlier. Price said Platinum upgrades have been a significant contributor to membership income growth.
Membership income as a percentage of revenue was 1.7% in the third quarter, consistent with the prior-year period. The 12-month renewal rate reached 90.5% as of May 31, which Price described as a new all-time high for the second consecutive quarter.
Chile Expansion and Club Pipeline Advance
PriceSmart announced that it executed a lease during the quarter for its first warehouse club in Chile, located in Comuna Las Condes in Santiago within the Mallplaza Los Dominicos shopping center. The club is expected to open in spring 2027.
Price said the Chile location will be PriceSmart’s first warehouse club in a mall setting and will serve as a foundation for what the company believes could become a “meaningful multi-club market over time.” The company has also entered into agreements to acquire land for two additional potential warehouse club sites in Chile.
PriceSmart expects to spend approximately $100 million in capital expenditures on its first three Chile warehouse clubs and central offices over the next several fiscal years. Price said the company has begun building a local team in Chile, including a country general manager and local buying team, and currently has about 20 employees working from leased office space.
During the Q&A portion of the call, Price said Chile differs from Colombia in several ways, including market size, income levels and population concentration. He said Santiago accounts for about half of Chile’s population and is located roughly 90 minutes from a major port. He also said the company is applying lessons learned from Colombia, including the importance of building the right local team and offering a strong mix of local and imported goods.
PriceSmart also purchased land in the fourth quarter of fiscal 2026 for its 11th club in Costa Rica, in Santo Tomás de Santo Domingo in Heredia province, with an anticipated opening in spring 2027. Other previously announced clubs in the pipeline include Ciudad Quesada, Costa Rica; Montego Bay and South Camp Road in Kingston, Jamaica; and Villa Nueva, Guatemala. Once the six new clubs are open, PriceSmart said it will operate 63 warehouse clubs.
Margins Improve, Earnings Rise
Chief Financial Officer Gualberto Hernandez said total gross margin for the quarter increased 20 basis points to 16% of net merchandise sales, primarily due to improved margins in non-foods. Total revenue margins improved 30 basis points to 17.7% of total revenue, reflecting higher gross margin and strength in membership renewals and Platinum growth.
Total SG&A expenses rose slightly to 13.3% of total revenue from 13.2% a year earlier, driven primarily by higher warehouse club and other operations costs, including expenses tied to the launch in Chile. Hernandez said Chile preopening expenses represented about a 10-basis-point impact to SG&A in the quarter.
Operating income increased 16.7% year over year to $65.6 million, representing 4.4% of revenue compared with 4.3% a year earlier. Net income increased 12.3% to $39.7 million, or $1.28 per diluted share, from $35.2 million, or $1.14 per diluted share, in the prior-year quarter.
Adjusted EBITDA for the quarter was $90.4 million, up 14.5% from $79 million a year earlier. For the first nine months of fiscal 2026, net income was $128.9 million, or $4.18 per diluted share, up from $116.3 million, or $3.80 per diluted share, in the comparable period. Adjusted EBITDA for the first nine months increased 13% to $277 million.
Hernandez said PriceSmart ended the quarter with cash, cash equivalents and restricted cash totaling $254.6 million, plus approximately $113.7 million in short-term investments. He noted that as of May 31, the company had TTD 44.1 million in cash equivalents and short- and long-term investments denominated in Trinidad local currency that could not be readily converted into U.S. dollars.
Technology, Supply Chain and Currency Issues Remain in Focus
PriceSmart said digital channel sales reached $99.6 million in the third quarter, the company’s highest dollar volume to date. Digital sales increased 26.2% year over year and represented 6.9% of total net merchandise sales. Orders placed directly through the company’s website or app rose 20.3%, while average transaction value increased 4.4%.
As of May 31, 75.8% of PriceSmart members had created an online profile, and 27.1% had made a purchase through the company’s website or app.
The company also continued its technology and supply chain initiatives. Price said PriceSmart began operations at a new distribution center in Bogotá, Colombia, during the quarter, and plans to open distribution centers in Jamaica during fiscal 2026 and the Dominican Republic during fiscal 2027. PriceSmart also continues to roll out the RELEX forecasting and replenishment platform, with full implementation expected in the second quarter of fiscal 2027.
In response to an analyst question about Trinidad, Hernandez said the company sourced more U.S. dollars during the quarter, helping reduce trapped cash balances, but said there had been no material change in market conditions. He said the company continues to apply a premium in its costs to cover currency constraints and is evaluating ways to reduce its need for U.S. dollars in Trinidad or access them through compliant alternatives.
Looking ahead, Price said comparable net merchandise sales for the four weeks ended June 28 were up 11.2%, or 6.5% in constant currency, providing an early view into the company’s fiscal fourth quarter.
About PriceSmart (NASDAQ:PSMT)
PriceSmart, Inc (NASDAQ: PSMT) is a U.S.-based retailer specializing in membership warehouse clubs. Founded in 1993, the company operates under a business model that offers bulk quantities of goods at discounted prices to individuals and businesses that purchase annual memberships. PriceSmart’s value proposition centers on low-cost operations, high-volume purchasing, and a no-frills shopping environment designed to pass savings directly to its members.
The company’s product assortment covers a broad range of merchandise categories, including groceries and fresh produce, household essentials, electronics, appliances, office supplies, furniture, and health and beauty items.
