Business
PRICESMART ANNOUNCES FISCAL 2022 FOURTH QUARTER OPERATING RESULTS
NET MERCHANDISE SALES GREW 13.6%COMPARABLE NET MERCHANDISE SALES INCREASED 9.2%MEMBERSHIP BASE AT RECORD HIGH AND RENEWAL RATE OF 88.9%EPS GREW 19% TO $0.75
About this update from Pricesmart, Inc.
NET MERCHANDISE SALES GREW 13.6% COMPARABLE NET MERCHANDISE SALES INCREASED 9.2% MEMBERSHIP BASE AT RECORD HIGH AND RENEWAL RATE OF 88.9% EPS GREW 19% TO $0.75 SAN DIEGO , Oct. 31, 2022 /PRNewswire/ -- PriceSmart, Inc. (NASDAQ: PSMT), operator of 50 warehouse clubs in 12 countries and one U.S. territory, today announced results for the fiscal fourth quarter of 2022, which ended on August 31, 2022 . Comments from Sherry S. Bahrambeygui , Chief Executive Officer: "Our team delivered impressive results for the fourth quarter, with net merchandise sales finishing at $989.9 million and total revenues exceeding $1.0 billion for the quarter and $4.0 billion for the year. Net merchandise sales grew by 13.6%, after a negative 2.9% currency impact, and comparable net merchandise sales increased by 9.2%, after a negative 2.7% currency impact. "Our total membership base grew to a new record of 1.76 million accounts, representing growth of 5.5% versus last year. Our 12-month membership renewal rate was 88.9%, and our membership income for the fourth quarter was a record $15.6 million , an increase of 6.7% over the same period last year. We believe that these strong results and solid renewal rates demonstrate that our team is executing well on our unique club-focused business model and that our Members are pleased with the value they are receiving. "Our team adeptly handled the excess inventory challenges head-on and efficiently moved through overstocks, allowing us to begin restoring a more normalized inventory balance and margin structure. "We ended the year with a strong balance sheet, which included cash, cash equivalents and restricted cash of $251.4 million and debt of only $137.3 million . "As to fiscal year 2023, we are off to a respectable start with September total net merchandise sales of $324.1 million , an increase of 12.1% over the same period in the prior year, and comparable net merchandise sales for the four-week period ended October 2, 2022 that increased 7.8% compared to the same period last year. Currency fluctuations continued to negatively impact net merchandise and comparable net merchandise sales by 2.0% and 2.1%, respectively, in the first month of the fiscal first quarter. "Our team continually strives for improvement, and with each new experience, our team becomes more agile and better prepared to take on the uncertainties and capitalize on potential opportunities going forward." Fourth Quarter Financial Results Total revenues for the fourth quarter of fiscal year 2022 increased 12.3% to $1.02 billion compared to $909.6 million in the comparable period of the prior year. For the fourth quarter of fiscal year 2022, net merchandise sales increased 13.6% to $989.9 million from $871.2 million in the fourth quarter of fiscal year 2021. Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by $24.8 million , or 2.9%, versus the same period in the prior year. The Company had 50 warehouse clubs in operation as of August 31, 2022 compared to 47 warehouse clubs in operation as of August 31, 2021 . Comparable net merchandise sales for the 47 warehouse clubs that have been open for greater than 13 ½ calendar months increased 9.2% for the 14-week period ended September 4, 2022 compared to the comparable 14-week period of the prior year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $24.9 million , or 2.7%, versus the same period in the prior year. The Company recorded operating income during the fiscal fourth quarter of $39.0 million compared to operating income of $32.5 million in the prior year period. Net income attributable to PriceSmart grew 19.5% to $23.3 million , or $0.75 per diluted share, in the fourth quarter of fiscal year 2022 as compared to $19.5 million , or $0.63 per diluted share, in the fourth quarter of fiscal year 2021. Full Year Financial Results Total revenues for the fiscal year ended August 31, 2022 increased 12.3% to $4.07 billion compared to $3.62 billion in the prior year. Comparable net merchandise sales for warehouse clubs that have been open for greater than 13 ½ calendar months increased 10.4% for the 53-week period ended September 4, 2022 compared to the comparable 53-week period of the prior year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $76.2 million, or 2.2%, versus the prior year. The Company recorded operating income during the fiscal year ended August 31, 2022 of $167.1 million compared to operating income of $158.0 million in the prior year. Net income attributable to PriceSmart grew 6.6% to $104.5 million , or $3.38 per diluted share, in the fiscal year ended August 31, 2022 as compared to $98.0 million , or $3.18 per diluted share, in the prior year. Conference Call Information PriceSmart management will host a conference call at 12:00 p.m. Eastern time ( 9:00 a.m. Pacific time ) on Tuesday, November 1, 2022 , to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing toll free (855) 209-8211 or (412) 317-5214 for international callers and asking to join the PriceSmart earnings call. A digital replay will be available shortly following the conclusion of the call through November 8, 2022 by dialing (877) 344-7529 for domestic callers, or (412) 317-0088 for international callers, and entering replay passcode 1071897. About PriceSmart PriceSmart , headquartered in San Diego , owns and operates U.S. -style membership shopping warehouse clubs in Latin America and the Caribbean , selling high quality merchandise and services at low prices to PriceSmart Members. PriceSmart operates 50 warehouse clubs in 12 countries and one U.S. territory (nine in Colombia ; eight in Costa Rica ; seven in Panama ; five in the Dominican Republic and Guatemala , four in Trinidad ; three in Honduras ; two each in El Salvador , Nicaragua , and Jamaica ; and one each in Aruba , Barbados and the United States Virgin Islands ). In addition, the Company plans to open a warehouse club in San Miguel , El Salvador in the spring of 2023 and a warehouse club in Medellín, Colombia in the summer of 2023. Once these two new clubs are open, the Company will operate 52 warehouse clubs. This press release may contain forward-looking statements concerning PriceSmart, Inc.'s (" PriceSmart ", the "Company" or "we") anticipated future revenues and earnings, adequacy of future cash flows, omni-channel initiatives, proposed warehouse club openings, the Company's performance relative to competitors and related matters. These forward-looking statements include, but are not limited to, statements containing the words "expect," "believe," "will," "may," "should," "project," "estimate," "anticipated," "scheduled," "intend," and like expressions, and the negative thereof. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, but not limited to: various political, economic and compliance risks associated with our international operations, adverse changes in economic conditions in our markets, natural disasters, volatility in currency exchange rates and illiquidity of certain local currencies in our markets, competition, consumer and small business spending patterns, political instability, increased costs associated with the integration of online commerce with our traditional business, whether the Company can successfully execute strategic initiatives, our reliance on third party service providers, including those who support transaction and payment processing, data security and other technology services, cybersecurity breaches that could cause disruptions in our systems or jeopardize the security of Member or business information, cost increases from product and service providers, interruption of supply chains, novel coronavirus (COVID-19) related factors and challenges, exposure to product liability claims and product recalls, recoverability of moneys owed to PriceSmart from governments, and other important factors discussed in the Risk Factors section of the Company's most recent Annual Report on Form 10-K, and other factors discussed from time to time in other filings with the SEC , which are accessible on the SEC's website at www.sec.gov , including Quarterly Reports on Form 10-Q and Current Reports on Form 8- K. Forward -looking statements speak only as of the date that they are made, and the Company does not undertake to update them, except as required by law. For further information, please contact Michael L. McCleary , EVP, Chief Financial Officer and Principal Accounting Officer (858) 404-8826 or send an email to [email protected] . PRICESMART, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA) Three Months Ended Twelve Months Ended August 31 , August 31 , August 31 , August 31 , 2022 2021 2022 2021 Revenues: Net merchandise sales $ 989,867 $ 871,191 $ 3,944,817 $ 3,465,442 Export sales 12,613 10,720 45,217 41,520 Membership income 15,585 14,603 60,887 56,030 Other revenue and income 3,305 13,092 15,172 56,879 Total revenues 1,021,370 909,606 4,066,093 3,619,871 Operating expenses: Cost of goods sold: Net merchandise sales 836,424 733,036 3,340,062 2,912,489 Export sales 11,987 9,945 43,074 39,513 Non-merchandise — 5,489 1,809 23,336 Selling, general and administrative: Warehouse club and other operations 96,891 94,618 378,161 359,221 General and administrative 36,654 33,400 133,185 125,416 Pre-opening expenses 65 198 1,471 849 Loss on disposal of assets 384 459 1,265 1,027 Total operating expenses 982,405 877,145 3,899,027 3,461,851 Operating income 38,965 32,461 167,066 158,020 Other expense: Interest income 661 525 2,201 1,979 Interest expense (2,787) (1,353) (9,611) (7,210) Other expense, net (1,402) (1,471) (3,235) (5,603) Total other expense (3,528) (2,299) (10,645) (10,834) Income before provision for income taxes and loss of unconsolidated affiliates 35,437 30,162 156,421 147,186 Provision for income taxes (12,129) (10,704) (51,858) (48,969) Loss of unconsolidated affiliates (4) (24) (10) (58) Net income 23,304 19,434 104,553 98,159 Less: net income attributable to noncontrolling interest — 27 (19) (196) Net income attributable to PriceSmart, Inc. $ 23,304 $ 19,461 $ 104,534 $ 97,963 Net income attributable to PriceSmart, Inc. per share available for distribution: Basic $ 0.75 $ 0.63 $ 3.38 $ 3.18 Diluted $ 0.75 $ 0.63 $ 3.38 $ 3.18 Shares used in per share computations: Basic 30,620 30,424 30,591 30,403 Diluted 30,638 30,424 30,600 30,403 Dividends per share $ 0.43 $ 0.35 $ 0.86 $ 0.70 PRICESMART, INC. CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA) August 31 , August 31 , 2022 2021 ASSETS Current Assets: Cash and cash equivalents $ 237,710 $ 202,060 Short-term restricted cash 3,013 3,647 Short-term investments 11,160 50,233 Receivables, net of allowance for doubtful accounts of $103 as of August 31, 2022 and $94 as of August 31, 2021 ,respectively 13,391 12,359 Merchandise inventories 464,411 389,711 Prepaid expenses and other current assets (includes $2,761 and $0 as of August 31, 2022 and August 31, 2021 ,respectively, for the fair value of derivative instruments) 43,894 39,194 Total current assets 773,579 697,204 Long-term restricted cash 10,650 9,772 Property and equipment, net 757,241 730,204 Operating lease right-of-use assets, net 111,810 123,655 Goodwill 43,303 45,095 Other intangibles, net 765 7,762 Deferred tax assets 28,355 24,225 Other non-current assets (includes $11,884 and $2,464 as of August 31, 2022 and August 31, 2021 , respectively,for the fair value of derivative instruments) 72,163 57,329 Investment in unconsolidated affiliates 10,534 10,544 Total Assets $ 1,808,400 $ 1,705,790 LIABILITIES AND EQUITY Current Liabilities: Short-term borrowings $ 10,608 $ — Accounts payable 408,407 388,791 Accrued salaries and benefits 44,097 41,896 Deferred income 29,228 26,898 Income taxes payable 7,243 8,310 Other accrued expenses and other current liabilities (includes $82 and $0 as of August 31, 2022 and August 31 ,2021, respectively, for the fair value of derivative instruments) 38,667 39,736 Operating lease liabilities, current portion 7,491 8,526 Long-term debt, current portion 33,715 19,395 Total current liabilities 579,456 533,552 Deferred tax liability 2,165 1,568 Long-term income taxes payable, net of current portion 5,215 4,160 Long-term operating lease liabilities 118,496 129,256 Long-term debt, net of current portion 103,556 110,110 Other long-term liabilities (includes $0 and $3,010 for the fair value of derivative instruments and $8,440 and $7,380 for post-employment plans as of August 31, 2022 and August 31, 2021 , respectively) 8,439 10,930 Total Liabilities 817,327 789,576 PRICESMART, INC. CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA) Stockholders' Equity: Common stock $0.0001 par value, 45,000,000 shares authorized; 31,697,590 and 31,467,971 shares issued and 30,904,826 and 30,755,308 shares outstanding (net of treasury shares) as of August 31, 2022 and August 31, 2021 , respectively 3 3 Additional paid-in capital 481,406 465,015 Accumulated other comprehensive loss (195,586) (182,508) Retained earnings 736,894 658,919 Less: treasury stock at cost, 792,764 shares as of August 31, 2022 and 712,663 shares as of August 31, 2021 (31,644) (26,084) Total stockholders' equity attributable to PriceSmart, Inc. stockholders 991,073 915,345 Noncontrolling interest in consolidated subsidiaries — 869 Total Stockholders' Equity 991,073 916,214 Total Liabilities and Equity $ 1,808,400 $ 1,705,790 View original content to download multimedia: https://www.prnewswire.com/news-releases/pricesmart-announces-fiscal-2022-fourth-quarter-operating-results-301663692.html SOURCE PriceSmart, Inc.