Business
PRICESMART ANNOUNCES RECORD FISCAL 2022 SECOND QUARTER OPERATING RESULTS
NET MERCHANDISE SALES EXCEED $1 BILLION NET MERCHANDISE SALES GREW BY 12.6%COMPARABLE NET MERCHANDISE SALES GREW BY 10.3%MEMBERSHIP BASE AND RENEWAL RATE
About this update from Pricesmart, Inc.
NET MERCHANDISE SALES EXCEED $1 BILLION NET MERCHANDISE SALES GREW BY 12.6% COMPARABLE NET MERCHANDISE SALES GREW BY 10.3% MEMBERSHIP BASE AND RENEWAL RATE INCREASED TO RECORD LEVELS OPERATING INCOME INCREASED BY 7.4% $1.03 DILUTED EARNINGS PER SHARE SAN DIEGO , April 7, 2022 /PRNewswire/ -- PriceSmart, Inc. (NASDAQ: PSMT), operator of 49 warehouse clubs in 12 countries and one U.S. territory, today announced record operating results for the fiscal second quarter of 2022, which ended on February 28, 2022 . Comments from Sherry S. Bahrambeygui , Chief Executive Officer: "Our team achieved a record second quarter, with net merchandise sales of more than $1 billion for the first time in our Company's history. The favorable results for the quarter were driven by net merchandise sales growth of 12.6% and comparable net merchandise sales growth of 10.3% as compared to the same period last year. Our 12-month trailing membership renewal rate was a record 89.8%, and our membership base has grown to its all-time high. "This quarter marks record performance in net merchandise sales, earnings per share, membership base and renewal rates. We continue the pursuit of our three drivers of growth that include expanding our real estate footprint, enhancing Member benefits and increasing incremental sales through PriceSmart.com . With respect to real estate, we plan to open our second club in Jamaica next week, located in the city of Portmore, marking the Company's 50th warehouse club. "We continue to invest in enhancing our Membership benefits, including our Wellness and other initiatives. PriceSmart.com is gaining traction as more members shop with us online. Through our digital presence we are increasing our engagement with Members which also helps drive in-club sales. We believe that our investments in these drivers of growth are providing positive momentum and results for the Company. "I am proud of our team's results despite facing and solving for supply chain issues being faced by many in our industry." Second Quarter Financial Results Total revenues for the second quarter of fiscal year 2022 increased 10.8% to $1.04 billion compared to $937.6 million in the comparable period of the prior year. For the second quarter of fiscal year 2022, net merchandise sales increased 12.6% to $1.01 billion from $898.4 million in the second quarter of fiscal year 2021. Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by $26.3 million , or 3.0%, versus the same period in the prior year. The Company had 49 warehouse clubs in operation as of February 28, 2022 compared to 47 warehouse clubs in operation as of February 28, 2021 . Comparable net merchandise sales for the 47 warehouse clubs that have been open for greater than 13 ½ calendar months increased 10.3% for the 13-week period ended February 27, 2022 compared to the comparable period of the prior year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $24.2 million or 2.7% versus the same period in the prior year. The Company recorded operating income during the fiscal second quarter of $48.3 million compared to operating income of $45.0 million in the prior year period. Net income attributable to PriceSmart was $31.5 million , or $1.03 per diluted share, in the second quarter of fiscal year 2022 as compared to $28.2 million , or $0.92 per diluted share, in the second quarter of fiscal year 2021. Conference Call Information PriceSmart management will host a conference call at 12:00 p.m. Eastern time ( 9:00 a.m. Pacific time ) on Friday, April 8, 2022 , to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (855) 209-8211 toll free or (412) 317-5214 for international callers and asking to join the PriceSmart, Inc. call. A digital replay will be available through April 15, 2022 , following the conclusion of the call by dialing (877) 344-7529 for domestic callers, or (412) 317-0088 for international callers, and entering replay passcode 5341114. 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 49 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 and Nicaragua ; and one each in Aruba , Barbados , Jamaica and the United States Virgin Islands ). The Company plans to open a new warehouse club in Portmore, Jamaica in April 2022 and has begun construction on a club in Medellín, Colombia that is anticipated to open in the summer of 2023. Once these two new clubs are open, the Company will operate at least 51 warehouse clubs, depending on the timing of the development and construction of other warehouse club projects in our pipeline. This press release may contain forward-looking statements concerning the Company's anticipated future revenues and earnings, adequacy of future cash flows, omni-channel initiatives, proposed warehouse club openings, the Company's performance relative to competitors, the outcome of tax proceedings and related matters. These forward-looking statements include, but are not limited to, statements containing the words "expect," "believe," "will," "may," "plans," "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: adverse changes in economic conditions in the Company's markets, natural disasters, compliance risks, 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, 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, COVID-19 related factors and challenges, including among others, the duration of the pandemic, the unknown long-term economic impact, the impact of government policies and restrictions that have limited access for our Members, and shifts in demand away from discretionary or higher priced products to lower priced products, 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 Six Months Ended February 28 , February 28 , February 28 , February 28 , 2022 2021 2022 2021 Revenues: Net merchandise sales $ 1,011,896 $ 898,404 $ 1,955,939 $ 1,736,773 Export sales 8,674 9,706 19,208 20,587 Membership income 15,071 13,799 29,862 27,098 Other revenue and income 2,916 15,660 8,904 30,543 Total revenues 1,038,557 937,569 2,013,913 1,815,001 Operating expenses: Cost of goods sold: Net merchandise sales 853,633 755,108 1,646,826 1,458,727 Export sales 8,215 9,315 18,282 19,748 Non-merchandise — 6,268 1,809 12,092 Selling, general and administrative: Warehouse club and other operations 93,993 90,449 185,189 175,281 General and administrative 33,951 31,270 65,644 58,791 Pre-opening expenses 130 48 1,100 650 Loss on disposal of assets 313 132 724 202 Total operating expenses 990,235 892,590 1,919,574 1,725,491 Operating income 48,322 44,979 94,339 89,510 Other income (expense): Interest income 549 445 1,067 936 Interest expense (2,438) (2,228) (4,028) (4,261) Other income (expense), net (819) (292) 590 (1,837) Total other expense (2,708) (2,075) (2,371) (5,162) Income before provision for income taxes and loss of unconsolidated affiliates 45,614 42,904 91,968 84,348 Provision for income taxes (14,139) (14,565) (29,953) (28,183) Loss of unconsolidated affiliates (14) (12) (24) (21) Net income 31,461 28,327 61,991 56,144 Less: net income attributable to noncontrolling interest — (91) (19) (171) Net income attributable to PriceSmart, Inc. $ 31,461 $ 28,236 $ 61,972 $ 55,973 Net income attributable to PriceSmart, Inc. per share available for distribution: Basic $ 1.03 $ 0.92 $ 2.01 $ 1.82 Diluted $ 1.03 $ 0.92 $ 2.01 $ 1.82 Shares used in per share computations: Basic 30,578 30,376 30,565 30,387 Diluted 30,582 30,404 30,593 30,412 PRICESMART, INC. CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA) February 28 , 2022 August 31 , (Unaudited) 2021 ASSETS Current Assets: Cash and cash equivalents $ 178,705 $ 202,060 Short-term restricted cash 4,172 3,647 Short-term investments 26,933 50,233 Receivables, net of allowance for doubtful accounts of $52 as of February 28, 2022 and $94 as of August 31, 2021 , respectively 15,001 12,359 Merchandise inventories 470,313 389,711 Prepaid expenses and other current assets (includes $1,566 and $0 as of February 28, 2022 and August 31, 2021 , respectively, for the fair value of derivative instruments) 46,156 39,194 Total current assets 741,280 697,204 Long-term restricted cash 12,036 9,772 Property and equipment, net 753,671 730,204 Operating lease right-of-use assets, net 115,290 123,655 Goodwill 43,334 45,095 Other intangibles, net 1,542 7,762 Deferred tax assets 26,258 24,225 Other non-current assets (includes $4,583 and $2,464 as of February 28, 2022 and August 31, 2021 , respectively, for the fair value of derivative instruments) 69,399 57,329 Investment in unconsolidated affiliates 10,520 10,544 Total Assets $ 1,773,330 $ 1,705,790 LIABILITIES AND EQUITY Current Liabilities: Short-term borrowings $ 15,342 $ — Accounts payable 380,778 388,791 Accrued salaries and benefits 32,239 41,896 Deferred income 30,793 26,898 Income taxes payable 10,164 8,310 Other accrued expenses and other current liabilities 42,240 39,736 Operating lease liabilities, current portion 6,808 8,526 Dividends payable 13,430 — Long-term debt, current portion 28,761 19,395 Total current liabilities 560,555 533,552 Deferred tax liability 1,946 1,568 Long-term income taxes payable, net of current portion 5,602 4,160 Long-term operating lease liabilities 122,602 129,256 Long-term debt, net of current portion 120,057 110,110 Other long-term liabilities (includes $958 and $3,010 for the fair value of derivative instruments and $7,726 and $7,380 for post-employment plans as of February 28, 2022 and August 31, 2021 , respectively) 8,684 10,930 Total Liabilities 819,446 789,576 PRICESMART, INC. CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA) Stockholders' Equity: Common stock $0.0001 par value, 45,000,000 shares authorized; 31,626,219 and 31,467,971 shares issued and 30,871,179 and 30,755,308 shares outstanding (net of treasury shares) as of February 28, 2022 and August 31, 2021 , respectively 3 3 Additional paid-in capital 473,277 465,015 Accumulated other comprehensive loss (184,413) (182,508) Retained earnings 694,186 658,919 Less: treasury stock at cost, 755,040 shares as of February 28, 2022 and 712,663 shares as of August 31, 2021 (29,169) (26,084) Total stockholders' equity attributable to PriceSmart, Inc. stockholders 953,884 915,345 Noncontrolling interest in consolidated subsidiaries — 869 Total Stockholders' Equity 953,884 916,214 Total Liabilities and Equity $ 1,773,330 $ 1,705,790 View original content to download multimedia: https://www.prnewswire.com/news-releases/pricesmart-announces-record-fiscal-2022-second-quarter-operating-results-301520323.html SOURCE PriceSmart, Inc.