Pricesmart Inc 10-Q for FY2026 Q1
Pricesmart Inc (PSMT)
10-Q
2026-01-07
For: 2025-11-30
View Original
Added on
April 09, 2026
About this 10-Q
Pricesmart Inc filed this 10-Q on January 7, 2026, covering the quarter ended November 30, 2025 (FY2026 Q1).
Headline figures
Quarter ended November 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.38B
- up 9.9% from $1.26B a year earlier
- Net income
- $40.17M
- up 7.3% from net income of $37.43M a year earlier
- Diluted EPS
- $1.29
- up 6.6% from $1.21 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended November 30, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _______ to
COMMISSION FILE NUMBER 000-22793
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
(Registrant’s telephone number, including area code): (858 ) 404-8800
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.
No o | |||||
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
No o | |||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| x | Accelerated filer | o | |||||||||
| Non-accelerated filer | o | Smaller Reporting Company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o | No | |||||||
The registrant had 30,815,417 shares of its common stock, par value $0.0001 per share, outstanding at December 31, 2025.
PRICESMART, INC.
INDEX TO FORM 10-Q
| Page | ||||||||
CONSOLIDATED BALANCE SHEETS AS OF NOVEMBER 30, 2025 (UNAUDITED) AND AUGUST 31, 2025 | ||||||||
CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024 - UNAUDITED | ||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024 - UNAUDITED | ||||||||
CONSOLIDATED STATEMENTS OF EQUITY FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024 - UNAUDITED | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024 - UNAUDITED | ||||||||
i
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PriceSmart, Inc.’s (“PriceSmart,” “we,” the “Company” or “our”) unaudited consolidated balance sheet as of November 30, 2025 and the consolidated balance sheet as of August 31, 2025, the unaudited consolidated statements of income for the three months ended November 30, 2025 and 2024, the unaudited consolidated statements of comprehensive income for the three months ended November 30, 2025 and 2024, the unaudited consolidated statements of equity for the three months ended November 30, 2025 and 2024, and the unaudited consolidated statements of cash flows for the three months ended November 30, 2025 and 2024 are included herein. Also included herein are the notes to the unaudited consolidated financial statements.
1
PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
| November 30, 2025 (Unaudited) | August 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term restricted cash | |||||||||||
| Short-term investments | |||||||||||
Receivables, net of allowance for credit losses of $ | |||||||||||
| Merchandise inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Long-term restricted cash | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets, net | |||||||||||
| Goodwill | |||||||||||
| Deferred tax assets | |||||||||||
Other non-current assets (includes $ | |||||||||||
| Investment in unconsolidated affiliates | |||||||||||
| Total Assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Short-term borrowings | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued salaries and benefits | |||||||||||
| Deferred income | |||||||||||
| Income taxes payable | |||||||||||
Other accrued expenses and other current liabilities (includes $ | |||||||||||
| Operating lease liabilities, current portion | |||||||||||
| Long-term debt, current portion | |||||||||||
| Total current liabilities | |||||||||||
| Deferred tax liability | |||||||||||
| Long-term income taxes payable, net of current portion | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Long-term debt, net of current portion | |||||||||||
Other long-term liabilities (includes $ | |||||||||||
| Total Liabilities | |||||||||||
2
| Stockholders' Equity: | |||||||||||
Common stock $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Retained earnings | |||||||||||
Less: treasury stock at cost, | ( | ( | |||||||||
| Total Stockholders' Equity | |||||||||||
| Total Liabilities and Equity | $ | $ | |||||||||
See accompanying notes.
3
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED—AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
| Three Months Ended | |||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||
| Revenues: | |||||||||||
| Net merchandise sales | $ | $ | |||||||||
| Export sales | |||||||||||
| Membership income | |||||||||||
| Other revenue and income | |||||||||||
| Total revenues | |||||||||||
| Operating expenses: | |||||||||||
| Cost of goods sold: | |||||||||||
| Net merchandise sales | |||||||||||
| Export sales | |||||||||||
| Selling, general and administrative: | |||||||||||
| Warehouse club and other operations | |||||||||||
| General and administrative | |||||||||||
| Pre-opening expenses | |||||||||||
| Loss on disposal of assets | |||||||||||
| Total operating expenses | |||||||||||
| Operating income | |||||||||||
| Other income (expense): | |||||||||||
| Interest income | |||||||||||
| Interest expense | ( | ( | |||||||||
| Other expense, net | ( | ( | |||||||||
| Total other expense | ( | ( | |||||||||
| Income before provision for income taxes and loss of unconsolidated affiliates | |||||||||||
| Provision for income taxes | ( | ( | |||||||||
| Loss of unconsolidated affiliates | ( | ||||||||||
| Net income | $ | $ | |||||||||
| Net income per share available for distribution: | |||||||||||
| Basic | $ | $ | |||||||||
| Diluted | $ | $ | |||||||||
| Shares used in per share computations: | |||||||||||
| Basic | |||||||||||
| Diluted | |||||||||||
See accompanying notes.
4
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED—AMOUNTS IN THOUSANDS)
| Three Months Ended | |||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||
| Net income | $ | $ | |||||||||
| Other Comprehensive Income, net of tax: | |||||||||||
Foreign currency translation adjustments (1) | ( | ||||||||||
| Defined benefit pension plan: | |||||||||||
| Net gain (loss) arising during period | ( | ||||||||||
| Amortization of prior service cost and actuarial gains included in net periodic pensions cost | |||||||||||
| Total defined benefit pension plan | |||||||||||
Derivative instruments: (2) | |||||||||||
| Unrealized gains (losses) on change in derivative obligations | ( | ||||||||||
| Unrealized losses on change in fair value of interest rate swaps | ( | ( | |||||||||
| Amounts reclassified from accumulated other comprehensive income to other expense, net for settlement of derivatives | |||||||||||
| Total derivative instruments | ( | ||||||||||
| Other comprehensive income (loss) | ( | ||||||||||
| Comprehensive income | $ | $ | |||||||||
(1)Translation adjustments arising in translating the financial statements of a foreign entity have no effect on the income taxes of that foreign entity. They may, however, affect: (a) the amount, measured in the parent entity's reporting currency, of withholding taxes assessed on dividends paid to the parent entity and (b) the amount of taxes assessed on the parent entity by the government of its country. The Company has determined that the reinvestment of earnings of its foreign subsidiaries are indefinite because of the long-term nature of the Company's foreign investment plans. Therefore, deferred taxes are not provided for on translation adjustments related to non-remitted earnings of the Company's foreign subsidiaries.
(2)See Note 8 - Derivative Instruments and Hedging Activities.
See accompanying notes.
5
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(UNAUDITED—AMOUNTS IN THOUSANDS)
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Total Equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at August 31, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock awards | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Forfeiture of restricted stock awards | ( | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balance at November 30, 2024 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
| Balance at August 31, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Issuance of restricted stock awards | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Forfeiture of restricted stock awards | ( | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balance at November 30, 2025 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
See accompanying notes.
6
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED—AMOUNTS IN THOUSANDS)
| Three Months Ended | |||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||
| Operating Activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Loss on sale of property and equipment | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Equity in losses of unconsolidated affiliates | |||||||||||
| Gain on sale of joint venture | ( | ||||||||||
| Stock-based compensation | |||||||||||
| Change in operating assets and liabilities: | |||||||||||
| Receivables, prepaid expenses and other current assets, non-current assets, accrued salaries and benefits, deferred membership income and other accruals | ( | ( | |||||||||
| Merchandise inventories | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Investing Activities: | |||||||||||
| Additions to property and equipment | ( | ( | |||||||||
| Purchases of short-term investments | ( | ( | |||||||||
| Proceeds from settlements of short-term investments | |||||||||||
| Purchases of long-term investments | ( | ||||||||||
| Proceeds from dissolution of investment in joint venture | |||||||||||
| Proceeds from disposal of property and equipment | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Financing Activities: | |||||||||||
| Proceeds from long-term bank borrowings | |||||||||||
| Repayment of long-term bank borrowings | ( | ( | |||||||||
| Proceeds from short-term bank borrowings | |||||||||||
| Repayment of short-term bank borrowings | ( | ( | |||||||||
| Purchase of treasury stock | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | ( | ||||||||||
| Net increase (decrease) in cash, cash equivalents | ( | ||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
| Supplemental disclosure of noncash investing activities: | |||||||||||
| Capital expenditures accrued, but not yet paid | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for lease liabilities | |||||||||||
7
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
(UNAUDITED—AMOUNTS IN THOUSANDS)
The following table provides a breakdown of cash and cash equivalents, and restricted cash reported within the statement of cash flows:
| Three Months Ended | |||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term restricted cash | |||||||||||
| Long-term restricted cash | |||||||||||
| Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ | $ | |||||||||
See accompanying notes.
8
PRICESMART, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
November 30, 2025
NOTE 1 – COMPANY OVERVIEW AND BASIS OF PRESENTATION
PriceSmart, Inc.’s (“PriceSmart,” the “Company,” “we” or “our”) business consists primarily of international membership shopping warehouse clubs similar to, but typically smaller in size than, warehouse clubs in the United States. As of November 30, 2025, the Company had 56 warehouse clubs in operation in 12 countries and one U.S. territory (ten in Colombia; nine in Costa Rica; seven five in Dominican Republic; four three in Honduras; two one 100 % of the corresponding legal entities (see Note 2 - Summary of Significant Accounting Policies). In addition, the Company plans to open one new warehouse club in La Romana, Dominican Republic in the spring of 2026, one warehouse club in each of Montego Bay and South Camp Road (Kingston), Jamaica in the fall and winter of 2026, respectively, and one warehouse club in Ciudad Quesada, Costa Rica in the fall of 2026. Once these four new clubs are open, the Company will operate 60 warehouse clubs. Our operating segments are the United States, Central America, the Caribbean and Colombia.
PriceSmart continues to invest in technology and talent to support the following three major drivers of growth:
1.Invest in Adding New PriceSmart Locations, Remodeling Current PriceSmart Clubs and Opening More Distribution Centers;
2.Increase Membership Value; and
3.Drive Incremental Sales via PriceSmart.com and Enhanced Digital and Technological Capabilities.
Basis of Presentation – The interim consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q for interim financial reporting pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”).
These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2025 (the “2025 Form 10-K”). The interim consolidated financial statements include the accounts of PriceSmart, Inc., a Delaware corporation, and its subsidiaries. Intercompany transactions between the Company and its subsidiaries have been eliminated in consolidation.
Throughout this Quarterly Report, we refer to various trademarks and trade names that we use in our business. Other trademarks, service marks or trade names referred to in this Quarterly Report are the property of their respective owners.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation – The consolidated financial statements of the Company included herein include the assets, liabilities and results of operations of the Company’s wholly owned subsidiaries and subsidiaries in which it has a controlling interest. The consolidated financial statements also include the Company's investment in, and the Company's share of the income (loss) of, joint ventures recorded under the equity method. All significant inter-company accounts and transactions have been eliminated in consolidation. The consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the SEC and reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary to fairly present the financial position, results of operations and cash flows for the periods presented. The results for interim periods are not necessarily indicative of the results for the year.
The Company determines whether any of the joint ventures in which it has made investments are a Variable Interest Entity (“VIE”) at the start of each new venture and if a reconsideration event has occurred. The Company also considers whether it must consolidate a VIE and/or disclose information about its involvement in a VIE. A reporting entity must consolidate a VIE if that reporting entity has a variable interest (or combination of variable interests) and is determined to be the primary beneficiary. If the Company determines that it is not the primary beneficiary of the VIE, then the Company records its investment in, and the Company's share of the income (loss) of, joint ventures recorded under the equity method.
9
In the first quarter of fiscal year 2026, the Company dissolved its ownership in the GolfPark Plaza, S.A. joint venture. As a result of this dissolution, the Company recognized a gain of approximately $600,000 in Other income (expense) on the consolidated statements of income for the quarter ended November 30, 2025. The Company used a market-based valuation model to determine the fair value of the two plots of land received at $6.4 million. The Company also received cash and other assets of approximately $1.1 million.
Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable. Actual results could differ from those estimates and assumptions.
Restricted Cash – The following table summarizes the restricted cash reported by the Company (in thousands):
| November 30, 2025 | August 31, 2025 | ||||||||||
| Short-term restricted cash | $ | $ | |||||||||
| Long-term restricted cash | |||||||||||
Total restricted cash (1) | $ | $ | |||||||||
(1)Restricted cash consists of cash deposits held within banking institutions in compliance with federal regulatory requirements in Costa Rica and Panama. In addition, the Company is required to maintain certificates of deposit and/or security deposits of Trinidad dollars, as measured in U.S. dollars, of approximately $23.0 million, and certificates of deposit and/or security deposits in U.S. dollars of approximately $12.3 million with a few of its lenders as compensating balances for several U.S. dollar and euro denominated loans payable over several years. The increase in restricted cash compared to the prior year is primarily due to security deposits related to our financing transactions we entered into in the fourth quarter of fiscal year 2025 to provide additional U.S. dollar liquidity to our Trinidad subsidiary. The certificates of deposit will be reduced annually commensurate with the loan balances.
Long-Term Investments – The Company considers certificates of deposit and similar time-based deposits with financial institutions with original maturities over one year to be long-term investments.
Receivables – Receivables consist primarily of credit card receivables and receivables from vendors and are stated net of allowances for credit losses. The determination of the allowance for credit losses is based on the Company’s assessment of collectability along with the consideration of current and expected market conditions that could impact collectability.
10
Tax Receivables – The Company pays Value Added Tax (“VAT”) or similar taxes, income taxes, and other taxes within the normal course of business in most of the countries in which it operates related to the procurement of merchandise and/or services the Company acquires and/or on sales and taxable income. VAT is a form of indirect tax applied to the value added at each stage of production (primary, manufacturing, wholesale, and retail). This tax is similar to, but operates somewhat differently than, sales tax paid in the United States. The Company generally collects VAT from its Members upon sale of goods and services and pays VAT to its vendors upon purchase of goods and services. Periodically, the Company submits VAT reports to governmental agencies and reconciles the VAT paid and VAT received. The net overpaid VAT may be refunded or applied to subsequent returns, and the net underpaid VAT must be remitted to the government. With respect to income taxes paid, if the estimated income taxes paid or withheld exceed the actual income tax due this creates an income tax receivable. In most countries where the Company operates, the governments have implemented additional collection procedures, such as requiring credit card processors to remit a portion of sales processed via credit and debit cards directly to the government as advance payments of VAT and/or income tax. This collection mechanism generally leaves the Company with net VAT and/or income tax receivables, forcing the Company to process significant refund claims on a recurring basis. These refund or offset processes can take anywhere from several months to several years to complete. Additionally, we are occasionally required to make payments under protest for tax assessments that we are appealing, notwithstanding that we believe it is more likely than not we will ultimately prevail.
The Company's various outstanding VAT receivables and/or income tax receivables are based on cases or appeals with their own set of facts and circumstances. The Company consults and evaluates with legal and tax advisors regularly to understand the strength of its legal arguments and probability of successful outcomes in addition to its own experience handling complex tax issues. Based on those evaluations, the Company has not placed any type of allowance on the recoverability of the remaining tax receivables or deferred tax assets because the Company believes that it is more likely than not that it will ultimately succeed in its refund requests.
The Company’s policy for classification and presentation of VAT receivables, income tax receivables and other tax receivables is as follows:
•Short-term VAT and Income tax receivables, recorded as Prepaid expenses and other current assets: This classification is used for any countries where the Company’s subsidiary has generally demonstrated the ability to recover the VAT or income tax receivable within one year. The Company also classifies as short-term any approved refunds or credit notes to the extent that the Company expects to receive the refund or use the credit notes within one year.
•Long-term VAT and Income tax receivables, recorded as Other non-current assets: This classification is used for amounts not approved for refund or credit in countries where the Company’s subsidiary has not demonstrated the ability to obtain refunds within one year and/or for amounts which are subject to outstanding disputes. An allowance is provided against VAT and income tax receivable balances in dispute when the Company does not expect to eventually prevail in its recovery. The Company does not currently have any allowances provided against VAT and income tax receivables.
11
The following table summarizes the VAT receivables reported by the Company (in thousands):
| November 30, 2025 | August 31, 2025 | ||||||||||
| Prepaid expenses and other current assets | $ | $ | |||||||||
| Other non-current assets | |||||||||||
| Total amount of VAT receivables reported | $ | $ | |||||||||
The following table summarizes the income tax receivables reported by the Company (in thousands):
| November 30, 2025 | August 31, 2025 | ||||||||||
| Prepaid expenses and other current assets | $ | $ | |||||||||
| Other non-current assets | |||||||||||
| Total amount of income tax receivables reported | $ | $ | |||||||||
Lease Accounting – The Company’s leases are operating leases for warehouse clubs and non-warehouse club facilities such as corporate headquarters, regional offices, and regional distribution centers. The Company determines if an arrangement is a lease and classifies it as either a finance or operating lease at lease inception. Operating leases are included in Operating lease right-of-use assets, net; Operating lease liabilities, current portion; and Long-term operating lease liabilities on the consolidated balance sheets. The Company does not have finance leases.
Operating lease liabilities are recognized at the commencement date based on the present value of the future minimum lease payments over the lease term. The Company’s leases generally do not have a readily determinable implicit interest rate; therefore, the Company uses a collateralized incremental borrowing rate at the commencement date in determining the present value of future payments. The incremental borrowing rate is based on a yield curve derived from publicly traded bond offerings for companies with credit characteristics that approximate the Company's market risk profile.
In addition, we adjust the incremental borrowing rate for jurisdictional risk derived from quoted interest rates from financial institutions to reflect the cost of borrowing in the Company’s local markets. The Company’s lease terms may include options to purchase, extend or terminate the lease, which are recognized when it is reasonably certain that the Company will exercise that option. The Company does not combine lease and non-lease components.
The Company measures Right-of-use (“ROU”) assets based on the corresponding lease liabilities, adjusted for any initial direct costs and prepaid lease payments made to the lessor before or at the commencement date (net of lease incentives). The lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are not included in the calculation of the ROU asset and the related lease liability and are recognized as incurred. The Company’s variable lease payments generally relate to amounts the Company pays for additional contingent rent based on a contractually stipulated percentage of sales.
Merchandise Inventories – Merchandise inventories, which include merchandise for resale, are valued at the lower of cost (average cost) or net realizable value. The Company provides for estimated inventory losses and obsolescence based on a percentage of sales. The provision is adjusted every reporting period to reflect the trend of actual physical inventory and cycle count results. In addition, the Company may be required to take markdowns below the carrying cost of certain inventory to expedite the sale of such merchandise.
12
Stock Based Compensation – The Company utilizes three types of equity awards: restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”). Compensation cost related to RSAs, RSUs and PSUs is based on the fair market value at the time of the grant. The Company recognizes the compensation cost related to RSAs and RSUs over the requisite service period as determined by the grant, amortized ratably or on a straight-line basis over the life of the grant. The Company also recognizes compensation cost for PSUs over the performance period of each tranche, adjusting this cost based on the Company's estimate of the probability that performance metrics will be achieved.
The Company accounts for actual forfeitures as they occur. The Company records the tax savings resulting from tax deductions in excess of expense for stock-based compensation and the tax deficiency resulting from stock-based compensation in excess of the related tax deduction as income tax expense or benefit. In addition, the Company reflects the tax savings (deficiency) resulting from the taxation of stock-based compensation as an operating cash flow in its consolidated statement of cash flows.
RSAs are outstanding shares of common stock and have the same cash dividend and voting rights as other shares of common stock. Shares of common stock subject to RSUs are not issued nor outstanding until vested, and RSUs do not have the same dividend and voting rights as common stock. However, all outstanding RSUs have accompanying dividend equivalents, requiring payment to the employees and directors with unvested RSUs of amounts equal to the dividend they would have received had the shares of common stock underlying the RSUs been actually issued and outstanding. Payments of dividend equivalents to employees are recorded as compensation expense.
PSUs, similar to RSUs, are awarded with dividend equivalents, subject to achievement of applicable performance criteria.
Fair Value Measurements – The Company measures the fair value for all financial and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring or nonrecurring basis. The fair value of an asset is the price at which the asset could be sold in an orderly transaction between unrelated, knowledgeable and willing parties able to engage in the transaction. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor in a transaction between such parties, not the amount that would be paid to settle the liability with the creditor.
ASC 820, Fair Value Measurements and Disclosures, sets forth a fair value hierarchy that categorizes inputs to valuation techniques used to measure and revalue fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company was not required to revalue any assets or liabilities utilizing Level 1 or Level 3 inputs at the balance sheet dates. The Company's Level 2 assets and liabilities revalued at the balance sheet dates, on a recurring basis, consisted of cash flow hedges (interest rate swaps and cross-currency interest rate swaps) and forward foreign exchange contracts. In addition, the Company utilizes Level 2 inputs in determining the fair value of long-term debt.
Non-financial assets and liabilities are revalued and recognized at fair value subsequent to initial recognition when there is evidence of impairment. For the periods reported, no
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The Company’s current and long-term financial assets and liabilities have fair values that approximate their carrying values. The Company’s long-term financial liabilities consist of long-term debt, which is recorded on the balance sheet at issuance price and adjusted for any applicable unamortized discounts or premiums and debt issuance costs. There have been no significant changes in the fair market value of the Company’s current and long-term financial assets and liabilities, and there have been no material changes to the valuation techniques utilized in the fair value measurement of assets and liabilities disclosed in the Company’s 2025 Annual Report on Form 10-K.
Derivative Instruments and Hedging Activities – The Company uses derivative financial instruments for hedging and non-trading purposes to manage its exposure to changes in interest and currency exchange rates. In using derivative financial instruments for the purpose of hedging the Company’s exposure to interest and currency exchange rate risks, the contractual terms of a hedged instrument closely mirror those of the hedged item and are intended to provide a high degree of risk reduction and correlation. Contracts that are effective at meeting the risk reduction and correlation criteria (effective hedge) are recorded using hedge accounting. If a derivative financial instrument is an effective hedge, changes in the fair value of the instrument will be reported in accumulated other comprehensive loss until the hedged item completes its contractual term. Instruments that do not meet the criteria for hedge accounting, or contracts for which the Company has not elected hedge accounting, are valued at fair value with unrealized gains or losses reported in earnings during the period of the change.
The Company did not change valuation techniques utilized in the fair value measurement of assets and liabilities presented on the Company’s consolidated balance sheets from previous practice during the reporting period. The Company seeks to manage counterparty risk associated with these contracts by limiting transactions to counterparties with which the Company has an established banking relationship. There can be no assurance, however, that this practice effectively mitigates counterparty risk.
Cash Flow Instruments. The Company is a party to receive floating interest rate and pay fixed-rate interest rate swaps to hedge the interest rate risk of certain U.S. dollar-denominated debt within its international subsidiaries. The swaps are designated as cash flow hedges of interest expense risk. These instruments are considered effective hedges and are recorded using hedge accounting. The Company is also a party to receive variable or fixed interest rate and pay fixed interest rate cross-currency interest rate swaps to hedge the interest rate and currency exposure associated with the expected payments of principal and interest of U.S. dollar-denominated debt within its international subsidiaries whose functional currency is other than the U.S. dollar. The swaps are designated as cash flow hedges of the currency risk and interest rate risk related to payments on the U.S. dollar-denominated debt. These instruments are also considered to be effective hedges and are recorded using hedge accounting. Under cash flow hedging, the entire gain or loss of the derivative, calculated as the net present value of the future cash flows, is reported on the consolidated balance sheets in accumulated other comprehensive loss. Amounts recorded in accumulated other comprehensive loss are released to earnings in the same period that the hedged transaction impacts consolidated earnings. Refer to “Note 8 - Derivative Instruments and Hedging Activities” for information on the fair value of interest rate swaps and cross-currency interest rate swaps as of November 30, 2025 and August 31, 2025.
Fair Value Instruments. The Company is exposed to foreign currency exchange rate fluctuations in the normal course of business. This includes exposure to foreign currency exchange rate fluctuations on U.S. dollar-denominated liabilities within the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. The Company manages these fluctuations, in part, through the use of non-deliverable forward foreign-exchange contracts that are intended to offset changes in cash flows attributable to currency exchange movements. The contracts are intended primarily to economically address exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. Currently, these contracts are treated for accounting purposes as fair value instruments and do not qualify for derivative hedge accounting, and as such, the Company does not apply derivative hedge accounting to record these transactions. As a result, these contracts are valued at fair value with unrealized gains or losses reported in earnings during the period of the change. The Company seeks to mitigate foreign currency exchange-rate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features and are limited to less than one year in duration.
Revenue Recognition – The accounting policies and other disclosures such as the disclosure of disaggregated revenues are described in “Note 3 – Revenue Recognition.”
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Cost of Goods Sold – The Company includes the cost of merchandise and food service and bakery raw materials in cost of goods sold - net merchandise sales. The Company also includes in cost of goods sold - net merchandise sales the external and internal distribution and handling costs for supplying merchandise, raw materials and supplies to the warehouse clubs, and, when applicable, costs of shipping to Members. External costs include inbound freight, duties, drayage, fees, insurance, and non-recoverable value-added tax related to inventory shrink, spoilage and damage. Internal costs include payroll and related costs, utilities, consumable supplies, repair and maintenance, rent expense and building and equipment depreciation at the Company's distribution facilities and payroll and other direct costs for in-club demonstrations.
For export sales, the Company includes the cost of merchandise and external and internal distribution and handling costs for supplying merchandise in cost of goods sold - exports.
Selling, General and Administrative – Selling, general and administrative costs consist primarily of expenses associated with operating warehouse clubs and non-income based taxes such as alternative minimum taxes based on revenue or sales. These costs include payroll and related costs, utilities, consumable supplies, repair and maintenance, rent expense, building and equipment depreciation, bank fees, credit card processing fees, and amortization of intangibles. Also included in selling, general and administrative expenses are the payroll and related costs for the Company’s U.S. and regional management and purchasing centers.
Pre-Opening Costs – The Company expenses pre-opening costs (the costs of start-up activities, including organization costs and rent) for new warehouse clubs as incurred.
Asset Impairment and Closure Costs – The Company periodically evaluates its long-lived assets for indicators of impairment. Management's judgments are based on market and operational conditions at the time of the evaluation and can include management's best estimate of future business activity. These periodic evaluations could cause management to conclude that impairment factors exist, requiring an adjustment of these assets to their then-current fair value. Future business conditions and/or activity could differ materially from the projections made by management, causing the need for additional impairment charges.
Loss Contingencies and Litigation – The Company records and reserves for loss contingencies if (a) information available prior to issuance of the consolidated financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the consolidated financial statements and (b) the amount of loss can be reasonably estimated. If one or both criteria for accrual are not met, but there is at least a reasonable possibility that a material loss will occur, the Company does not record and reserve for a loss contingency but describes the contingency within a note and provides detail, when possible, of the estimated potential loss or range of loss. If an estimate cannot be made, a statement to that effect is made.
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Foreign Currency Translation – The assets and liabilities of the Company’s foreign operations are translated to U.S. dollars when the functional currency in the Company’s international subsidiaries is the local currency and not U.S. dollars. Assets and liabilities of these foreign subsidiaries are translated to U.S. dollars at the exchange rate on the balance sheet date, and revenue, costs and expenses are translated at average rates of exchange in effect during the period. The corresponding translation gains and losses are recorded as a component of accumulated other comprehensive income or loss. These adjustments will affect net income upon the sale or liquidation of the underlying investment.
The following table discloses the net effect of translation into the reporting currency on other comprehensive income (loss) for these local currency denominated accounts for the three months ended November 30, 2025 and November 30, 2024 (in thousands):
| Three Months Ended | |||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||
| Effect on other comprehensive income (loss) due to foreign currency restatement | $ | $ | ( | ||||||||
Monetary assets and liabilities denominated in currencies other than the functional currency of the respective entity (primarily U.S. dollars) are revalued to the functional currency using the exchange rate on the balance sheet date. These foreign exchange transaction gains (losses), including transactions recorded involving these monetary assets and liabilities, are recorded as Other income (expense) in the consolidated statements of income (in thousands):
| Three Months Ended | ||||||||||||||
| November 30, 2025 | November 30, 2024 | |||||||||||||
| Currency loss | $ | ( | $ | ( | ||||||||||
Recent Accounting Pronouncements - Not Yet Adopted
FASB ASC 740 ASU 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures. ASU No. 2023-09 focuses on income tax disclosures around effective tax rates and cash income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company expects to adopt ASU No. 2023-09 for our annual reporting for fiscal year 2026. The Company is evaluating the impact on the Company's consolidated financial statements.
FASB ASC 220 ASU 2024-03—Income Statement (Topic 220): Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU No. 2024-04, Disaggregation of Income Statement Expenses. ASU No. 2024-03 requires disaggregated disclosure of income statement expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Company expects to adopt ASU No. 2024-03 for our annual reporting for fiscal year 2028. The Company has not yet completed its assessment of the impact of ASU No. 2024-03 on the Company's consolidated financial statements.
NOTE 3 – REVENUE RECOGNITION
Performance Obligations
The Company identifies each distinct performance obligation to transfer goods (or bundle of goods) or services. The Company recognizes revenue when (or as) it satisfies a performance obligation by transferring control of the goods or services to the customer.
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Net Merchandise Sales. The Company recognizes merchandise sales revenue, net of sales taxes, on transactions where the Company has determined that it is the principal in the sale of merchandise. These transactions may include shipping commitments and/or shipping revenue if the transaction involves delivery to the customer.
Membership Fee Revenue. Membership income represents annual membership fees paid by the Company’s warehouse club Members, which are recognized ratably over the 12 -month term of the membership. Our membership policy allows Members to cancel their membership in the first 60 days and receive a full refund. After the 60 -day period, membership refunds are prorated over the remaining term of the membership. The Company has significant experience with membership refund patterns and expects membership refunds will not be material. Therefore, no refund reserve was required for the periods presented. Membership fee revenue is included in membership income in the Company's consolidated statements of income. The deferred membership fee is included in deferred income in the Company's consolidated balance sheets.
Platinum Points Reward Programs. The Company currently offers Platinum Memberships in all of its markets. The Platinum Membership provides Members with a 2 % rebate on most items, up to an annual maximum of $500 . The rebate is issued annually to Platinum Members on March 1 and expires August 31. Platinum Members can apply this rebate to future purchases at the warehouse club during the redemption period. The Company records this 2 % rebate as a reduction of revenue at the time of the sales transaction. Accordingly, the Company has reduced warehouse sales and has accrued a liability within other accrued expenses and other current liabilities. The Company has determined that breakage revenue is 5 % of the awards issued; therefore, it records 95 % of the Platinum Membership liability at the time of sale. Annually, the Company reviews for expired unused rebates outstanding, and the expired unused rebates are recognized as Other revenue and income on the consolidated statements of income.
Co-branded Credit Card Points Reward Programs. Most of the Company’s subsidiaries have points reward programs related to co-branded credit cards. These points reward programs provide incremental points that a Member can use at a future time to acquire merchandise within the Company’s warehouse clubs. This results in two performance obligations, the first performance obligation being the initial sale of the merchandise or services purchased with the co-branded credit card and the second performance obligation being the future use of the points rewards to purchase merchandise or services. As a result, upon the initial sale, the Company allocates the transaction price to each performance obligation with the amount allocated to the future use points rewards recorded as a contract liability within other accrued expenses and other current liabilities on the consolidated balance sheet. The portion of the selling price allocated to the reward points is recognized as Net merchandise sales when the points are used or when the points expire. The Company reviews on an annual basis expired points rewards outstanding, and the expired rewards are recognized as Net merchandise sales on the consolidated statements of income within markets where the co-branded credit card agreement allows for such treatment.
Gift Cards. Members’ purchases of gift cards to be utilized at the Company's warehouse clubs are not recognized as sales until the card is redeemed and the customer purchases merchandise using the gift card. The outstanding gift cards are reflected as other accrued expenses and other current liabilities in the consolidated balance sheets. These gift cards generally have a one-year stated expiration date from the date of issuance and are generally redeemed prior to expiration. However, the absence of a large volume of transactions for gift cards impairs the Company's ability to make a reasonable estimate of the redemption levels for gift cards; therefore, the Company assumes a 100 % redemption rate prior to expiration of the gift cards. The Company periodically reviews unredeemed outstanding gift cards, and the gift cards that have expired are recognized as Other revenue and income on the consolidated statements of income.
Co-branded Credit Card Revenue Sharing Agreements. As part of the co-branded credit card agreements that the Company has entered into with financial institutions within its markets, the Company often enters into revenue sharing agreements. As part of these agreements, in some countries, the Company receives a portion of the interest income generated from the average outstanding balances on the co-branded credit cards from these financial institutions (“interest generating portfolio” or “IGP”). The Company recognizes its portion of interest received as revenue during the period it is earned. The Company has determined that this revenue should be recognized as “Other revenue and income” on the consolidated statements of income.
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Contract Performance Liabilities
Contract performance liabilities as a result of transactions with customers primarily consist of deferred membership income, other deferred income, deferred gift card revenue, Platinum points programs, and liabilities related to co-branded credit card points rewards programs which are included in deferred income and other accrued expenses and other current liabilities in the Company’s consolidated balance sheets. The following table provides these contract balances from transactions with customers as of the dates listed (in thousands):
| Contract Liabilities | |||||||||||
| November 30, 2025 | August 31, 2025 | ||||||||||
| Deferred membership income | $ | $ | |||||||||
| Other contract performance liabilities | $ | $ | |||||||||
Disaggregated Revenues
In the following table, net merchandise sales are disaggregated by merchandise category (in thousands):
Three Months Ended | |||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||
| Foods & Sundries | $ | $ | |||||||||
| Fresh Foods | |||||||||||
Hardlines | |||||||||||
Softlines | |||||||||||
Food Service and Bakery | |||||||||||
Health Services | |||||||||||
| Net Merchandise Sales | $ | $ | |||||||||
NOTE 4 – EARNINGS PER SHARE
The Company presents basic net income per share using the two-class method. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders and that determines basic net income per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings that would have been available to common stockholders. A participating security is defined as a security that may participate in undistributed earnings with common stock. The Company’s capital structure includes securities that participate with common stock on a one-for-one basis for distribution of dividends. These are the restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”) issued pursuant to the 2013 Equity Incentive Award Plan, provided that the Company does not include PSUs as participating securities until the performance conditions have been met. RSAs are outstanding shares of common stock and have the same cash dividend and voting rights as other shares of common stock. Shares of common stock subject to RSUs are not issued nor outstanding until vested, and RSUs do not have the same dividend and voting rights as common stock. However, all outstanding RSUs have accompanying dividend equivalents, requiring payment to the employees and directors with unvested RSUs of amounts equal to the dividend they would have received had the shares of common stock underlying the RSUs been actually issued and outstanding. PSUs, similar to RSUs, are awarded with dividend equivalents, provided that such amounts become payable only if the performance criteria are achieved. At the time the Compensation Committee confirms the performance criteria have been achieved, the corresponding dividend equivalents are paid on the PSUs. The Company determines the diluted net income per share by using the more dilutive of the two class-method or the treasury stock method and by including the basic weighted average of outstanding performance stock units in the calculation of diluted net income per share under the two-class method and including all potential common shares assumed issued in the calculation of diluted net income per share under the treasury stock method.
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The following table sets forth the computation of net income per share for the three months ended November 30, 2025 and November 30, 2024 (in thousands, except per share amounts):
| Three Months Ended | |||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||
Net income | $ | $ | |||||||||
| Less: Allocation of income to unvested stockholders | ( | ( | |||||||||
| Net income available for distribution | $ | $ | |||||||||
| Basic weighted average shares outstanding | |||||||||||
| Add dilutive effect of performance stock units (two-class method) | |||||||||||
| Diluted average shares outstanding | |||||||||||
| Basic net income per share | $ | $ | |||||||||
| Diluted net income per share | $ | $ | |||||||||
NOTE 5 – STOCKHOLDERS’ EQUITY
Dividends
| First Payment | Second Payment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Declared | Amount | Record Date | Date Paid | Amount | Record Date | Date Paid | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/6/2025 | $ | 2/18/2025 | 2/28/2025 | $ | 8/15/2025 | 8/29/2025 | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||
On February 6, 2025, the Company’s Board of Directors declared an annual cash dividend in the total amount of $1.26 per share, with $0.63 per share paid on February 28, 2025 to stockholders of record as of February 18, 2025 and $0.63 per share paid on August 29, 2025 to stockholders of record as of August 15, 2025. The declaration of future dividends (ongoing or otherwise), if any, the amount of such dividends, and the establishment of record and payment dates is subject to final determination by the Board of Directors at its discretion after its review of the Company’s financial performance and anticipated capital requirements, taking into account the uncertain macroeconomic conditions on our results of operations and cash flows.
Other Comprehensive Income (Loss) and Accumulated Other Comprehensive Loss
The following tables disclose the effects on accumulated other comprehensive loss of each component of other comprehensive income (loss), net of tax (in thousands):
Amount | |||||||||||||||||
| Beginning balance, September 1, 2025 | $ | ( | |||||||||||||||
| Foreign currency translation adjustments | |||||||||||||||||
Defined benefit pension plans (1) | |||||||||||||||||
Derivative instruments (2) | |||||||||||||||||
| Ending balance, November 30, 2025 | $ | ( | |||||||||||||||
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| Amount | |||||||||||||||||
| Beginning balance, September 1, 2024 | $ | ( | |||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||
Defined benefit pension plans (1) | |||||||||||||||||
Derivative instruments (2) | ( | ||||||||||||||||
| Ending balance, November 30, 2024 | $ | ( | |||||||||||||||
| Amount | |||||||||||||||||
| Beginning balance, September 1, 2024 | $ | ( | |||||||||||||||
| Foreign currency translation adjustments | |||||||||||||||||
Defined benefit pension plans (1) | |||||||||||||||||
Derivative instruments (2) | ( | ||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | |||||||||||||||||
| Ending balance, August 31, 2025 | $ | ( | |||||||||||||||
(1)Amounts reclassified from accumulated other comprehensive loss related to the minimum pension liability are included in warehouse club and other operations in the Company's consolidated statements of income.
(2)Refer to "Note 8 - Derivative Instruments and Hedging Activities."
Retained Earnings Not Available for Distribution
The following table summarizes retained earnings designated as legal reserves of various subsidiaries which cannot be distributed as dividends to PriceSmart, Inc. according to applicable statutory regulations (in thousands):
| November 30, 2025 | August 31, 2025 | ||||||||||
Retained earnings not available for distribution | $ | $ | |||||||||
NOTE 6 – COMMITMENTS AND CONTINGENCIES
Legal Proceedings
From time to time, the Company and its subsidiaries are subject to legal proceedings, claims and litigation arising in the ordinary course of business related to the Company’s operations and property ownership. The Company evaluates such matters on a case-by-case basis and vigorously contests any such legal proceedings or claims which the Company believes are without merit. The Company believes that the final disposition of these matters will not have a material adverse effect on its financial position, results of operations or liquidity. It is possible, however, that the Company's results of operations for a particular quarter or fiscal year could be impacted by changes in circumstances relating to such matters.
The Company establishes an accrual for legal proceedings if and when those matters reach a stage where they present loss contingencies that are both probable and reasonably estimable. In such cases, there may be a possible exposure to loss in excess of any amounts accrued. The Company monitors those matters for developments that would affect the likelihood of a loss and the accrued amount, if any, thereof, and adjusts the amount as appropriate. If the loss contingency at issue is not both probable and reasonably estimable, the Company does not establish an accrual but will continue to monitor the matter for developments that will make the loss contingency both probable and reasonably estimable. If it is at least a reasonable possibility that a material loss will occur, the Company will provide disclosure regarding the contingency.
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Income and Non-Income Taxes
For interim reporting, we estimate an annual effective tax rate (AETR) to calculate income tax expense. Our income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best estimate of current and future taxes to be paid.
We are required to file federal and state income tax returns in the United States and income tax and various other tax returns in multiple foreign jurisdictions, each with changing tax laws, regulations and administrative positions. This requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. We record the benefits of uncertain tax positions in our financial statements only after determining it is more likely than not the uncertain tax positions would sustain challenge by taxing authorities, including resolution of related appeals or litigation processes, if any. We develop our assessment of an uncertain tax position based on the specific facts and legal arguments of each case and the associated probability of our reporting position being upheld, using internal expertise and the advice of third-party experts. However, our tax returns are subject to routine reviews by the various taxing authorities in the jurisdictions in which we file our tax returns. As part of these reviews, taxing authorities may challenge, and in some cases presently are challenging, the interpretations we have used to calculate our tax liability. In addition, any settlement with the tax authority or the outcome of any appeal or litigation process might result, and in some cases has resulted, in an outcome that is materially different from our estimated liability. When facts and circumstances change, we reassess these probabilities and record any changes in the consolidated financial statements as appropriate. Variations in the actual outcome of these cases could materially impact our consolidated financial statements.
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, we begin with historical results and incorporate assumptions about the amount of future state, federal, and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income.
The Company accrues an amount for its estimate of probable additional income tax liability. In certain cases, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than 50% likelihood of being sustained.
In evaluating the exposure associated with various non-income tax filing positions, the Company accrues for probable and estimable exposures for non-income tax-related tax contingencies. As of November 30, 2025 and August 31, 2025, the Company has recorded within other accrued expenses and other current liabilities a total of $1.1 million, for various non-income tax-related tax contingencies.
Minimum tax rules applicable in some of the countries where the Company operates require the Company to pay taxes based on a percentage of sales if the resulting tax were greater than the tax payable based on a percentage of income (Alternative Minimum Tax or "AMT"). This can result in AMT payments substantially in excess of those the Company would expect to pay based on taxable income. As the Company believes that, in one country where it operates, it should ultimately only be liable for an income-based tax, it has accumulated income tax receivables of $10.4 million and $10.5 million and deferred tax assets of $4.3 million and $3.9 million as of November 30, 2025 and August 31, 2025, respectively, in this country.
While the Company believes the recorded liabilities are adequate, there are inherent limitations in projecting the outcome of litigation, in estimating probable additional income tax liability taking into account uncertain tax positions, and in evaluating the probable additional tax associated with various non-income tax filing positions. As such, the Company is unable to make a reasonable estimate of the sensitivity to change of estimates affecting its recorded liabilities. As additional information becomes available, the Company assesses the potential liability and revises its estimates as appropriate.
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Other Commitments
The Company is committed to non-cancelable construction service obligations for various warehouse club developments and expansions. As of November 30, 2025 and August 31, 2025, the Company had approximately $8.5 million and $11.5 million, respectively, in contractual obligations for construction services not yet rendered.
As of November 30, 2025, the Company has signed two lease agreements for which the lease term has not yet commenced. The first agreement relates to the relocation of the Company’s warehouse club in Miraflores, Guatemala. As part of the agreement, the landlord has agreed to build a shell building, which is estimated to be delivered in the first half of calendar year 2027. Upon delivery of the building, the Company expects to use approximately $12.1 million in cash to outfit the club. The lease will have an initial term of approximately 20 years, with a 5 -year renewal option, and will commence upon delivery of the shell building to the Company. Per the lease agreement, the Company will pay monthly fixed base rent payments, which increase annually based on the Consumer Price Index. The Company will also pay variable rent payments if the yearly warehouse sales for the location are in excess of a certain threshold.
Additionally, the Company signed an agreement to lease a parcel of land on South Camp Road in Kingston, Jamaica for the construction of a warehouse club. The Company expects to use approximately $27.6 million in cash to construct the club. The lease will have an initial term of approximately 30 years, with two 10 -year renewal options, and will begin at the earlier of (i) 15 months after the commencement date of the lease or (ii) the date the PriceSmart club opens to the public. Under the terms of the lease, the Company will make monthly fixed base rent payments that increase annually by 2.75 %.
A collateralized incremental borrowing rate was used to determine the present value of estimated future minimum lease commitments. The present value of estimated future minimum lease commitments for these two leases are as follows (in thousands):
| Twelve Months Ended November 30, | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total future lease payments | $ | |||||||
From time to time, the Company has entered into general land purchase and land purchase option agreements. The Company’s land purchase agreements are typically subject to various conditions, including, but not limited to, the ability to obtain necessary governmental permits or approvals. A deposit under an agreement is typically returned to the Company if all permits or approvals are not obtained. Generally, the Company has the right to cancel any of its agreements to purchase land without cause by forfeiture of some or all of the deposits it has made pursuant to the agreement. As of November 30, 2025, the Company had entered into three land purchase agreements that, if completed, would result in the use of approximately $13.9 million in cash.
In the first quarter of fiscal year 2026, the Company dissolved its ownership in the GolfPark Plaza, S.A. joint venture. Refer to “Note 2 - Summary of Significant Accounting Policies” for additional information regarding the dissolution.
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The table below summarizes the Company’s interest in a real estate joint venture as of November 30, 2025 (in thousands):
| Entity | % Ownership | Initial Investment | Additional Investments | Net Loss Inception to Date | Dissolution of Joint Venture (1) | Company’s Variable Interest in Entity | Commitment to Future Additional Investments | Company's Maximum Exposure to Loss in Entity | ||||||||||||||||||||||||||||||||||||||||||
| GolfPark Plaza, S.A. | % | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
(1)In the first quarter of fiscal year 2026, the Company dissolved its joint venture in GolfPark Plaza, S.A.
NOTE 7 – DEBT
Short-term borrowings consist of unsecured lines of credit and short-term overdraft borrowings. The following table summarizes the balances of total facilities, facilities used and facilities available (in thousands):
| Facilities Used | |||||||||||||||||||||||||||||
Total Amount of Facilities | Short-term Borrowings | Letters of Credit | Facilities Available | Weighted average interest rate | |||||||||||||||||||||||||
| November 30, 2025 - Committed | $ | $ | $ | $ | % | ||||||||||||||||||||||||
| November 30, 2025 - Uncommitted | |||||||||||||||||||||||||||||
| November 30, 2025 - Total | $ | $ | $ | $ | |||||||||||||||||||||||||
| August 31, 2025 - Committed | $ | $ | $ | $ | % | ||||||||||||||||||||||||
| August 31, 2025 - Uncommitted | |||||||||||||||||||||||||||||
| August 31, 2025 - Total | $ | $ | $ | $ | % | ||||||||||||||||||||||||
As of November 30, 2025 and August 31, 2025, the Company was in compliance with all covenants or amended covenants for each of its short-term facility agreements. These facilities generally expire annually or bi-annually and are normally renewed. One of these facilities is a committed credit agreement with one bank for $75.0 million. In exchange for the bank’s commitment to fund any drawdowns the Company requests, the Company pays an annual commitment fee of 0.25 %, payable quarterly, on any unused portion of this facility. Additionally, the Company has uncommitted facilities in most of the countries where it operates, with drawdown requests subject to approval by the individual banks each time a drawdown is requested.
The following table provides the changes in long-term debt for the three months ended November 30, 2025:
| (Amounts in thousands) | Current portion of long-term debt | Long-term debt (net of current portion) | Total | |||||||||||||||||
| Balances as of August 31, 2025 | $ | $ | $ | (1) | ||||||||||||||||
Repayments of long-term debt | ( | ( | ( | |||||||||||||||||
| Reclassifications of long-term debt due in the next 12 months | ( | |||||||||||||||||||
Translation adjustments on foreign currency debt of subsidiaries whose functional currency is not the U.S. dollar (2) | ( | ( | ( | |||||||||||||||||
| Balances as of November 30, 2025 | $ | $ | $ | (3) | ||||||||||||||||
(1)The carrying amount of non-cash assets assigned as collateral for these loans was $185.6 million. The carrying amount of cash assets assigned as collateral for these loans was $26.5
23
(2)These foreign currency translation adjustments are recorded within other comprehensive income.
(3)The carrying amount of non-cash assets assigned as collateral for these loans was $171.1 million. The carrying amount of cash assets assigned as collateral for these loans was $34.1 million.
As of November 30, 2025 and August 31, 2025, the Company had approximately $73.5 million and $78.1 million, respectively, of long-term loans held in the U.S. entity and in several foreign subsidiaries, which require these entities to comply with certain annual or quarterly financial covenants, which include debt service and leverage ratios. The Company was in compliance with all covenants or amended covenants for both periods.
Annual maturities of long-term debt are as follows (in thousands):
| Twelve Months Ended November 30, | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
NOTE 8 – DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company is exposed to interest rate risk relating to its ongoing business operations. To manage interest rate exposure, the Company enters into hedge transactions (interest rate swaps) using derivative financial instruments. The objective of entering into interest rate swaps is to eliminate the variability of cash flows in the Secured Overnight Financing Rate ("SOFR") interest payments associated with variable-rate loans over the life of the loans. As changes in interest rates impact the future cash flow of interest payments, the hedges provide a synthetic offset to interest rate movements.
In addition, the Company is exposed to foreign currency and interest rate cash flow exposure related to non-functional currency long-term debt of one of its wholly owned subsidiaries. To manage this foreign currency and interest rate cash flow exposure, some of the Company’s subsidiaries have entered into cross-currency interest rate swaps that convert their U.S. dollar-denominated floating interest payments to functional currency fixed interest payments during the life of the hedging instrument. As changes in foreign exchange and interest rates impact the future cash flow of interest payments, the hedges are intended to offset changes in cash flows attributable to interest rate and foreign exchange movements.
These derivative instruments (cash flow hedging instruments) are designated and qualify as cash flow hedges, with the entire gain or loss on the derivative reported as a component of other comprehensive income (loss). Amounts are deferred in other comprehensive income (loss) and reclassified into earnings in the same income statement line item that is used to present the earnings effect of the hedged item when the hedged item affects earnings.
The Company is exposed to foreign currency exchange rate fluctuations in the normal course of business, including foreign-currency exchange-rate fluctuations on U.S. dollar denominated liabilities within its international subsidiaries whose functional currency is other than the U.S. dollar. The Company manages these fluctuations, in part, through the use of non-deliverable forward foreign-exchange contracts (NDFs) that are intended to offset changes in cash flow attributable to currency exchange movements. These contracts are intended primarily to economically address exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar. Currently, these contracts do not qualify for derivative hedge accounting. The Company seeks to mitigate foreign-currency exchange-rate risk with the use of these contracts and does not intend to engage in speculative transactions. These contracts do not contain any credit-risk-related contingent features.
24
Cash Flow Hedges
As of November 30, 2025, all of the Company’s interest rate swap and cross-currency interest rate swap derivative financial instruments are designated and qualify as cash flow hedges. The Company formally documents the hedging relationships for its derivative instruments that qualify for hedge accounting.
The following table summarizes agreements for which the Company has recorded cash flow hedge accounting for the three months ended November 30, 2025:
| Entity | Date Entered into | Derivative Financial Counter- party | Derivative Financial Instruments | Initial US$ Notional Amount | US$ Loan Held With | Floating Leg (swap counter-party) | Fixed Rate for PSMT Subsidiary | Settlement Dates | Effective Period of swap | |||||||||||||||||||||||||||||||||||||||||||||||
| Colombia subsidiary | 25-Nov-24 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | PriceSmart, Inc. | % | 27th day of each November, February, May and August beginning on February 27, 2025 | November 27, 2024 - November 27, 2027 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia subsidiary | 15-Nov-24 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | PriceSmart, Inc. | % | 17th day of each February, May, August and November beginning on February 18, 2025 | November 18, 2024 - November 17, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia subsidiary | 19-Sep-24 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | PriceSmart, Inc. | % | 24th day of each September, December, March and June beginning on December 24, 2024 | September 24, 2024 - September 24, 2029 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia subsidiary | 30-Nov-23 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | PriceSmart, Inc. | % | 30th day of each November, May, August and 28th day of each February (except in case of a leap year, 29th day of each February) beginning on February 29, 2024 | November 30, 2023 - November 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia subsidiary | 12-Apr-23 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | PriceSmart, Inc. | % | 11th day of each July, October, January and April, beginning on July 11, 2023 | April 12, 2023 - April 11, 2028 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Colombia subsidiary | 3-May-22 | Citibank, N.A. ("Citi") | Cross currency interest rate swap | $ | PriceSmart, Inc. | % | 3rd day of each May, August, November and February, beginning on August 3, 2022 | May 3, 2022 - May 3, 2027 | ||||||||||||||||||||||||||||||||||||||||||||||||
| SD Property Managers, LLC | 16-Jun-25 | Fifth Third Bank, National Association | Interest rate swap | $ | Fifth Third Bank, National Association | Variable rate 1-month SOFR | % | 1st day of each month beginning on July 1, 2025 | Jun 16, 2025 - June 16, 2035 | |||||||||||||||||||||||||||||||||||||||||||||||
| Panama subsidiary | 11-Jul-24 | Bank of Nova Scotia ("Scotiabank") | Interest rate swap | $ | Bank of Nova Scotia | 3-month SOFR with a | % | 1st day of each March, June, September and December beginning June 3, 2024 | February 29, 2024 - March 1, 2029 | |||||||||||||||||||||||||||||||||||||||||||||||
| PriceSmart, Inc. | 7-Nov-16 | U.S. Bank, N.A. ("U.S. Bank") successor to Union Bank, N.A. | Interest rate swap | $ | U.S. Bank | Variable rate 3-month SOFR plus | % | 1st day of each month beginning on April 1, 2017 | March 1, 2017 - March 1, 2027 | |||||||||||||||||||||||||||||||||||||||||||||||
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For the three months ended November 30, 2025 and November 30, 2024, the Company included the gain or loss on the hedged items (that is, variable-rate borrowings) in the same line item—interest expense—as the offsetting gain or loss on the related interest rate swaps as follows (in thousands):
| Income Statement Classification | Cost of swaps (2) | Total | ||||||||||||||||||
| Interest expense for the three months ended November 30, 2025 | $ | $ | $ | |||||||||||||||||
| Interest expense for the three months ended November 30, 2024 | $ | $ | $ | |||||||||||||||||
(1)This amount is representative of the interest expense recognized on the underlying hedged transactions.
(2)This amount is representative of the interest expense recognized on the interest rate swaps and cross-currency swaps designated as cash flow hedging instruments.
The total notional balance of the Company’s pay-fixed/receive-variable interest rate swaps and cross-currency interest rate swaps was as follows (in thousands):
| Notional Amount as of | ||||||||||||||
Floating Rate Payer (Swap Counterparty) | November 30, 2025 | August 31, 2025 | ||||||||||||
| U.S. Bank | $ | $ | ||||||||||||
| Fifth Third Bank, National Association | ||||||||||||||
| Citibank N.A. | ||||||||||||||
| Scotiabank | ||||||||||||||
| Total | $ | $ | ||||||||||||
Derivatives listed on the table below were designated as cash flow hedging instruments. The table summarizes the effect of the fair value of interest rate swap and cross-currency interest rate swap derivative instruments that qualify for derivative hedge accounting and its associated tax effect on accumulated other comprehensive income/(loss) (in thousands):
| November 30, 2025 | August 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Derivatives designated as cash flow hedging instruments | Balance Sheet Classification | Fair Value | Net Tax Effect | Net OCI | Fair Value | Net Tax Effect | Net OCI | |||||||||||||||||||||||||||||||||||||
| Cross-currency interest rate swaps | $ | ( | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||
| Cross-currency interest rate swaps | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Interest rate swaps | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Interest rate swaps | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Net fair value of derivatives designated as hedging instruments | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||
26
Fair Value Instruments
From time to time the Company enters into non-deliverable forward foreign-exchange contracts. These contracts are treated for accounting purposes as fair value contracts and do not qualify for derivative hedge accounting. The use of non-deliverable forward foreign-exchange contracts is intended to offset changes in cash flow attributable to currency exchange movements. These contracts are intended primarily to economically hedge exposure to U.S. dollar merchandise inventory expenditures made by the Company’s international subsidiaries whose functional currency is other than the U.S. dollar.
The following table summarizes the non-deliverable forward foreign exchange contracts that are open as of November 30, 2025:
| Financial Derivative (Counterparty) | Subsidiary | Dates Entered into (Range) | Derivative Financial Instrument | Total Notional Amounts (in thousands) | Settlement Dates (Range) | |||||||||||||||||||||||||||
| Citibank, N.A. ("Citi") | Colombia | 20-May-2025 - 21-Nov-2025 | Forward foreign exchange contracts (USD) | $ | 19-Dec-2025 - 22-May-2026 | |||||||||||||||||||||||||||
Forward derivative gains and (losses) on non-deliverable forward foreign-exchange contracts are included in Other income (expense), net, in the consolidated statements of income in the period of change, but the amounts were immaterial for the three month periods ended November 30, 2025 and November 30, 2024.
NOTE 9 – SEGMENTS
The Company and its subsidiaries are principally engaged in the international operation of membership shopping in 56 warehouse clubs located in 12 countries and one U.S. territory that are located in Central America, the Caribbean and Colombia. In addition, the Company operates distribution centers and corporate offices in the United States. The Company has aggregated its warehouse clubs, distribution centers and corporate offices into reportable segments. The Company’s reportable segments are based on management’s organization of these locations into operating segments by general geographic location, which are used by management in setting up management lines of responsibility, providing support services, and making operational decisions and assessments of financial performance. Segment amounts are presented after converting to U.S. dollars and consolidating eliminations. Certain revenues, operating costs and inter-company charges included in the United States segment are not allocated to the segments within this presentation, as it is impractical to do so, and they appear as reconciling items to reflect the amount eliminated on consolidation of intersegment transactions. From time to time, the Company revises the measurement of each segment's operating income and net income, including certain corporate overhead allocations, and other measures as determined by the information regularly reviewed by management. When the Company does so, the previous period amounts and balances are reclassified to conform to the current period's presentation.
The group composed of the Company’s (i) Chief Executive Officer, (ii) Chief Operating Officer, and (iii) Chief Financial Officer functions as the Company’s Chief Operating Decision Maker ("CODM"). The Company’s CODM manages business operations and evaluates the performance of each segment based on the operating income (loss) of the segment and net income. The CODM considers actual performance relative to expectations, and growth potential to determine the appropriate allocation of resources to each segment.
27
The following tables summarize by segment certain revenues, significant expense categories, operating costs and balance sheet items regularly provided to the CODM, (in thousands):
| United States Operations | Central American Operations | Caribbean Operations (1) | Colombia Operations | Reconciling Items (2) | Total | |||||||||||||||||||||||||||||||||
Three Months Ended November 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Intersegment revenues | ( | — | ||||||||||||||||||||||||||||||||||||
Total revenues | ( | |||||||||||||||||||||||||||||||||||||
Less (3): | ||||||||||||||||||||||||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||||||||||||||||||||
| Intersegment cost of goods sold | ( | — | ||||||||||||||||||||||||||||||||||||
| Warehouse club and other operations | ||||||||||||||||||||||||||||||||||||||
General and administrative (4) | ||||||||||||||||||||||||||||||||||||||
| Intersegment reimbursement of expenses | ( | — | ||||||||||||||||||||||||||||||||||||
Operating income (loss) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Interest income from external sources | ||||||||||||||||||||||||||||||||||||||
| Interest income from intersegment sources | ( | — | ||||||||||||||||||||||||||||||||||||
| Interest expense from external sources | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
| Interest expense from intersegment sources | ( | ( | ( | ( | — | |||||||||||||||||||||||||||||||||
| Provision for income taxes | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
Other segment items (5) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Net income (loss) | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Depreciation, property and equipment | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
| Long-lived assets (other than deferred tax assets) | ||||||||||||||||||||||||||||||||||||||
| Goodwill | ||||||||||||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||||||||||||
| Capital expenditures, net | ||||||||||||||||||||||||||||||||||||||
Three Months Ended November 30, 2024 | ||||||||||||||||||||||||||||||||||||||
| Revenue from external customers | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Intersegment revenues | ( | — | ||||||||||||||||||||||||||||||||||||
Total revenues | ( | |||||||||||||||||||||||||||||||||||||
Less (3): | ||||||||||||||||||||||||||||||||||||||
| Cost of goods sold | ||||||||||||||||||||||||||||||||||||||
| Intersegment cost of goods sold | ( | — | ||||||||||||||||||||||||||||||||||||
| Warehouse club and other operations | ||||||||||||||||||||||||||||||||||||||
General and administrative (4) | ||||||||||||||||||||||||||||||||||||||
| Intersegment reimbursement of expenses | ( | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Interest income from external sources | ||||||||||||||||||||||||||||||||||||||
| Interest income from intersegment sources | ( | — | ||||||||||||||||||||||||||||||||||||
| Interest expense from external sources | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
| Interest expense from intersegment sources | ( | ( | ( | ( | — | |||||||||||||||||||||||||||||||||
| Provision for income taxes | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Other segment items (5) | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Depreciation, property and equipment | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||
| Long-lived assets (other than deferred tax assets) | ||||||||||||||||||||||||||||||||||||||
28
| Goodwill | ||||||||||||||||||||||||||||||||||||||
| Investment in unconsolidated affiliates | ||||||||||||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||||||||||||
| Capital expenditures, net | ||||||||||||||||||||||||||||||||||||||
| As of August 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Long-lived assets (other than deferred tax assets) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Goodwill | ||||||||||||||||||||||||||||||||||||||
Investment in unconsolidated affiliates | ||||||||||||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||||||||||||
(1)Management considers its club in the U.S. Virgin Islands to be part of its Caribbean operations.
(2)The reconciling items reflect the amount eliminated on consolidation of intersegment transactions.
(3)The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
(4)General and administrative expenses include pre-opening expenses and loss on disposal of assets.
NOTE 10 – SUBSEQUENT EVENTS
The Company has evaluated all events subsequent to the balance sheet date as of November 30, 2025 through the date of issuance of these consolidated financial statements and has determined that there are no subsequent events that require disclosure.
29
PRICESMART, INC.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements concerning PriceSmart, Inc.'s ("PriceSmart", the "Company", "we" or "our") anticipated future revenues and earnings, adequacy of future cash flows, digital and technological 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 the risks detailed in the Annual Report on Form 10-K for the fiscal year ended August 31, 2025 filed with the United States Securities and Exchange Commission (“SEC”) on October 30, 2025 under the heading “Part I. Item 1A. Risk Factors" and "Part I Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements speak only as of the date they are made, and we do not undertake to update these statements, except as required by law. In addition, these risks are not the only risks that the Company faces. The Company could also be affected by additional factors that apply to all companies operating globally and in the U.S., as well as other risks that are not presently known to the Company or that the Company currently considers to be immaterial.
Overview
PriceSmart was founded in 1996 by Sol and Robert Price, the creators of Price Club, the original warehouse club operator. The objective of PriceSmart is to operate its warehouse club business in Central America, the Caribbean and South America at operating standards as good as, or superior to, warehouse club operations in the United States.
As of November 30, 2025, we had 56 warehouse clubs in operation in Central America, the Caribbean and Colombia. In addition, we are continuing to advance our planned expansion into Chile, which we believe is a promising new market for our Company. We believe PriceSmart has become one of the most respected and trusted brands in the countries where we operate, and with over two million membership accounts, and over four million cardholders, we believe PriceSmart is an essential part of the shopping experience for consumers and small businesses in PriceSmart’s markets.
PriceSmart sources approximately half of its merchandise from suppliers within Latin America and the Caribbean, with the balance of merchandise sourced throughout the rest of the world. Product selection includes basic consumable merchandise for consumers and businesses, “Member’s Selection®” private label merchandise and consumable and non-consumable products that are often not otherwise available in our markets.
PriceSmart continually focuses on innovation. Beyond in-club shopping, our Members can shop via our mobile app or online at PriceSmart.com, both of which offer home delivery and curbside pickup via our Click & Go® service. PriceSmart is making significant investments in technology both to improve the online shopping experience for its Members and to enhance operating efficiencies in its supply chain and the back office.
We seek to be an outstanding place to work and provide safe and pleasant working environments for our almost 13,000 employees, along with excellent pay and benefits, including healthcare coverage and retirement benefits.
PriceSmart is committed to improving the quality of life for people living in the communities in which it does business. Through a partnership with Price Philanthropies Foundation’s Aprender y Crecer program, we provide school supplies to approximately 140,000 children, and vision screening and eye exams for thousands of children. In addition, the PriceSmart Foundation makes grants to support youth workforce development and small business growth in PriceSmart markets.
We believe that operating our business at the highest standards, providing outstanding jobs for our employees and being good stewards of the communities in which we operate result in PriceSmart being a good investment for our stockholders.
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The number of warehouse clubs for each country or territory were as follows:
Country/Territory (1) | Number of Warehouse Clubs in Operation as of November 30, 2024 | Number of Warehouse Clubs in Operation as of November 30, 2025 | Anticipated Warehouse Club Openings in Fiscal Year 2026 | Anticipated Warehouse Club Openings in Fiscal Year 2027 | ||||||||||||||||||||||||||||
| Colombia | 10 | 10 | — | — | ||||||||||||||||||||||||||||
| Costa Rica | 8 | 9 | — | 1 | ||||||||||||||||||||||||||||
| Panama | 7 | 7 | — | — | ||||||||||||||||||||||||||||
| Guatemala | 6 | 7 | — | — | ||||||||||||||||||||||||||||
| Dominican Republic | 5 | 5 | 1 | — | ||||||||||||||||||||||||||||
| Trinidad | 4 | 4 | — | — | ||||||||||||||||||||||||||||
| El Salvador | 4 | 4 | — | — | ||||||||||||||||||||||||||||
| Honduras | 3 | 3 | — | — | ||||||||||||||||||||||||||||
| Nicaragua | 2 | 2 | — | — | ||||||||||||||||||||||||||||
| Jamaica | 2 | 2 | — | 2 | ||||||||||||||||||||||||||||
| Aruba | 1 | 1 | — | — | ||||||||||||||||||||||||||||
| Barbados | 1 | 1 | — | — | ||||||||||||||||||||||||||||
| U.S. Virgin Islands | 1 | 1 | — | — | ||||||||||||||||||||||||||||
| Totals | 54 | 56 | 1 | 3 | ||||||||||||||||||||||||||||
(1) In July 2025, the Company announced its plans to expand into Chile.
Our member-facing warehouse clubs are all located in Latin America and the Caribbean. Our two regional distribution centers located in the United States (Miami) and Costa Rica operate in conjunction with our local distribution centers in all of our multi-club markets throughout Latin America and the Caribbean. Our corporate headquarters, U.S. buying operations and support service center offices are located in the United States. Lastly, we have additional support service centers in some of our markets. Our operating segments are the United States, Central America, the Caribbean and Colombia.
In the third quarter of fiscal year 2025, we purchased land for our sixth warehouse club in the Dominican Republic, located in La Romana, approximately 73 miles east from the nearest club in the capital of Santo Domingo. The club will be built on a five-acre property and is anticipated to open in the spring of 2026.
In the first quarter of fiscal year 2026, we purchased land for our third warehouse club in Jamaica, located in Montego Bay, approximately 100 miles west from the nearest club in the capital of Kingston. The club will be built on a five-acre property and is anticipated to open in the fall of 2026.
In the second quarter of fiscal year 2026, we purchased land and plan to open our tenth warehouse club in Costa Rica, located in Ciudad Quesada, approximately 47 miles northwest from the nearest club in the capital of San Jose. The club will be built on a six-acre property and is anticipated to open in the fall of 2026.
Additionally, in the first quarter of fiscal year 2026, we executed a land lease for our fourth warehouse club in Jamaica, located on South Camp Road (Kingston), approximately 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 the winter of 2026.
The opening timeline for our anticipated Jamaica clubs has been adjusted by approximately one month as we address the operational disruptions caused by Hurricane Melissa and support recovery efforts across the island. We do not anticipate any further delays caused by the disruptions from Hurricane Melissa at this time.
Once these four new clubs are open, the Company will operate 60 warehouse clubs.
31
We continue to pursue opportunities to add new warehouse clubs in our existing markets and to assess opportunities in new markets. We are continuing to advance our planned expansion into Chile, which we have identified as a potential market for multiple PriceSmart warehouse clubs. We have entered into executory agreements for two potential sites for two new warehouse clubs in Chile. We have hired local consultants to help us in this process. However, opening PriceSmart warehouse clubs in Chile remains subject to our continuing market analyses, finalizing the agreements of appropriate sites for warehouse clubs, and the receipt of required governmental permits, among other uncertainties.
Factors Affecting the Business
Overall economic trends, foreign currency exchange volatility, and other factors impacting the business.
Our sales and profits vary from market to market depending on general economic factors, including Gross Domestic Product ("GDP") growth; consumer preferences; foreign currency exchange rates; political and social conditions; local demographic characteristics (such as population growth); the number of years we have operated in a particular market; and the level of retail and wholesale competition in that market. The economies of many of our markets are dependent on foreign trade, tourism, remittances from foreign workers located in the United States to individuals or family members in their home countries, and foreign direct investments. Uncertain economic conditions and slowdown in global economic growth and investment may impact the economies in our markets, causing significant declines in GDP and employment and devaluations of local currencies against the U.S. dollar.
Inflationary pressures could significantly impact product costs, and commodity price increases have and could again impact our financial results and could lead to reduced sales, fewer units sold, and/or margin pressure. For example, the COVID-19 pandemic resulted, directly or indirectly, in market and supply-chain disruptions, which increased the complexity of managing our inventory flow and business and resulted in substantial inventory markdowns on certain non-food product categories in the third quarter of fiscal year 2022. In addition, shipping and freight rates increased dramatically during that time. Similar challenges could reoccur in the future. While supply chains and transportation rates have normalized, we continue to work to hold down and/or mitigate price increases passed on to our Members while maintaining the right inventory mix to grow sales. One key factor has been our expanded network of distribution centers, which has facilitated alternative shipping routes, increased merchandise throughput, and provided flexibility to mitigate our supply chain challenges and risks more effectively.
Currency fluctuation can be one of the largest variables affecting our overall sales and profit performance because many of our markets are susceptible to foreign currency exchange rate volatility. In the first quarter of fiscal year 2026, some markets, primarily Colombia, benefited from currency appreciation, which was partially offset by currency devaluations we experienced in some of the other countries where we operate, primarily the Dominican Republic and Honduras, when compared to the first quarter of the prior year. During the first three months of fiscal years 2026 and 2025, approximately 80.9% and 80.0%, respectively, of our net merchandise sales were in currencies other than the U.S. dollar. Of those sales, 48.4% and 50.2% consisted of sales of products we purchased in U.S. dollars.
A devaluation of local currency reduces the value of sales and membership income that is generated in that country when translated to U.S. dollars for our consolidated results. In addition, when local currency experiences devaluation, we may elect to increase the local currency price of imported merchandise to maintain our target margins, which could impact demand for the merchandise affected by the price increase. Alternatively, we may elect not to raise prices to fully cover the impact of the devaluation, adversely affecting our margins. For example, during fiscal year 2023, the currency in Colombia devalued approximately 15%, but we selectively held pricing steady or took pricing actions to mitigate declines in demand, which negatively impacted our consolidated Total gross margin percentage. We may also modify the mix of imported versus local merchandise and/or the source of imported merchandise to mitigate the impact of currency fluctuations. Information about the effect of local currency devaluations is discussed further in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Net Merchandise Sales and Comparable Sales.”
Our wallet-share capture of total retail and wholesale sales can vary from market to market due to competition and the availability of other shopping options for our Members. Demographic characteristics within each of our markets can affect both the overall level of sales and future sales growth opportunities. Certain island markets, such as Aruba, Barbados and the U.S. Virgin Islands, offer limited upside for sales growth given their overall market size.
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We continue to face the risk of political instability which may have significant effects on our business. For example, protestors set up roadblocks in Panama during October and November 2023 as a reaction to an agreement between the Panamanian government and a mining company, disrupting traffic to our clubs throughout most of the market. In the third quarter of fiscal year 2025, Panama once again experienced widespread protests and social unrest against the government. Roadblocks in Guatemala in October 2023 related to election protests also limited access to certain of our warehouse clubs. Civil unrest in Colombia in response to tax reform and austerity measures paralyzed significant portions of the country’s infrastructure during the third quarter of fiscal year 2021.
In addition, we are closely monitoring developments in Latin America and the Caribbean following recent U.S. military action in Venezuela. It is too early to determine how this situation may evolve or what implications it could have for PriceSmart. Reactions among regional governments have varied. We will continue to assess developments and react as appropriate.
Our operations are subject to volatile weather conditions and natural disasters. In November 2020, Hurricanes Eta and Iota brought severe rainfall, winds, and flooding to a significant portion of Central America, especially Honduras, which caused significant damage to parts of that country’s infrastructure. In October 2025, Hurricane Melissa brought catastrophic winds, flash flooding and storm surge throughout the island of Jamaica resulting in the closure of our Jamaica clubs for two days. Although our warehouse clubs were not significantly affected and we were able to manage our supply chain to keep our warehouse clubs stocked with merchandise, similar natural disasters could adversely impact our overall sales, costs and profit performance in the future.
At times we face difficulties in the shipment of, and the risks inherent in the importation of, merchandise to our warehouse clubs. One of those difficulties is possible governmental restrictions on the importation of merchandise. In late May 2023, disputes with Nicaraguan customs and tax authorities resulted in delays in the issuance of our importation clearance, and general delays in the customs inspection process. While this situation had occurred frequently prior to May 2023, we generally were able to plan around these import blockages and resume imports within a matter of days. However, this last delay in obtaining importation clearance resulted in our being unable to import merchandise into Nicaragua for several weeks in June 2023. While our tax clearances and imports have returned to a normal cadence, we could see delays of imports into Nicaragua again as well as in other jurisdictions in which we operate.
Our operations depend on shipping, trucking, ports and other elements of the supply chain that often rely on unionized labor. A work stoppage or other limitation on operations from union or other labor-related matters could occur for any number of reasons, including as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiation of new collective bargaining agreements. For example, while it did not impact our export activities, we experienced a brief disruption to the flow of imported merchandise into our Miami distribution center operations because of the U.S. dockworkers strike in October 2024.
Current uncertainties about tariffs may have an adverse effect on our Company. The U.S. government has implemented significant tariffs measures, including a baseline tariff of 10% on products from all countries and higher rates targeting specific countries.
In July 2025, the United States enacted significant tax legislation commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent many provisions of the Tax Cuts and Jobs Act of 2017 and introduces additional changes affecting individuals and businesses. Key business related provisions include the continuation of the 21% federal corporate income tax rate, enhancements to bonus depreciation and expensing rules, and modifications to certain international provisions, including Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income deductions. The OBBBA also includes other targeted measures, including a 1% excise tax on foreign remittances.
We have reviewed the OBBBA and continue to monitor and model its potential impact on our operations and effective tax rate. Based on our current analysis of the Company's operating profile, we do not expect material effects on our 2026 fiscal year results or to our results going forward, considering our existing tax profile. Most provisions that represent substantive changes to existing law, including adjustments to international tax regimes and certain deduction limitations, are scheduled to take effect during our fiscal year 2027.
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Changes in tax laws, increases in the enacted tax rates, adverse outcomes in connection with tax audits in any jurisdiction, or any change in the pronouncements relating to accounting for income taxes could have a material adverse effect on our financial condition and results of operations. In one of the countries where we operate, the government made changes several years ago in the method of computing minimum tax payments, under which the government sought to require retailers to pay taxes based on a percentage of sales if the resulting tax were greater than the tax payable based on a percentage of income (Alternative Minimum Tax or "AMT"). We, together with our tax and legal advisers, appealed these interpretations and litigated our cases in the country’s court system. Nevertheless, in fiscal year 2023, we recorded a $7.2 million charge to settle the minimum tax payment dispute. To address the inherent risk of operating in a country in which tax legislation changes can significantly impact our business because of our low-margin business model and in which our ability to successfully appeal the application of these taxes is limited, we have increased prices in this market to offset or partially offset the rise in costs to comply with the annual AMT payment. These and other challenges may persist or become more acute and could have a material adverse effect on our business and results of operations.
From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity). This impedes our ability to convert local currencies obtained through merchandise sales into U.S. dollars to settle the U.S. dollar liabilities associated with our imported products or otherwise fund our operations. This illiquidity also increases our foreign exchange exposure to any devaluation of the local currency relative to the U.S. dollar. Additionally, the Company may incur significant premium costs to convert our local currencies into available tradable currencies and U.S. dollars. For instance, since fiscal year 2017, we have experienced this situation in Trinidad and have been unable to source a sufficient level of tradable currencies. We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies. Our balance as of November 30, 2025 of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollars was $80.2 million, a decrease of $20.3 million from the peak of $100.5 million as of November 30, 2020. However, as the Trinidad central bank strictly manages the exchange rate of the Trinidad dollar with the U.S. dollar and affects the level of U.S. dollar liquidity in the market through its interventions, we are subject to continued challenges in converting our Trinidad dollars to U.S. dollars, as well as being exposed to the risk of a potential devaluation of the currency. In July 2025, the Company entered into financing transactions to provide our Trinidad subsidiary with additional U.S. dollar liquidity needed to meet its operational needs and help reduce the shortfall in U.S. dollar sourcing due to continued illiquid foreign exchange conditions in that market.
While we are currently able to source substantially all the U.S. dollars that we need in Honduras, we faced similar U.S. dollar liquidity challenges in Honduras during fiscal year 2023 through much of fiscal year 2025, and the central bank still has strict controls there on the availability of U.S. dollars.
Mission
PriceSmart's mission is to provide all Members an outstanding shopping experience with high quality, exciting merchandise and services at the lowest possible prices.
Purpose
PriceSmart's purpose is to improve the lives and businesses of our Members, our employees and our communities through the responsible delivery of the best quality goods and services at the lowest possible prices. We aim to serve as a model company, which operates profitably and provides a good return to our investors, by providing Members in emerging and developing markets with exciting, high-quality merchandise sourced from around the world and valuable services at compelling prices in safe U.S.-style clubs and through PriceSmart.com. We prioritize the well-being and safety of our Members and employees. We provide good jobs, fair wages and benefits and opportunities for advancement. We strive to treat our suppliers right and empower them when we can, including both our regional suppliers and those from around the world. We try to conduct ourselves in a socially responsible manner as we endeavor to improve the quality of the lives of our Members and their businesses, while respecting the environment and the laws of all the countries in which we operate. We also believe in facilitating philanthropic contributions to the communities in which we do business. We charge Members an annual membership fee that enables us to operate our business with lower margins than traditional retail stores. As we continue to invest in technological capabilities, we are enhancing our capabilities to drive sales, operational efficiencies, and provide a better Member experience. We believe we are well positioned to blend the excitement and appeal of our brick-and-mortar business with the convenience and additional benefits of online shopping and services, while simultaneously enhancing Member experience and engagement.
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Growth
As we look to the future, our Company is focused on three major drivers of growth:
•Invest in Adding New PriceSmart Locations, Expanding into New Markets, Remodeling Current PriceSmart Clubs and Opening More Distribution Centers
•Increase Membership Value
•Drive Incremental Sales via PriceSmart.com and Enhanced Digital and Technological Capabilities
I.Invest in Adding New PriceSmart Locations, Expanding into New Markets, Remodeling Current PriceSmart Clubs and Opening More Distribution Centers. We continue to pursue opportunities to add new warehouse clubs in our existing markets and to assess opportunities in new markets. We have acquired land for three new warehouse clubs and entered into a land lease for a fourth new warehouse club. These warehouse clubs will be our sixth warehouse club in the Dominican Republic, our third and fourth warehouse clubs in Jamaica, and our tenth warehouse club in Costa Rica. Once these four new clubs are open, PriceSmart will operate 60 warehouse clubs in total. In addition to continued growth throughout our current markets, we are continuing to advance our planned expansion into Chile, which we have identified as a potential market for multiple PriceSmart warehouse clubs. As part of this initiative, we have hired local consultants to assist us, appointed a country general manager, and entered into executory agreements for two potential sites for two new warehouse clubs and are actively reviewing other potential sites. Additionally, we believe that one of the quickest and most effective ways to increase sales and profitability is to increase the size and efficiency of our existing warehouse clubs and the number of parking spaces at our high-volume locations. To support this strategy, we will begin warehouse club and parking lot expansions and remodels in fiscal year 2026 in Portmore, Jamaica and Barbados. During fiscal year 2024, we entered into a lease agreement to relocate and extend the lease term for our Miraflores club, which is our highest selling location in Guatemala. The new warehouse will have increased sales floor square footage and a greater number of parking spaces, along with covered parking for our Members. We expect to relocate our Miraflores club to this new location in the second half of calendar year 2027. We are enhancing our distribution and logistics network through the opening of distribution centers in China and in each of our multi-club markets, either operated by PriceSmart or through the use of third-party logistics providers. We anticipate full implementation of these distribution centers in China in the first half of fiscal year 2026. Our goal is to reduce landed costs and lead times (via direct shipments from Asia to our local markets) and improve our working capital as a result. In addition to our regional distribution center in Costa Rica, we have PriceSmart-operated distribution centers in various stages of development and implementation in other key markets. In the first quarter of fiscal year 2026, we adapted our distribution center in Panama to handle cold merchandise and began operation of a new dry distribution center in Guatemala. We plan to open distribution centers in Trinidad, Colombia and Dominican Republic during fiscal year 2026.
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II.Increase Membership Value. At PriceSmart, we are dedicated to attracting new Members and fostering long-term loyalty by continually enhancing the value of membership. In addition to providing low prices on merchandise, we seek to provide Members with greater convenience and an expanding range of services. This includes access to PriceSmart.com for online shopping, seamless club pickup and delivery services, and our comprehensive well-being initiative. Members enjoy optical services with free eye exams, affordably priced eyeglass frames, audiology services with hearing tests, and competitively priced hearing aids. In select markets, we offer pharmacy services to further enrich the PriceSmart membership experience. We increased the membership fee by $5 in all but one market during fiscal year 2024 and may consider further adjustments as member benefits and value continue to grow. A larger membership base and higher membership fee contribute to the bottom line of the business or can be reinvested in providing better pricing to our Members. We focus on growth of our membership base, Member renewal rates and average ticket as part of determining how Members see the value we offer. A key driver of our membership strategy is the Platinum Membership, which is designed to offer even more value to our most engaged Members. Platinum Members enjoy exclusive benefits, including an annual cashback reward on eligible purchases, which directly translates to savings that reward loyalty and increase purchasing power. By offering tangible financial rewards, we believe Members can derive maximum value from their membership, particularly when paired with the PriceSmart co-branded credit card which offers an additional cash back incentive for Members with the card. Platinum Members tend to demonstrate higher renewal rates and increased spending compared to other membership tiers. Platinum Membership accounts were 19.3% of our total membership base as of November 30, 2025, an increase from 14.0% as of November 30, 2024. This directly contributes to the Company's revenue growth and reinforces our commitment to providing best-in-class value for our Members. Additionally, our private-label products that we sell under the “Member’s Selection®” brand plays a crucial role in enhancing the membership value proposition. We believe these products, available only at PriceSmart, deliver superior value while maintaining the high standards that our Members expect. Sourced with care and designed to meet everyday needs, “Member’s Selection®” products range from pantry staples to household essentials, providing affordable alternatives without compromising on quality. During the first three months of fiscal year 2026, our private-label sales represented 27.0% of total net merchandise sales, down slightly from 27.7% in the same period of fiscal year 2025, and we plan to continue to invest in the development of additional private label products under the “Member’s Selection®” brand. In the first quarter of fiscal year 2026, the Company discontinued selling produce under the “Member’s Selection®” brand as we determined that these products no longer aligned with the value proposition we strive to deliver with our private-label products. Excluding discontinuation of produce under the “Member’s Selection®” brand, our private-label sales, as a percentage of total net merchandise sales, increased by 70 basis points compared to the same period of fiscal year 2025. Our strategy is to offer our Members a curated selection of high‑quality merchandise at prices we believe consistently deliver strong value across our markets. Our model focuses on fast‑turning items, with limited variations in styles, sizes, and colors to maximize efficiency and drive savings. We offer a limited number of stock keeping units ("SKUs") with large pack sizes. Our "Treasure Hunt" experience offers the best value on exclusive or one-time-buy merchandise. continuously enhancing our benefits and maintaining a strong focus on membership growth, renewal rates, and Member spending, we provide our Members with unmatched value, no matter how, when or where they choose to shop. As PriceSmart continues to grow, we look forward to reinvesting in new benefits and services that enhance the Member experience, creating a mutually beneficial relationship built on trust, value, and innovation.
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III.Drive Incremental Sales via PriceSmart.com and Enhanced Digital and Technological Capabilities. We’ve continued to tailor our digital experience to try to exceed our Members` expectations of how, when and where they want to shop. In the first quarter of fiscal year 2026, our digital channel sales reached $89.8 million, a 29.4% increase year-over-year, representing 6.6% of total net merchandise sales. We’re also modernizing our processes and technology. For example, we have continued making progress in our migration to the RELEX software platform in the first quarter of fiscal year 2026. We expect to complete our implementation in fiscal year 2026. We believe this upgrade enhances employee productivity and is designed to improve inventory management, reduce spoilage and increase in-stock availability, driving both sales and efficiency. In addition, during the first quarter of fiscal year 2026, we finalized implementing a new point-of-sale system, Elera, a Toshiba product, in all of our English-speaking markets in the Caribbean. In the second quarter of fiscal year 2026, we expect to begin implementation in our Spanish speaking Central American markets. We believe with Elera we can achieve faster checkout times, improve employee productivity and enhance our payment option capabilities. In the first quarter of fiscal year 2026, we began implementing Workday's human capital management system to replace legacy human resource 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 future growth. During the first quarter, we advanced our multi-phase implementation of the E2Open Global Trade Management platform designed to enhance automation, compliance, and controls across global import and export operations. We believe this platform will strengthen trade compliance, improve data visibility, and support scalable international growth once fully implemented. Lastly, during fiscal year 2026, we will begin migrating our mobile application to fully native iOS and Android architectures to enhance speed, reliability, and accessibility for our Members. We believe this will shorten the release cycles and deepen integration with our composable commerce stack. Solidifying our foundation and allowing for faster deployment of new features will help us achieve our mission of delivering an outstanding shopping experience while leveraging costs down.
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Financial highlights for the first quarter of fiscal year 2026 included:
•Total revenues increased 9.9% over the comparable prior year period.
•Net merchandise sales increased 10.6% over the comparable prior year period. We ended the quarter with 56 warehouse clubs compared to 54 warehouse clubs at the end of the first quarter of fiscal year 2025. Net merchandise sales - constant currency increased 9.5% over the comparable prior-year period.
•Comparable net merchandise sales (that is, sales in the 54 warehouse clubs that have been open for more than 13 ½ calendar months) for the 13 weeks ended November 30, 2025 increased 8.0%. Comparable net merchandise sales - constant currency for the 13 weeks ended November 30, 2025 increased 6.9%.
•Membership income for the first quarter of fiscal year 2026 increased 15.9% to $23.4 million over the comparable prior-year period.
•Total gross margins (net merchandise sales less associated cost of goods sold) increased 11.2% over the prior year period, and merchandise gross profits as a percent of net merchandise sales remained unchanged at 15.9% when compared to the same period in the prior year.
•Selling, general and administrative expenses increased 12.9% compared to the first quarter of fiscal year 2025, primarily due to investments in technology and compensation of our Chief Executive Officer. Selling, general and administrative expenses as a percentage of total revenues in the first quarter of fiscal year 2026 increased to 13.1% from 12.8% in the same period last year.
•Operating income for the first quarter of fiscal year 2026 was $62.9 million, an increase of 8.0%, or $4.7 million, compared to the first quarter of fiscal year 2025.
•We recorded a $7.2 million net loss in total other expense in the first quarter of fiscal year 2026 compared to a $7.3 million net loss in total other expense in the same period last year.
•Our effective tax rate increased in the first quarter of fiscal year 2026 to 27.9% from 26.5% in the first quarter of fiscal year 2025. The increase in the effective tax rate is primarily attributable to non-recurring items, primarily from a tax contingency accrual and foreign exchange rate fluctuations.
•Net income for the first quarter of fiscal year 2026 was $40.2 million, or $1.29 per diluted share, compared to $37.4 million, or $1.21 per diluted share, in the first quarter of fiscal year 2025.
•Adjusted EBITDA for the first quarter of fiscal year 2026 was $86.9 million compared to $79.1 million in the same period last year.
Non–GAAP (Generally Accepted Accounting Principles) Financial Measures
The accompanying Consolidated Financial Statements, including the related notes, are presented in accordance with U.S. GAAP (Generally Accepted Accounting Principles). In addition to relevant GAAP measures, we also provide non-GAAP measures including adjusted EBITDA, net merchandise sales - constant currency and comparable net merchandise sales - constant currency because management believes these metrics are useful to investors and analysts by excluding items that we do not believe are indicative of our core operating performance. These measures are customary for our industry and commonly used by competitors. However, these non-GAAP financial measures should not be reviewed in isolation or considered as an alternative to any other performance measure derived in accordance with GAAP and may not be comparable to similarly titled measures used by other companies in our industry or across different industries.
Adjusted EBITDA
Adjusted EBITDA is defined as net income before interest expense, provision for income taxes and depreciation and amortization, adjusted for the impact of certain other items, including interest income and other income (expense), net. The following is a reconciliation of our Net income to Adjusted EBITDA for the periods presented:
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| Three Months Ended | |||||||||||
| (Amounts in thousands) | November 30, 2025 | November 30, 2024 | |||||||||
Net income as reported | $ | 40,166 | $ | 37,428 | |||||||
| Adjustments: | |||||||||||
| Interest expense | 4,420 | 2,695 | |||||||||
| Provision for income taxes | 15,529 | 13,496 | |||||||||
| Depreciation and amortization | 23,977 | 20,862 | |||||||||
| Interest income | (2,949) | (2,220) | |||||||||
Other expense, net (1) | 5,761 | 6,856 | |||||||||
| Adjusted EBITDA | $ | 86,904 | $ | 79,117 | |||||||
(1) Primarily consists of transaction costs of converting the local currencies into available tradable currencies in some of our countries with liquidity issues and foreign currency losses or gains due to the revaluation of monetary assets and liabilities (primarily U.S. dollars) for the three months ended November 30, 2025 and 2024.
Net Merchandise Sales - Constant Currency and Comparable Net Merchandise Sales - Constant Currency
As a multinational enterprise, we are exposed to changes in foreign currency exchange rates. The translation of the operations of our foreign-based entities from their local currencies into U.S. dollars is sensitive to changes in foreign currency exchange rates and can have a significant impact on our reported financial results. We believe that constant currency is a useful measure, indicating the actual growth of our operations. When we use the term "net merchandise sales – constant currency," it means that we have translated current year net merchandise sales at prior year monthly average exchange rates. Net merchandise sales - constant currency results exclude the effects of foreign currency translation. Similarly, when we use the term "comparable net merchandise sales – constant currency," it means that we have translated current year comparable net merchandise sales at prior year monthly average exchange rates. Comparable net merchandise sales – constant currency results exclude the effects of foreign currency translation. Refer to “Management’s Discussion & Analysis – Net Merchandise Sales” and “Management’s Discussion & Analysis – Comparable Net Merchandise Sales” for our quantitative analysis and discussion. Reconciliations between net merchandise sales – constant currency and comparable net merchandise sales - constant currency and the most directly comparable GAAP measures are included where applicable.
COMPARISON OF THE THREE MONTHS ENDED NOVEMBER 30, 2025 AND 2024
The following discussion and analysis compares the results of operations for the three-month period ended on November 30, 2025 with the three-month period ended on November 30, 2024 and should be read in conjunction with the consolidated financial statements and the accompanying notes included elsewhere in this report. Unless otherwise noted, all tables present U.S. dollar amounts in thousands. Certain percentages presented are calculated using actual results prior to rounding.
Net Merchandise Sales
The following tables indicate the net merchandise club sales in the reportable segments in which we operate and the percentage growth in net merchandise sales by segment during the three months ended November 30, 2025 and November 30, 2024:
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||||||||||||||||||||||||||
| Amount | % of Net Sales | Increase from Prior Year | Change | Amount | % of Net Sales | ||||||||||||||||||||||||||||||
| Central America | $ | 816,633 | 60.3 | % | $ | 71,798 | 9.6 | % | $ | 744,835 | 60.9 | % | |||||||||||||||||||||||
| Caribbean | 359,086 | 26.5 | 19,447 | 5.7 | 339,639 | 27.7 | |||||||||||||||||||||||||||||
| Colombia | 178,077 | 13.2 | 38,692 | 27.8 | 139,385 | 11.4 | |||||||||||||||||||||||||||||
| Net merchandise sales | $ | 1,353,796 | 100.0 | % | $ | 129,937 | 10.6 | % | $ | 1,223,859 | 100.0 | % | |||||||||||||||||||||||
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Comparison of Three Months Ended November 30, 2025 and 2024
Overall, Net merchandise sales grew by 10.6% for the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025. The first quarter increase resulted from an 8.4% increase in transactions and a 2.1% increase in average ticket. Transactions represent the total number of visits our Members make to our warehouse clubs resulting in a sale and the total number of PriceSmart.com curbside pickup via our Click & Go® service and delivery service transactions. Average ticket represents the amount our Members spend on each visit or PriceSmart.com order. We had 56 clubs in operation as of November 30, 2025 compared to 54 clubs as of November 30, 2024.
Net merchandise sales in our Central America segment increased 9.6% during the first quarter. This increase had a 580 basis points (5.8%) positive impact on total net merchandise sales growth for the first quarter. All markets within this segment had positive net merchandise sales growth for the quarter ended. We opened our ninth warehouse club in Costa Rica in April 2025 and our seventh warehouse club in Guatemala in August 2025.
Net merchandise sales in our Caribbean segment increased 5.7% during the first quarter. This increase had a 160 basis points (1.6%) positive impact on total net merchandise sales growth for the first quarter. All markets within this segment had positive net merchandise sales growth.
Net merchandise sales in our Colombia segment increased 27.8% during the first quarter. This increase had a 320 basis point (3.2%) positive impact on total net merchandise sales growth for the first quarter.
The following table indicates the impact that currency exchange rates had on our net merchandise sales in dollars and the percentage change from the three month period ended November 30, 2025. When we use the term "net merchandise sales - constant currency," it means that we have translated current year net merchandise sales at prior year monthly average exchange rates. Net merchandise sales - constant currency results exclude the effects of foreign currency translation. Impact of foreign currency is the effect of currency fluctuations on our net merchandise sales.
Three Months Ended November 30, 2025 | |||||||||||||||||||||||||||||||||||
| Net Merchandise Sales | Net Merchandise Sales - Constant Currency | Impact of Foreign Currency Exchange | Net Merchandise Sales Growth | Net Merchandise Sales - Constant Currency Growth | % Impact of Foreign Currency Exchange | ||||||||||||||||||||||||||||||
| Central America | $ | 816,633 | $ | 813,526 | $ | 3,107 | 9.6 | % | 9.2 | % | 0.4 | % | |||||||||||||||||||||||
| Caribbean | 359,086 | 366,120 | (7,034) | 5.7 | 7.8 | (2.1) | |||||||||||||||||||||||||||||
| Colombia | 178,077 | 160,334 | 17,743 | 27.8 | 15.0 | 12.8 | |||||||||||||||||||||||||||||
| Consolidated total | $ | 1,353,796 | $ | 1,339,980 | $ | 13,816 | 10.6 | % | 9.5 | % | 1.1 | % | |||||||||||||||||||||||
Overall, the effects of currency fluctuations within our markets had approximately $13.8 million, or 110 basis points (1.1%), positive impact on net merchandise sales for the three months ended November 30, 2025.
Currency fluctuations had $3.1 million, or 40 basis points (0.4%), of positive impact on net merchandise sales in our Central America segment for the three months ended November 30, 2025. These currency fluctuations contributed approximately 30 basis points (0.3%) of positive impact on net merchandise sales for the three months ended November 30, 2025. The Costa Rican colón appreciated against the dollar as compared to the same three month period a year ago and was a significant factor in the contribution to the favorable currency fluctuations in this segment.
Currency fluctuations had $7.0 million, or 210 basis points (2.1%), of negative impact on net merchandise sales in our Caribbean segment for the three months ended November 30, 2025. These currency fluctuations contributed approximately 60 basis points (0.6%) of negative impact on total net merchandise sales growth for the three months ended November 30, 2025. The negative impact was primarily driven by the devaluation of the Dominican peso as compared to the same three month period a year ago.
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Currency fluctuations had $17.7 million, or 1,280 basis points (12.8%), of positive impact on net merchandise sales in our Colombia segment for the three months ended November 30, 2025. These currency fluctuations contributed approximately 140 basis points (1.4%) of positive impact on total net merchandise sales growth for the three months ended November 30, 2025. The Colombian peso appreciated significantly against the dollar as compared to the same three month period a year ago and was a significant factor in the contribution to the favorable currency fluctuations.
Comparable Merchandise Sales
We report comparable net merchandise sales on a “same week” basis with 13 weeks in each quarter beginning on a Monday and ending on a Sunday. The periods are established at the beginning of the fiscal year to provide as close a match as possible to the calendar month and quarter that is used for financial reporting purposes. This approach equalizes the number of weekend days and weekdays in each period for improved sales comparison, as we experience higher merchandise club sales on the weekends. Further, each of the warehouse clubs used in the calculations was open for at least 13 ½ calendar months before its results for the current period were compared with its results for the prior period. As a result, sales related to two of our clubs opened during fiscal year 2025 will not be used in the calculation of comparable sales until they have been open for at least 13 ½ months. Therefore, comparable net merchandise sales includes 54 warehouse clubs for the thirteen week periods ended November 30, 2025.
The following tables indicate the comparable net merchandise sales in the reportable segments in which we operate and the percentage changes in net merchandise sales by segment during the thirteen week period ended November 30, 2025 and December 1, 2024 compared to the prior year:
Thirteen Weeks Ended | ||||||||||||||
| November 30, 2025 | December 1, 2024 | |||||||||||||
| % Increase in Comparable Net Merchandise Sales | % Increase in Comparable Net Merchandise Sales | |||||||||||||
| Central America | 5.4 | % | 5.1 | % | ||||||||||
| Caribbean | 5.6 | 5.2 | ||||||||||||
| Colombia | 27.9 | 10.3 | ||||||||||||
| Consolidated comparable net merchandise sales | 8.0 | % | 5.7 | % | ||||||||||
Comparison of Thirteen Weeks Ended November 30, 2025 and December 1, 2024
Comparable net merchandise sales for those warehouse clubs that were open for at least 13 ½ months for some or all of the thirteen week period ended November 30, 2025 increased 8.0%.
Comparable net merchandise sales in our Central America segment increased 5.4% for the thirteen week period ended November 30, 2025. All of our markets in Central America had positive comparable net merchandise sales growth for the thirteen week period ended November 30, 2025. The positive comparable net merchandise sales growth for our Central America segment contributed approximately 320 basis points (3.2%) of positive impact on total comparable merchandise sales for the thirteen week period ended November 30, 2025.
Comparable net merchandise sales in our Caribbean segment increased 5.6% for the thirteen week period ended November 30, 2025. This increase contributed approximately 160 basis points (1.6%) of positive impact on total comparable merchandise sales for the thirteen week period ended November 30, 2025.
Comparable net merchandise sales in our Colombia segment increased 27.9% for the thirteen week period ended November 30, 2025. This increase contributed approximately 320 basis points (3.2%) of positive impact on total comparable merchandise sales for the thirteen week period ended November 30, 2025.
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When we use the term "comparable net merchandise sales - constant currency," it means that we have translated current year comparable net merchandise sales at prior year monthly average exchange rates. Comparable net merchandise sales - constant currency results exclude the effects of foreign currency translation. The following tables illustrate the comparable net merchandise sales - constant currency percentage growth and the impact that changes in foreign currency exchange rates had on our comparable merchandise sales percentage growth for the thirteen week period ended November 30, 2025:
Thirteen Weeks Ended November 30, 2025 | ||||||||||||||||||||
| Comparable Net Merchandise Sales Growth | Comparable Net Merchandise Sales - Constant Currency Growth | % Impact of Foreign Currency Exchange | ||||||||||||||||||
| Central America | 5.4 | % | 5.1 | % | 0.3 | % | ||||||||||||||
| Caribbean | 5.6 | 7.7 | (2.1) | |||||||||||||||||
| Colombia | 27.9 | 14.7 | 13.2 | |||||||||||||||||
| Consolidated comparable net merchandise sales | 8.0 | % | 6.9 | % | 1.1 | % | ||||||||||||||
Overall, the mix of currency fluctuations within our markets had 110 basis points (1.1%) of positive impact on comparable net merchandise sales for the thirteen week periods ended November 30, 2025.
Currency fluctuations within our Central America segment accounted for approximately 20 basis points (0.2%) of positive impact on total comparable merchandise sales for the thirteen week period ended November 30, 2025. Our Costa Rica market was the main contributor to the positive impact as the market experienced currency appreciation when compared to the same thirteen week period last year.
Currency fluctuations within our Caribbean segment accounted for approximately 60 basis points (0.6%) of negative impact on total comparable merchandise sales for the thirteen week period ended November 30, 2025. Our Dominican Republic market was the main contributor as this market experienced currency devaluation when compared to the same period last year.
Currency fluctuations within our Colombia segment accounted for approximately 150 basis points (1.5%) of positive impact on total comparable merchandise sales for the thirteen week period ended November 30, 2025. This reflects the appreciation of the Colombian peso's foreign currency exchange rate when compared to the same period a year ago.
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Membership Income
Membership income is recognized ratably over the one-year life of the membership.
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Amount | % of Total Operating Income | Increase from Prior Year | % Change | Membership Income % to Net Merchandise Sales | Amount | % of Total Operating Income | |||||||||||||||||||||||||||||||||||
| Membership income - Central America | $ | 13,497 | $ | 1,723 | 14.6 | % | 1.7 | % | $ | 11,774 | |||||||||||||||||||||||||||||||
| Membership income - Caribbean | 5,985 | 535 | 9.8 | 1.7 | 5,450 | ||||||||||||||||||||||||||||||||||||
| Membership income - Colombia | 3,938 | 963 | 32.4 | 2.2 | 2,975 | ||||||||||||||||||||||||||||||||||||
| Membership income - Total | $ | 23,420 | 37.2 | % | $ | 3,221 | 15.9 | % | 1.7 | % | $ | 20,199 | 34.7 | % | |||||||||||||||||||||||||||
| Number of accounts - Central America | 1,141,943 | 75,570 | 7.1 | % | 1,066,373 | ||||||||||||||||||||||||||||||||||||
| Number of accounts - Caribbean | 510,819 | 23,760 | 4.9 | 487,059 | |||||||||||||||||||||||||||||||||||||
| Number of accounts - Colombia | 386,796 | 29,148 | 8.1 | 357,648 | |||||||||||||||||||||||||||||||||||||
| Number of accounts - Total | 2,039,558 | 128,478 | 6.7 | % | 1,911,080 | ||||||||||||||||||||||||||||||||||||
Comparison of Three Months Ended November 30, 2025 and November 30, 2024
The number of Member accounts as of November 30, 2025 was 6.7% higher than the number of accounts as of November 30, 2024. Membership income increased 15.9% over the three month period ended November 30, 2025 compared to the same prior-year period.
Membership income, which is recognized ratably over the 12-month term of the membership, increased in all of our segments in the three month period ended November 30, 2025. The consolidated increase in membership income is primarily due to an increase in the platinum membership base since the prior year. In our Central America segment, membership income increased compared to the first three months of fiscal year 2025, primarily attributable to the opening of two new clubs. In our Caribbean segment, membership income increased compared to the first three months of fiscal year 2025 due to an increase in membership accounts. In our Colombia segment, membership income increased compared to the first three months of fiscal year 2025 due to the appreciation of the Colombian peso and an increase in membership accounts.
We offer the Platinum Membership program in all locations where PriceSmart operates. The annual fee for a Platinum Membership in most markets is approximately $80, depending on the market in which the Member lives. The Platinum Membership program provides Members with a 2% rebate on most items, up to an annual maximum of $500. We record the 2% rebate as a reduction of net merchandise sales at the time of the sales transaction. Platinum Membership accounts are 19.3% of our total membership base as of November 30, 2025, an increase from 14.0% as of November 30, 2024. Platinum Members tend to have higher renewal rates than our Diamond Members. During the first quarter of fiscal year 2026 and throughout fiscal year 2025, we ran platinum promotional campaigns, resulting in an increase in the total number of Platinum Members.
Our trailing twelve-month renewal rate was 89.3% and 87.8% for the periods ended November 30, 2025 and November 30, 2024, respectively. This compares to a trailing twelve-month renewal rate of 88.8% for the twelve-month period ended August 31, 2025.
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Other Revenue
Other revenue primarily consists of our interest-generating portfolio from our co-branded credit cards, rental income from operating leases where the Company is the lessor, and advertising income for our seasonal catalog.
| Three Months Ended | |||||||||||||||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||||||||||||||
| Amount | Increase from Prior Year | % Change | Amount | ||||||||||||||||||||
| Miscellaneous income | $ | 4,326 | $ | 709 | 19.6 | % | $ | 3,617 | |||||||||||||||
| Rental income | 1,060 | 409 | 62.8 | 651 | |||||||||||||||||||
| Other revenue | $ | 5,386 | $ | 1,118 | 26.2 | % | $ | 4,268 | |||||||||||||||
Comparison of Three Months Ended November 30, 2025 and November 30, 2024
The primary driver of the increase in other revenue for the three months ended November 30, 2025 was an increase in Miscellaneous income primarily driven by an increase in advertising income for our seasonal catalog when compared to the prior year.
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Results of Operations
| Three Months Ended | |||||||||||||||||
| Results of Operations Consolidated | November 30, 2025 | November 30, 2024 | Increase | ||||||||||||||
(Amounts in thousands, except percentages and number of warehouse clubs) | |||||||||||||||||
| Net merchandise sales | |||||||||||||||||
| Net merchandise sales | $ | 1,353,796 | $ | 1,223,859 | $ | 129,937 | |||||||||||
| Total gross margin | $ | 215,614 | $ | 193,982 | $ | 21,632 | |||||||||||
| Total gross margin percentage | 15.9% | 15.9% | —% | ||||||||||||||
| Revenues | |||||||||||||||||
| Total revenues | $ | 1,382,729 | $ | 1,257,944 | $ | 124,785 | |||||||||||
| Percentage change from prior period | 9.9% | ||||||||||||||||
| Comparable net merchandise sales | |||||||||||||||||
| Total comparable net merchandise sales increase | 8.0% | 5.7% | 2.3% | ||||||||||||||
| Total revenue margin | |||||||||||||||||
| Total revenue margin | $ | 244,385 | $ | 219,054 | $ | 25,331 | |||||||||||
| Total revenue margin percentage | 17.7% | 17.4% | 0.3% | ||||||||||||||
| Selling, general and administrative | |||||||||||||||||
| Selling, general and administrative | $ | 181,458 | $ | 160,794 | $ | 20,664 | |||||||||||
| Selling, general and administrative percentage of total revenues | 13.1% | 12.8% | 0.3 | % | |||||||||||||
| Operational data | |||||||||||||||||
Adjusted EBITDA(1) | $ | 86,904 | $ | 79,117 | $ | 7,787 | |||||||||||
| Warehouse clubs at period end | 56 | 54 | 2 | ||||||||||||||
| Warehouse club sales floor square feet at period end | 2,732 | 2,646 | 86 | ||||||||||||||
(1) See “Item 2. Management’s Discussion & Analysis – Non - GAAP Financial Measures” for the definition of Adjusted EBITDA and a reconciliation to GAAP net income as reported.
| Three Months Ended | |||||||||||||||||||||||
| Results of Operations Consolidated | November 30, 2025 | % of Total Revenue | November 30, 2024 | % of Total Revenue | |||||||||||||||||||
Operating income by segment | |||||||||||||||||||||||
| Central America | $ | 55,070 | 4.0 | % | $ | 52,058 | 4.1 | % | |||||||||||||||
| Caribbean | 22,544 | 1.6 | 22,709 | 1.8 | |||||||||||||||||||
| Colombia | 9,736 | 0.7 | 5,630 | 0.4 | |||||||||||||||||||
| United States | (1,865) | (0.1) | (1,672) | (0.1) | |||||||||||||||||||
Reconciling Items (1) | (22,558) | (1.6) | (20,465) | (1.6) | |||||||||||||||||||
| Operating income - Total | $ | 62,927 | 4.6 | % | $ | 58,260 | 4.6 | % | |||||||||||||||
(1)The reconciling items reflect the amount eliminated upon consolidation of intersegment transactions.
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The following table summarizes the selling, general and administrative expense for the periods disclosed:
Three Months Ended | |||||||||||||||||||||||
| November 30, 2025 | % of Total Revenue | November 30, 2024 | % of Total Revenue | ||||||||||||||||||||
| Warehouse club and other operations | $ | 131,815 | 9.5 | % | $ | 117,855 | 9.4 | % | |||||||||||||||
| General and administrative | 49,308 | 3.6 | 42,565 | 3.4 | |||||||||||||||||||
| Pre-opening expenses | 2 | — | 22 | — | |||||||||||||||||||
| Loss on disposal of assets | 333 | — | 352 | — | |||||||||||||||||||
| Total Selling, general and administrative | $ | 181,458 | 13.1 | % | $ | 160,794 | 12.8 | % | |||||||||||||||
Comparison of Three Months Ended November 30, 2025 and November 30, 2024
Total gross margin is derived from our Revenue – Net merchandise sales less our Cost of goods sold – Net merchandise sales and represents our sales and cost of sales generated from the business activities of our warehouse clubs. We express our Total gross margin percentage as a percentage of our Net merchandise sales.
On a consolidated basis, total gross margin as a percent of Net merchandise sales for the three months ended November 30, 2025 remained flat at 15.9% when compared to the prior-year period.
Total revenue margin is derived from Total revenues, which includes our Net merchandise sales, Membership income, Export sales, and Other revenue and income less our Cost of goods sold for net merchandise sales and Export sales. We express our Total revenue margin as a percentage of Total revenues.
Total revenue margin increased 30 basis points (0.3%) for the three month period ended November 30, 2025 compared to the prior year period primarily due to increases in membership income and other income of 10 basis points (0.1%) each as a percentage of total revenues.
Selling, general, and administrative expenses consist of warehouse club and other operations, general and administrative expenses, pre-opening expenses, and loss on disposal of assets. In total, selling, general and administrative expenses increased $20.7 million for the first quarter of fiscal year 2026 compared to the same prior-year period, and increased as a percentage of total revenues by 30 basis points (0.3%) to 13.1% of total revenues for the first quarter of fiscal year 2026 compared to 12.8% of total revenues for the first quarter of fiscal year 2025.
Warehouse club and other operations expenses increased to 9.5% of total revenues for the first quarter of fiscal year 2026 compared to 9.4% for the prior-year period. This is primarily due to our Colombia market, which increased as a percentage of total revenues year over year due to the impact of the appreciation of the Colombian peso on our warehouse club and other operations expenses in Colombia.
General and administrative expenses increased to 3.6% of total revenues for the first quarter of fiscal year 2026 compared to 3.4% of total revenues for the first quarter of fiscal year 2025. The increase is primarily due to investments in technology and compensation of our Chief Executive Officer. During his tenure as our Interim Chief Executive Officer from February 2023 to August 2025, Robert Price declined any compensation for his services.
Operating income increased to $62.9 million (4.6% of total revenues) in the first quarter of fiscal year 2026 compared to $58.3 million (4.6% of total revenues) for the first quarter of fiscal year 2025.
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Interest Income
Interest income represents the earnings generated from interest-bearing assets held by PriceSmart, Inc. and our wholly owned foreign subsidiaries. These assets include investments in fixed income securities and deposits held with financial institutions. The interest income is derived from the interest payments received on these assets, which serve to enhance our overall financial returns.
| Three Months Ended | |||||||||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||||||||
| Amount | Change | Amount | |||||||||||||||
| Interest income | $ | 2,949 | $ | 729 | $ | 2,220 | |||||||||||
Comparison of Three Months Ended November 30, 2025 and November 30, 2024
Net interest income increased for the three months ended November 30, 2025, primarily due to an increase in amounts on deposit when compared to the prior year.
Interest Expense
| Three Months Ended | |||||||||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||||||||
| Amount | Change | Amount | |||||||||||||||
| Interest expense on loans | $ | 3,646 | $ | 1,053 | $ | 2,593 | |||||||||||
| Interest expense related to hedging activity | 1,121 | 724 | 397 | ||||||||||||||
| Less: Capitalized interest | (347) | (52) | (295) | ||||||||||||||
Interest expense | $ | 4,420 | $ | 1,725 | $ | 2,695 | |||||||||||
Comparison of Three Months Ended November 30, 2025 and November 30, 2024
Interest expense reflects borrowings by PriceSmart, Inc. and our wholly owned foreign subsidiaries to finance new land acquisition and construction for new warehouse clubs and distribution centers, warehouse club expansions, the capital requirements of warehouse club and other operations, and ongoing working capital requirements.
Interest expense increased for the three month period ended November 30, 2025, primarily due to an increase in outstanding debt when compared to the prior year period. The increase in outstanding debt was primarily in our Trinidad subsidiary in which we entered into financing transactions to provide additional U.S. dollar liquidity in the fourth quarter of fiscal year 2025.
Other Expense, Net
Other expense, net consists of currency gains or losses, as well as net benefit costs related to our defined benefit plans and other items considered to be non-operating in nature.
| Three Months Ended | |||||||||||||||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||||||||||||||
| Amount | Change | % Change | Amount | ||||||||||||||||||||
| Other expense, net | $ | (5,761) | $ | 1,095 | (16.0) | % | $ | (6,856) | |||||||||||||||
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Monetary assets and liabilities denominated in currencies other than the functional currency of the respective entity (primarily U.S. dollars) are revalued to the functional currency using the exchange rate on the balance sheet date. These foreign exchange transaction gains/(losses) are recorded as currency gains or losses. Additionally, gains or losses from transactions denominated in currencies other than the functional currency of the respective entity also generate currency gains or losses.
For the three months ended November 30, 2025, the primary driver of Other expense, net was $4.1 million of losses due to revaluation of monetary assets and liabilities (primarily U.S. dollars) compared to $3.3 million in the prior year period. Additionally, during the three months ended November 30, 2025, our markets contributed $2.1 million of transaction costs, associated with converting the local currencies into available tradable currencies before converting them to U.S. dollars in some of our countries with foreign exchange liquidity issues compared to $3.4 million in the prior year period.
Provision for Income Taxes
| Three Months Ended | |||||||||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||||||||
| Amount | Change | Amount | |||||||||||||||
| Provision for income taxes | $ | 15,529 | $ | 2,033 | $ | 13,496 | |||||||||||
| Effective tax rate | 27.9% | 26.5% | |||||||||||||||
Comparison of Three Months Ended November 30, 2025 and November 30, 2024
For the three months ended November 30, 2025, the effective tax rate was 27.9% compared to 26.5% for the prior-year period. The increase in the effective rate versus the prior year was primarily attributable to non-recurring items, primarily from a tax contingency accrual and foreign exchange rate fluctuations.
Other Comprehensive Income
| Three Months Ended | |||||||||||||||||||||||
| November 30, 2025 | November 30, 2024 | ||||||||||||||||||||||
| Amount | Change | % Change | Amount | ||||||||||||||||||||
| Other Comprehensive Income (Loss) | $ | 16,643 | $ | 19,659 | 651.8 | % | $ | (3,016) | |||||||||||||||
Comparison of Three Months Ended November 30, 2025 and November 30, 2024
Other comprehensive income for the first quarter of fiscal year 2026 resulted primarily from foreign currency translation adjustments related to assets and liabilities and the translation of the statements of income related to revenue, costs and expenses of our subsidiaries whose functional currency is not the U.S. dollar. During the first three months of fiscal year 2026, the largest translation adjustments were related to the appreciation of the local currency against the U.S. dollar of our Colombia and Costa Rica subsidiaries.
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LIQUIDITY AND CAPITAL RESOURCES
Financial Position and Cash Flow
Our operations have historically supplied us with a significant source of liquidity. We generate cash from operations primarily through net merchandise sales and membership fees. We use cash in operations for payments to our merchandise vendors, warehouse club and distribution center operating costs (including payroll, employee benefits and utilities), as well as payments for income taxes. Our cash flows provided by operating activities, supplemented with our long-term debt and short-term borrowings, have generally been sufficient to fund our operations while allowing us to invest in activities that support the long-term growth of our operations. We also have returned cash to stockholders through a regular semiannual dividend, a one-time special dividend in the third quarter of fiscal year 2024, and by repurchasing shares of our common stock pursuant to the stock repurchase program we commenced in the fourth quarter of fiscal year 2023 and completed in the first quarter of fiscal year 2024. We evaluate our funding requirements on a regular basis to cover any shortfall in our ability to generate sufficient cash from operations to meet our capital requirements. We may consider funding alternatives to provide additional liquidity if necessary. Refer to “Item 1. Financial Statements: Notes to Consolidated Financial Statements, Note 7 - Debt” for additional information regarding our available short-term facilities, short-term and long-term borrowings, and any repayments.
Repatriation of cash and cash equivalents held by foreign subsidiaries may require us to accrue and pay taxes for certain jurisdictions. If we decide to repatriate cash through the payment of a cash dividend by our foreign subsidiaries to our domestic operations, we will accrue taxes if and when appropriate.
The following table summarizes the cash and cash equivalents, including restricted cash, held by our foreign subsidiaries and domestically (in thousands):
| November 30, 2025 | August 31, 2025 | ||||||||||
| Amounts held by foreign subsidiaries | $ | 215,390 | $ | 222,770 | |||||||
| Amounts held domestically | 34,167 | 62,521 | |||||||||
| Total cash and cash equivalents, including restricted cash | $ | 249,557 | $ | 285,291 | |||||||
The following table summarizes the short-term investments held by our foreign subsidiaries and domestically (in thousands):
| November 30, 2025 | August 31, 2025 | ||||||||||
| Amounts held by foreign subsidiaries | $ | 114,160 | $ | 73,186 | |||||||
| Amounts held domestically | — | — | |||||||||
| Total short-term investments | $ | 114,160 | $ | 73,186 | |||||||
As of November 30, 2025, certificates of deposit with a maturity of over one year held by our foreign subsidiaries were $11.9 million. As of August 31, 2025, there were no certificates of deposit with a maturity of over one year held by our foreign subsidiaries or domestically.
From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity). This impedes our ability to convert local currencies obtained through merchandise sales into U.S. dollars to settle the U.S. dollar liabilities associated with our imported products or otherwise fund our operations. For instance, since fiscal year 2017, we have experienced this situation in Trinidad and have been unable to source a sufficient level of tradable currencies. We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies. Our balance as of November 30, 2025 of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollars was $80.2 million. While we are currently able to source substantially all the U.S. dollars that we need in Honduras, we faced similar U.S. dollar liquidity challenges in Honduras during fiscal year 2023 through much of fiscal year 2025 and the Central bank still has strict controls there on the availability of U.S. dollars. Refer to “Management’s Discussion & Analysis – Factors Affecting Our Business” and "Quantitative and Qualitative Disclosures about Market Risk" for quantitative analysis and discussion.
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Our cash flows are summarized as follows (in thousands):
| Three Months Ended | |||||||||||||||||
| November 30, 2025 | November 30, 2024 | Change | |||||||||||||||
| Net cash provided by operating activities | $ | 71,245 | $ | 38,530 | $ | 32,715 | |||||||||||
| Net cash used in investing activities | (90,267) | (29,306) | (60,961) | ||||||||||||||
| Net cash used in financing activities | (16,150) | (17,588) | 1,438 | ||||||||||||||
| Effect of exchange rates | (562) | 8,514 | (9,076) | ||||||||||||||
| Net increase (decrease) in cash and cash equivalents | $ | (35,734) | $ | 150 | $ | (35,884) | |||||||||||
Net cash provided by operating activities totaled $71.2 million and $38.5 million for the three months ended November 30, 2025 and November 30, 2024, respectively. For the three months ended November 30, 2025, net cash provided by operating activities increased primarily due to $18.7 million of overall net positive changes in our various operating assets and liabilities mainly due to decreases in our VAT receivables and increases in accrued platinum rewards, as well as shifts in working capital which contributed $10.0 million to the overall increase.
Net cash used in investing activities totaled $90.3 million and $29.3 million for the three months ended November 30, 2025 and November 30, 2024, respectively. The $61.0 million increase in net cash used in investing activities is primarily due to a net increase in purchases less proceeds of short-term investments of $39.8 million, an $11.9 million increase in purchases of long-term investments and a $10.4 million increase in property and equipment expenditures to support growth of our real estate footprint due to timing in our expansion program compared to the same three-month period a year ago. This was partially offset by $1.1 million of cash received due to the dissolution of our joint venture.
Net cash used in financing activities totaled $16.2 million and $17.6 million for the three months ended November 30, 2025 and November 30, 2024, respectively. The $1.4 million decrease in net cash used in financing activities is primarily the result of an $8.4 million decrease in net repayments of long term bank borrowings during the first three months of fiscal year 2026, partially offset by a $5.1 million increase in the net repayments of short-term bank borrowings and a $1.8 million increase in purchases of treasury stock upon vesting of restricted stock awards to cover employees' tax withholding obligations compared to the same period a year ago.
The following table summarizes the dividends declared and paid during fiscal year 2025 (amounts are per share):
| First Payment | Second Payment | |||||||||||||||||||||||||||||||||||||||||||
| Declared | Amount | Record Date | Date Paid | Amount | Record Date | Date Paid | Amount | |||||||||||||||||||||||||||||||||||||
| 2/6/2025 | $ | 1.26 | 2/18/2025 | 2/28/2025 | $ | 0.63 | 8/15/2025 | 8/29/2025 | $ | 0.63 | ||||||||||||||||||||||||||||||||||
On February 6, 2025, the Company’s Board of Directors declared an annual cash dividend in the total amount of $1.26 per share, with $0.63 per share paid on February 28, 2025 to stockholders of record as of February 18, 2025 and $0.63 per share paid on August 29, 2025 to stockholders of record as of August 15, 2025. The declaration of future dividends (ongoing or otherwise), if any, the amount of such dividends, and the establishment of record and payment dates is subject to final determination by the Board of Directors at its discretion after its review of the Company’s financial performance and anticipated capital requirements, taking into account the uncertain macroeconomic conditions on our results of operations and cash flows.
Capital Expenditures
Capital expenditures were $38.6 million for the three months ended November 30, 2025, of which $18.5 million and $20.1 million were for maintenance and growth expenditures, respectively. Maintenance expenditures are typically for operational fixtures and equipment, building refurbishment, solar, technology and other expenses. Growth expenditures are for new clubs, purchases of previously leased clubs, investments to move existing clubs to better locations, supply chain improvements, and major remodels and expansions.
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Short-Term Borrowings and Long-Term Debt
Our financing strategy is to ensure liquidity and access to capital markets while minimizing our borrowing costs. The proceeds of these borrowings were or will be used for general corporate purposes, which may include, among other things, funding for working capital, capital expenditures, acquisitions, dividends and repayment of existing debt. Refer to “Item 1. Financial Statements: Notes to Consolidated Financial Statements, Note 7 – Debt" for further discussion.
Future Lease and Other Commitments
We place a strong emphasis on managing future lease commitments related to various facilities and equipment that support our operations. We believe our current liquidity and cash flow projections can cover future lease commitments. As of November 30, 2025, we have signed two lease agreements which have not yet commenced. Please refer to "Item 1. Financial Statements: Notes to Consolidated Financial Statements, Note 6 – Commitments and Contingencies" for further discussion.
Derivatives
Please refer to “Item 1. Financial Statements: Notes to Consolidated Financial Statements, Note 8 – Derivative Instruments and Hedging Activities” for further discussion.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements that have had, or are reasonably likely to have, a material current or future effect on its financial condition or consolidated financial statements.
Repurchase of Common Stock and Reissuance of Treasury Shares Related to Employee Stock Awards
At the vesting dates for restricted stock awards to our employees, we repurchase a portion of the shares that have vested at the prior day's closing price per share and apply the proceeds to pay the employees' tax withholding requirements, not to exceed the maximum statutory tax rate, related to the vesting of restricted stock awards. The Company expects to continue this practice going forward.
Shares of common stock repurchased by us are recorded at cost as treasury stock and result in the reduction of stockholders’ equity in our consolidated balance sheets. We may reissue these treasury shares in the future.
Critical Accounting Estimates
The preparation of our consolidated financial statements requires that management make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Some of our accounting policies require management to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Management continues to review its accounting policies and evaluate its estimates, including those related to business acquisitions, contingencies and litigation, income taxes, value added taxes, and long-lived assets. We base our estimates on historical experience and on other assumptions that management believes to be reasonable under the present circumstances. Using different estimates could have a material impact on our financial condition and results of operations.
Income Taxes
For interim reporting, we estimate an annual effective tax rate (AETR) to calculate income tax expense. Our income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best estimate of current and future taxes to be paid.
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We are required to file federal and state income tax returns in the United States and income tax and various other tax returns in multiple foreign jurisdictions, each with changing tax laws, regulations and administrative positions. This requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. We record the benefits of uncertain tax positions in our financial statements only after determining it is more likely than not the uncertain tax positions would sustain challenge by taxing authorities, including resolution of related appeals or litigation processes, if any. We develop our assessment of an uncertain tax position based on the specific facts and legal arguments of each case and the associated probability of our reporting position being upheld, using internal expertise and the advice of third-party experts. However, our tax returns are subject to routine reviews by the various taxing authorities in the jurisdictions in which we file our tax returns. As part of these reviews, taxing authorities may challenge, and in some cases presently are challenging, the interpretations we have used to calculate our tax liability. In addition, any settlement with the tax authority or the outcome of any appeal or litigation process might result, and in some cases has resulted, in an outcome that is materially different from our estimated liability. When facts and circumstances change, we reassess these probabilities and record any changes in the consolidated financial statements as appropriate. Variations in the actual outcome of these cases could materially impact our consolidated financial statements.
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, we begin with historical results and incorporate assumptions about the amount of future state, federal, and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income.
Tax Receivables
We pay Value Added Tax (“VAT”) or similar taxes, income taxes, and other taxes within the normal course of our business in most of the countries in which we operate related to the procurement of merchandise and/or services we acquire and/or on sales and taxable income. VAT is a form of indirect tax applied to the value added at each stage of production (primary, manufacturing, wholesale and retail). This tax is similar to, but operates somewhat differently than, sales tax paid in the United States. We generally collect VAT from our Members upon sale of goods and services and pay VAT to our vendors upon purchase of goods and services. Periodically, we submit VAT reports to governmental agencies and reconcile the VAT paid and VAT received. The net overpaid VAT may be refunded or applied to subsequent returns, and the net underpaid VAT must be remitted to the government.
With respect to income taxes paid, if the estimated income taxes paid or withheld exceed the actual income tax due this creates an income tax receivable. In most countries where we operate, the governments have implemented additional collection procedures, such as requiring credit card processors to remit a portion of sales processed via credit and debit cards directly to the government as advance payments of VAT and/or income tax. This collection mechanism generally leaves us with net VAT and/or income tax receivables, forcing us to process significant refund claims on a recurring basis. These refund or offset processes can take anywhere from several months to several years to complete.
Minimum tax rules, applicable in some of the countries where the Company operates, require the Company to pay taxes based on a percentage of sales if the resulting tax were greater than the tax payable based on a percentage of income (Alternative Minimum Tax or "AMT"). This can result in AMT payments substantially in excess of taxes the Company would expect to pay based on taxable income. As the Company believes that, in one country where it operates, it should ultimately only be liable for an income-based tax, it has accumulated income tax receivables of $10.4 million and $10.5 million and deferred tax assets of $4.3 million and $3.9 million as of November 30, 2025 and August 31, 2025, respectively, in this country.
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The Company’s various outstanding VAT receivables and/or income tax receivables are based on cases or appeals with their own set of facts and circumstances. The Company consults and evaluates with legal and tax advisors regularly to understand the strength of its legal arguments and probability of successful outcomes in addition to its own experience handling these complex tax issues. While the rules related to refunds of income tax receivables in these countries are unclear and complex, the Company has not placed any type of allowance on the recoverability of the remaining tax receivables or deferred tax assets, because the Company believes that it is more likely than not that it will ultimately succeed in its refund requests. Similarly, we have not placed any recoverability allowances on tax receivables that arise from payments we are required to make pursuant to tax assessments that we are appealing because we believe it is more likely than not that we will ultimately prevail in the related appeals. There can be no assurance, however, that the Company will be successful in recovering all tax receivables or deferred tax assets.
Our policy for classification and presentation of VAT receivables, income tax receivables and other tax receivables is as follows:
•Short-term VAT and income tax receivables, recorded as Prepaid expenses and other current assets: This classification is used for any countries where our subsidiary has generally demonstrated the ability to recover the VAT or income tax receivable within one year. We also classify as short-term any approved refunds or credit notes to the extent that we expect to receive the refund or use the credit notes within one year.
•Long-term VAT and income tax receivables, recorded as Other non-current assets: This classification is used for amounts not approved for refund or credit in countries where our subsidiary has not demonstrated the ability to obtain refunds within one year and/or for amounts which are subject to outstanding disputes. An allowance is provided against VAT and income tax receivable balances in dispute when we do not expect to eventually prevail in our recovery of such balances. We do not currently have any allowances provided against VAT and income tax receivables.
Long-lived Assets
We evaluate quarterly our long-lived assets for indicators of impairment. Indicators that an asset may be impaired are:
•the asset's inability to continue to generate income from operations and positive cash flow in future periods;
•loss of legal ownership or title to the asset;
•significant changes in its strategic business objectives and utilization of the asset(s); and
•the impact of significant negative industry or economic trends.
Management's judgments are based on market and operational conditions at the time of the evaluation and can include management's best estimate of future business activity, which in turn drives estimates of future cash flows from these assets. These periodic evaluations could cause management to conclude that impairment factors exist, requiring an adjustment of these assets to their then-current fair market value. Future business conditions and/or activity could differ materially from the projections made by management causing the need for additional impairment charges. We did not record any significant impairment charges during the first quarter of fiscal year 2026 related to the loss of legal ownership or title to assets; significant changes in the Company's strategic business objectives or utilization of assets; or the impact of significant negative industry or economic trends. Loss on disposal of assets recorded during the years reported resulted from improvements to operations and normal preventive maintenance.
Seasonality
Historically, our merchandising businesses have experienced holiday retail seasonality in their markets. In addition to seasonal fluctuations, our operating results fluctuate quarter-to-quarter as a result of economic and political events in markets that we serve, the timing of holidays, weather, the timing of shipments, product mix, and currency effects on the cost of U.S.-sourced products which may make these products more or less expensive in local currencies and therefore more or less affordable. Because of such fluctuations, the results of operations of any quarter are not indicative of the results that may be achieved for a full fiscal year or any future quarter. In addition, there can be no assurance that our future results will be consistent with past results or the projections of securities analysts.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risks relating to our operations result primarily from changes in interest rates and changes in currency exchange rates. There have been no material changes in our market risk factors at November 30, 2025 compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended August 31, 2025.
From time to time, we have experienced a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity). This impedes our ability to convert local currencies obtained through merchandise sales into U.S. dollars to settle the U.S. dollar liabilities associated with our imported products or otherwise fund our operations. For instance, since fiscal year 2017, we have experienced this situation in Trinidad and have been unable to source a sufficient level of tradable currencies. We are working with our banks in Trinidad and government officials to convert all of our Trinidad dollars into tradable currencies. Additionally, during fiscal year 2023, the Honduran Central Bank began limiting the availability and controlling the allocation of U.S. dollars for the conversion from Honduran lempiras to U.S. dollars. We are actively working with our banking partners and government authorities to address this situation. We have and continue to take additional actions in this respect. Refer to “Item 2. Management’s Discussion & Analysis – Factors Affecting the Business” and “Item 2. Management’s Discussion & Analysis – Liquidity and Capital Resources: Financial Position and Cash Flow” for our quantitative analysis and discussion.
Information about the financial impact of foreign currency exchange rate fluctuations for the three month period ended November 30, 2025 is disclosed in “Item 2. Management’s Discussion & Analysis – Other Expense, net.”
Information about the change in the fair value of our hedges and the financial impact thereof for the three month period ended November 30, 2025 is disclosed in “Item 1. Financial Statements: Notes to Consolidated Financial Statements, Note 8 – Derivative Instruments and Hedging Activities.”
Information about the movements in currency exchange rates and the related impact on the translation of the balance sheets of our subsidiaries whose functional currency is not the U.S. dollar for the three month period ended November 30, 2025 is disclosed in “Item 2. Management’s Discussion & Analysis – Other Comprehensive Income.”
ITEM 4. CONTROLS AND PROCEDURES
Limitations on Effectiveness of Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the timelines specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Evaluation of Disclosure Controls and Procedures
As required by SEC Rules 13a-15(e) or 15d-15(e), we carried out an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon their evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level.
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Changes in Internal Control over Financial Reporting
In the ordinary course of business, we review our system of internal control over financial reporting and make changes to our systems and processes to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems and automating manual processes. There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
The certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 are filed as Exhibits 31.1 and 31.2 to this report.
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PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are often involved in claims arising in the ordinary course of business seeking monetary damages and other relief. Based upon information currently available to us, none of these claims is expected to have a material adverse effect on our business, financial condition or results of operations. Refer to Part I. “Item 1. Financial Statements and Supplementary Data: Notes to Consolidated Financial Statements, Note 6 – Commitments and Contingencies” for additional information regarding our legal proceedings.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in Part I. “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2025. There have been no material changes in the Company’s risk factors from those discussed in Part I, Item 1A of the Company’s Annual Report Form 10-K for the fiscal year ended August 31, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a)None.
(b)None.
(c)Purchase of Equity Securities by the Issuer and Affiliated Purchasers.
Upon vesting of restricted stock awarded by the Company to employees, the Company repurchases shares and withholds the amount of the repurchase payment to cover employees’ tax withholding obligations. As set forth in the table below, during the quarter ended November 30, 2025, the Company repurchased 41,168 shares in the indicated months. These were the only repurchases of equity securities made by the Company during the first quarter of fiscal year 2026. The Company does not currently have a stock repurchase program. However, the Board of Directors could choose to commence a stock repurchase program in the future, at its discretion, after its review of the Company’s financial performance and anticipated capital requirements.
The following table sets forth information on our common stock repurchase activity for the quarter ended November 30, 2025:
| Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
| September 1, 2025 - September 30, 2025 | — | $ | — | — | N/A | |||||||||||||||||||||
| October 1, 2025 - October 31, 2025 | 41,168 | 123.15 | — | N/A | ||||||||||||||||||||||
| November 1, 2025 - November 30, 2025 | — | — | — | N/A | ||||||||||||||||||||||
| Total | 41,168 | $ | 123.15 | — | N/A | |||||||||||||||||||||
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5. OTHER INFORMATION
Rule 10b5-1 Trading Arrangements
On November 14, 2025 , Francisco Velasco , our Executive Vice President - Chief Legal Officer, Chief Risk & Compliance Officer, and Registered In-House Counsel , adopted a Rule 10b5-1 Trading Plan. Mr. Velasco’s Rule 10b5-1 Trading Plan provides for the sale of up to 1,352 shares of the Company's common stock during the period beginning on February 13, 2026 and ending December 31, 2026 .
During the first quarter of fiscal year 2026, except as described above, none of our other directors or executive officers adopted or terminated
ITEM 6. EXHIBITS
(a)Exhibits:
3.1(1) | |||||
3.2(2) | |||||
3.3(3) | |||||
3.4(4) | |||||
3.5(5) | |||||
3.6(6) | |||||
| 10.1* | |||||
| 10.2* | |||||
| 10.3* | |||||
| 10.4* | |||||
| 31.1* | |||||
| 31.2* | |||||
| 32.1*# | |||||
| 32.2*# | |||||
| 101.INS | Inline XBRL Instance Document. | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | ||||
# These certifications are being furnished solely to accompany this Report pursuant to 18 U.S.C. 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of PriceSmart, Inc. whether made before or after the date hereof, regardless of any general incorporation language in such filing.
(1)Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended August 31, 1997 filed with the Commission on November 26, 1997.
(2)Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended February 29, 2004 filed with the Commission on April 14, 2004.
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(3)Incorporated by reference to the Company’s Annual Report on Form 10-K for the year ended August 31, 2004 filed with the Commission on November 24, 2004.
(4)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on February 2, 2024.
(5)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on July 17, 2015.
(6)Incorporated by reference to the Company’s Current Report on Form 8-K filed with the Commission on December 9, 2022.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PRICESMART, INC. | |||||||||||
| Date: | January 7, 2026 | By: | /s/ DAVID N. PRICE | ||||||||
| David N. Price | |||||||||||
| Chief Executive Officer | |||||||||||
| (Principal Executive Officer) | |||||||||||
| Date: | January 7, 2026 | By: | /s/ GUALBERTO HERNANDEZ | ||||||||
Gualberto Hernandez | |||||||||||
Executive Vice President and Chief Financial Officer | |||||||||||
| (Principal Financial Officer and Principal Accounting Officer) | |||||||||||
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AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this “Amendment”) is dated as of September 4, 2025 (the “Effective Date”) and is entered into by and between PriceSmart, Inc. (the “Company”) and Paul Kovaleski (the “Executive”).
WHEREAS, the Company and the Executive entered into an Employment Agreement, dated as of January 1, 2024 (the “Agreement”);
WHEREAS, the Company and the Executive desire to amend the Agreement; and
WHEREAS, all capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. Amendment. Section 5(b) of the Agreement shall be amended by adding at the end thereof a new clause (iv) as follows:
(iv) As to each restricted stock award, restricted stock unit or similar equity award granted to the Executive by the Company that is outstanding and otherwise unvested on the Termination Date, and notwithstanding anything contained in the applicable award agreement or the Amended and Restated 2013 Equity Incentive Award Plan, as amended (or any successor equity compensation plan), to the contrary, the equity award will vest as of the Termination Date as to the number of shares scheduled to vest in the 12-month period following the Termination Date; provided that as to an award that is subject to performance-based vesting requirements, (A) vesting shall remain subject to satisfaction of the applicable performance criteria, and vesting shall not occur unless and until the applicable performance criteria are determined to have been met, and (B) Executive shall not be eligible for any increases in the number of shares covered by awards subject to performance-based vesting based on corporate performance above target levels.
2. Miscellaneous. Nothing in this Amendment shall constitute or be deemed to constitute an amendment of any provision of, or a waiver of the rights of any party under, the Agreement except as expressly set out in this Amendment. Except as specifically amended by this Amendment, all provisions of the Agreement shall remain in full force and effect. Upon the execution hereof, this Amendment and the Agreement shall constitute one agreement. The term “Agreement” as used in the Agreement shall mean the Agreement as amended by this Amendment. Upon the execution and delivery of this Amendment by each of the parties named on this signature pages hereof, this Amendment shall be deemed to be in full force and effect, and the terms and conditions herein shall be legally binding on each party hereto.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.
PRICESMART, INC.
By: /s/ GUALBERTO HERNANDEZ
Name: Gualberto Hernandez
Title: Executive Vice President and Chief Financial Officer
EXECUTIVE
/s/ PAUL KOVALESKI
Paul Kovaleski
AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this “Amendment”) is dated as of September 4, 2025 (the “Effective Date”) and is entered into by and between PriceSmart, Inc. (the “Company”) and Wayne Sadin (the “Executive”).
WHEREAS, the Company and the Executive entered into an Amended and Restated Employment Agreement, dated as of July 1, 2023, an Amendment to Employment Agreement, dated as of June 18, 2024, and an Amendment to Employment Agreement, dated as of June 17, 2025 (as amended, the “Agreement”);
WHEREAS, the Company and the Executive desire to amend the Agreement; and
WHEREAS, all capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. Amendment. Section 5(b) of the Agreement shall be amended by adding at the end thereof a new clause (iv) as follows:
(iv) As to each restricted stock award, restricted stock unit or similar equity award granted to the Executive by the Company that is outstanding and otherwise unvested on the Termination Date, and notwithstanding anything contained in the applicable award agreement or the Amended and Restated 2013 Equity Incentive Award Plan, as amended (or any successor equity compensation plan), to the contrary, the equity award will vest as of the Termination Date as to the number of shares scheduled to vest in the 12-month period following the Termination Date; provided that as to an award that is subject to performance-based vesting requirements, (A) vesting shall remain subject to satisfaction of the applicable performance criteria, and vesting shall not occur unless and until the applicable performance criteria are determined to have been met, and (B) Executive shall not be eligible for any increases in the number of shares covered by awards subject to performance-based vesting based on corporate performance above target levels.
2. Miscellaneous. Nothing in this Amendment shall constitute or be deemed to constitute an amendment of any provision of, or a waiver of the rights of any party under, the Agreement except as expressly set out in this Amendment. Except as specifically amended by this Amendment, all provisions of the Agreement shall remain in full force and effect. Upon the execution hereof, this Amendment and the Agreement shall constitute one agreement. The term “Agreement” as used in the Agreement shall mean the Agreement as amended by this Amendment. Upon the execution and delivery of this Amendment by each of the parties named on this signature pages hereof, this Amendment shall be deemed to be in full force and effect, and the terms and conditions herein shall be legally binding on each party hereto.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.
PRICESMART, INC.
By: /s/ GUALBERTO HERNANDEZ
Name: Gualberto Hernandez
Title: Executive Vice President and Chief Financial Officer
EXECUTIVE
/s/ WAYNE SADIN
Wayne Sadin
AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this “Amendment”) is dated as of September 4, 2025 (the “Effective Date”) and is entered into by and between PriceSmart, Inc. (the “Company”) and Francisco Velasco (the “Executive”).
WHEREAS, the Company and the Executive entered into an Employment Agreement, dated as of July 14, 2016 (the “Agreement”);
WHEREAS, the Company and the Executive desire to amend the Agreement; and
WHEREAS, all capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. Amendment. Section 5(b) of the Agreement shall be amended by adding at the end thereof a new clause (iv) as follows:
(iv) As to each restricted stock award, restricted stock unit or similar equity award granted to the Executive by the Company that is outstanding and otherwise unvested on the Termination Date, and notwithstanding anything contained in the applicable award agreement or the Amended and Restated 2013 Equity Incentive Award Plan, as amended (or any successor equity compensation plan), to the contrary, the equity award will vest as of the Termination Date as to the number of shares scheduled to vest in the 12-month period following the Termination Date; provided that as to an award that is subject to performance-based vesting requirements, (A) vesting shall remain subject to satisfaction of the applicable performance criteria, and vesting shall not occur unless and until the applicable performance criteria are determined to have been met, and (B) Executive shall not be eligible for any increases in the number of shares covered by awards subject to performance-based vesting based on corporate performance above target levels.
2. Miscellaneous. Nothing in this Amendment shall constitute or be deemed to constitute an amendment of any provision of, or a waiver of the rights of any party under, the Agreement except as expressly set out in this Amendment. Except as specifically amended by this Amendment, all provisions of the Agreement shall remain in full force and effect. Upon the execution hereof, this Amendment and the Agreement shall constitute one agreement. The term “Agreement” as used in the Agreement shall mean the Agreement as amended by this Amendment. Upon the execution and delivery of this Amendment by each of the parties named on this signature pages hereof, this Amendment shall be deemed to be in full force and effect, and the terms and conditions herein shall be legally binding on each party hereto.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.
PRICESMART, INC.
By: /s/ GUALBERTO HERNANDEZ
Name: Gualberto Hernandez
Title: Executive Vice President and Chief Financial Officer
EXECUTIVE
/s/ FRANCISCO VELASCO
Francisco Velasco
AMENDMENT TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (this “Amendment”) is dated as of September 4, 2025 (the “Effective Date”) and is entered into by and between PriceSmart, Inc. (the “Company”) and John Hildebrandt (the “Executive”).
WHEREAS, the Company and the Executive entered into an Amended and Restated Employment Agreement, dated as of March 22, 2023, and an Amendment to Employment Agreement, dated as of May 28, 2025 (as amended, the “Agreement”);
WHEREAS, the Company and the Executive desire to amend the Agreement; and
WHEREAS, all capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
NOW, THEREFORE, the Agreement is hereby amended as follows:
1. Amendment. Section 5(b) of the Agreement shall be amended by adding at the end thereof a new clause (v) as follows:
(v) As to each restricted stock award, restricted stock unit or similar equity award granted to the Executive by the Company that is outstanding and otherwise unvested on the Termination Date, and notwithstanding anything contained in the applicable award agreement or the Amended and Restated 2013 Equity Incentive Award Plan, as amended (or any successor equity compensation plan), to the contrary, the equity award will vest as of the Termination Date as to the number of shares scheduled to vest in the 12-month period following the Termination Date; provided that as to an award that is subject to performance-based vesting requirements, (A) vesting shall remain subject to satisfaction of the applicable performance criteria, and vesting shall not occur unless and until the applicable performance criteria are determined to have been met, and (B) Executive shall not be eligible for any increases in the number of shares covered by awards subject to performance-based vesting based on corporate performance above target levels.
2. Miscellaneous. Nothing in this Amendment shall constitute or be deemed to constitute an amendment of any provision of, or a waiver of the rights of any party under, the Agreement except as expressly set out in this Amendment. Except as specifically amended by this Amendment, all provisions of the Agreement shall remain in full force and effect. Upon the execution hereof, this Amendment and the Agreement shall constitute one agreement. The term “Agreement” as used in the Agreement shall mean the Agreement as amended by this Amendment. Upon the execution and delivery of this Amendment by each of the parties named on this signature pages hereof, this Amendment shall be deemed to be in full force and effect, and the terms and conditions herein shall be legally binding on each party hereto.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above.
PRICESMART, INC.
By: /s/ GUALBERTO HERNANDEZ
Name: Gualberto Hernandez
Title: Executive Vice President and Chief Financial Officer
EXECUTIVE
/s/ JOHN HILDEBRANDT
John Hildebrandt
Exhibit 31.1
Certification
I, David N. Price, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of PriceSmart, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | January 7, 2026 | /s/ DAVID N. PRICE | ||||||
| David N. Price Chief Executive Officer (Principal Executive Officer) | ||||||||
Exhibit 31.2
Certification
I, Gualberto Hernandez, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of PriceSmart, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | January 7, 2026 | /s/ GUALBERTO HERNANDEZ | ||||||
| Gualberto Hernandez Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||||||||
Exhibit 32.1
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of PriceSmart, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:
(i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended November 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Dated: | January 7, 2026 | /s/ DAVID N. PRICE | ||||||
| David N. Price Chief Executive Officer (Principal Executive Officer) | ||||||||
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
Certification of Chief Financial Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of PriceSmart, Inc. (the “Company”) hereby certifies, to such officer’s knowledge, that:
(i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended November 30, 2025 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Dated: | January 7, 2026 | /s/ GUALBERTO HERNANDEZ | ||||||
| Gualberto Hernandez Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||||||||
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.