NET MERCHANDISE SALES GREW 10.7%
COMPARABLE NET MERCHANDISE SALES INCREASED
8.0%
$1.24 EARNINGS PER DILUTED SHARE &
ADJUSTED EARNINGS PER DILUTED SHARE
SAN
DIEGO, Jan. 9, 2024 /PRNewswire/ -- PriceSmart,
Inc. (NASDAQ: PSMT), operator of 53 warehouse clubs in 12 countries
and one U.S. territory, today announced results for the fiscal
first quarter of 2024, which ended on November 30, 2023.
First Quarter Financial Results
Total revenues for the first quarter of fiscal year 2024
increased 10.6% to $1.17 billion
compared to $1.05 billion in the
comparable period of the prior year. For the first quarter of
fiscal year 2024, net merchandise sales increased 10.7% to
$1.14 billion from $1.03 billion in the first quarter of fiscal year
2023. Net merchandise sales - constant currency increased 6.8% over
the comparable prior year period. Foreign currency exchange rate
fluctuations impacted net merchandise sales positively by
$40.0 million, or 3.9%, versus
the same period in the prior year.
The Company had 53 warehouse clubs in operation as of
November 30, 2023 compared to 50 warehouse clubs in operation
as of November 30, 2022.
Comparable net merchandise sales for the 50 warehouse clubs that
have been open for greater than 13 ½ calendar months increased 8.0%
for the 13-week period ended December 3, 2023 compared to the
comparable 13-week period of the prior year. Comparable net
merchandise sales - constant currency for the 13 weeks ended
December 3, 2023 increased 4.3%. Foreign currency exchange
rate fluctuations impacted comparable net merchandise sales
positively by 3.7% versus the same period in the prior year.
The Company recorded operating income during the fiscal first
quarter of $58.2 million compared to
operating income of $55.5 million in
the prior year period. Net income increased 15.5% to $38.0 million, or $1.24 per diluted share, in the first quarter of
fiscal year 2024 compared to $32.9
million, or $1.05 per diluted
share, in the first quarter of fiscal year 2023.
Adjusted net income for the first quarter of fiscal year
2024 was $38.0 million, or an
adjusted $1.24 per diluted share,
compared to adjusted net income of $35.0
million, or an adjusted $1.12
per diluted share, in the comparable prior year period.
Adjusted EBITDA for the first quarter of fiscal year 2024 was
$77.8 million compared to
$75.2 million in the same period last
year.
Note Regarding Non-GAAP (Generally Accepted Accounting
Principles) Financial Measures
The foregoing discussion of the Company's operating results
includes references to adjusted net income, adjusted net income per
diluted share, adjusted EBITDA, net merchandise sales - constant
currency and comparable net merchandise sales - constant currency,
which are non-GAAP financial measures. We believe these
supplemental measures are useful to investors and analysts because
they exclude items that we do not believe are indicative of our
core operating performance. These non-GAAP financial measures are
defined and reconciled to the most comparable GAAP measures later
in this document.
Conference Call Information
PriceSmart management will host a conference call at
12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Wednesday, January 10, 2024, to discuss the
financial results. Individuals interested in participating in the
conference call may do so by dialing toll free (888) 259-6580 or
(416) 764-8624 for international callers and asking to join the
PriceSmart earnings call. A digital replay will be available
shortly following the conclusion of the call through January 17, 2024 by dialing (877) 674-7070
for domestic callers, or (416) 764-8692 for international callers,
and entering replay passcode 833282#.
About PriceSmart
PriceSmart, headquartered in San
Diego, owns and operates U.S.-style membership shopping
warehouse clubs in Latin America
and the Caribbean, selling high
quality merchandise and services at low prices to PriceSmart
Members. PriceSmart operates 53 warehouse clubs in 12 countries and
one U.S. territory (ten in Colombia; eight in Costa Rica; seven in Panama; six in Guatemala; five in the Dominican Republic; four in Trinidad; three in Honduras and El
Salvador, two in Nicaragua
and Jamaica; and one each in
Aruba, Barbados and the United States Virgin Islands). In addition,
the Company plans to open a warehouse club in Santa Ana, El
Salvador in February 2024.
Once this new club is open, the Company will operate 54 warehouse
clubs.
This press release may contain forward-looking statements
concerning PriceSmart, Inc.'s ("PriceSmart", the "Company" or "we")
anticipated future revenues and earnings, adequacy of future cash
flows, omni-channel initiatives, proposed warehouse club openings,
the Company's performance relative to competitors and related
matters. These forward-looking statements include, but are not
limited to, statements containing the words "expect," "believe,"
"will," "may," "should," "project," "estimate," "anticipated,"
"scheduled," "intend," and like expressions, and the negative
thereof. These statements are subject to risks and uncertainties
that could cause actual results to differ materially including, but
not limited to: various political, economic and compliance risks
associated with our international operations, adverse changes in
economic conditions in our markets, natural disasters, volatility
in currency exchange rates and illiquidity of certain local
currencies in our markets, competition, consumer and small business
spending patterns, political instability, increased costs
associated with the integration of online commerce with our
traditional business, whether the Company can successfully execute
strategic initiatives, our reliance on third party service
providers, including those who support transaction and payment
processing, data security and other technology services,
cybersecurity breaches that could cause disruptions in our systems
or jeopardize the security of Member, employee or business
information, cost increases from product and service providers,
interruption of supply chains, novel coronavirus (COVID-19) related
factors and challenges, exposure to product liability claims and
product recalls, recoverability of moneys owed to PriceSmart from
governments, and other important factors discussed in the Risk
Factors section of the Company's most recent Annual Report on Form
10-K, and other factors discussed from time to time in other
filings with the SEC, which are accessible on the SEC's website at
www.sec.gov, including Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K. Forward-looking statements speak only as of
the date that they are made, and the Company does not undertake to
update them, except as required by law.
For further information, please contact Michael L. McCleary, EVP, Chief Financial
Officer and Principal Accounting Officer (858) 404-8826 or send an
email to ir@pricesmart.com.
|
PRICESMART, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(UNAUDITED AMOUNTS IN THOUSANDS, EXCEPT SHARE
DATA)
|
|
|
Three Months
Ended
|
|
November 30,
2023
|
|
November 30,
2022
|
|
Revenues:
|
|
|
|
|
Net merchandise
sales
|
$
1,135,014
|
|
$
1,025,463
|
|
Export sales
|
10,009
|
|
10,458
|
|
Membership
income
|
17,749
|
|
15,895
|
|
Other revenue and
income
|
3,703
|
|
2,990
|
|
Total
revenues
|
1,166,475
|
|
1,054,806
|
|
Operating
expenses:
|
|
|
|
|
Cost of goods
sold:
|
|
|
|
|
Net merchandise
sales
|
952,728
|
|
859,068
|
|
Export
sales
|
9,550
|
|
9,989
|
|
Selling, general and
administrative:
|
|
|
|
|
Warehouse club and
other operations
|
109,965
|
|
96,892
|
|
General and
administrative
|
35,439
|
|
33,172
|
|
Pre-opening
expenses
|
487
|
|
—
|
|
Loss on disposal of
assets
|
93
|
|
158
|
|
Total operating
expenses
|
1,108,262
|
|
999,279
|
|
Operating
income
|
58,213
|
|
55,527
|
|
Other income
(expense):
|
|
|
|
|
Interest
income
|
2,866
|
|
1,157
|
|
Interest
expense
|
(2,816)
|
|
(2,749)
|
|
Other expense,
net
|
(2,126)
|
|
(4,566)
|
|
Total other
expense
|
(2,076)
|
|
(6,158)
|
|
Income before provision
for income taxes and loss of unconsolidated affiliates
|
56,137
|
|
49,369
|
|
Provision for income
taxes
|
(18,153)
|
|
(16,426)
|
|
Income (loss) of
unconsolidated affiliates
|
63
|
|
(38)
|
|
Net income
|
$
38,047
|
|
$
32,905
|
|
Net income per share
available for distribution:
|
|
|
|
|
Basic
|
$
1.24
|
|
$
1.05
|
|
Diluted
|
$
1.24
|
|
$
1.05
|
|
Shares used in per
share computations:
|
|
|
|
|
Basic
|
30,269
|
|
30,713
|
|
Diluted
|
30,269
|
|
30,719
|
|
PRICESMART, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE
DATA)
|
|
|
November 30,
2023
(Unaudited)
|
|
August 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
174,452
|
|
$
239,984
|
|
Short-term restricted
cash
|
2,869
|
|
2,865
|
|
Short-term
investments
|
88,002
|
|
91,081
|
|
Receivables, net of
allowance for doubtful accounts of $62 as of November 30,
2023
and $67 as of August 31, 2023, respectively
|
17,645
|
|
17,904
|
|
Merchandise
inventories
|
529,898
|
|
471,407
|
|
Prepaid expenses and
other current assets (includes $3,532 and $0 as of
November 30,
2023 and August 31, 2023, respectively, for the fair value of
derivative instruments)
|
67,969
|
|
53,866
|
|
Total current
assets
|
880,835
|
|
877,107
|
|
Long-term restricted
cash
|
9,567
|
|
9,353
|
|
Property and equipment,
net
|
873,440
|
|
850,328
|
|
Operating lease
right-of-use assets, net
|
112,383
|
|
114,201
|
|
Goodwill
|
43,135
|
|
43,110
|
|
Deferred tax
assets
|
31,253
|
|
32,039
|
|
Other non-current
assets (includes $2,864 and $7,817 as of November 30, 2023
and
August 31, 2023, respectively, for the fair value of
derivative instruments)
|
68,123
|
|
68,991
|
|
Investment in
unconsolidated affiliates
|
10,543
|
|
10,479
|
|
Total Assets
|
$ 2,029,279
|
|
$ 2,005,608
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
Short-term
borrowings
|
$
9,199
|
|
$
8,679
|
|
Accounts
payable
|
522,568
|
|
453,229
|
|
Accrued salaries and
benefits
|
34,702
|
|
45,441
|
|
Deferred
income
|
33,932
|
|
32,613
|
|
Income taxes
payable
|
9,837
|
|
9,428
|
|
Other accrued expenses
and other current liabilities (includes $2,930 and $1,913 as of
November 30, 2023 and August 31, 2023, respectively, for
the fair value of derivative
instruments)
|
52,175
|
|
57,273
|
|
Operating lease
liabilities, current portion
|
7,508
|
|
7,621
|
|
Long-term debt, current
portion
|
35,276
|
|
20,193
|
|
Total current
liabilities
|
705,197
|
|
634,477
|
|
Deferred tax
liability
|
1,789
|
|
1,936
|
|
Long-term income taxes
payable, net of current portion
|
5,115
|
|
5,045
|
|
Long-term operating
lease liabilities
|
120,711
|
|
122,195
|
|
Long-term debt, net of
current portion
|
99,704
|
|
119,487
|
|
Other long-term
liabilities (includes $2,016 and $3,321 for the fair value of
derivative
instruments and $12,504 and $12,105 for post-employment plans as of
November 30,
2023 and August 31, 2023, respectively)
|
14,519
|
|
15,425
|
|
Total
Liabilities
|
947,035
|
|
898,565
|
|
Stockholders'
Equity:
|
|
|
|
|
Common stock $0.0001
par value, 45,000,000 shares authorized; 32,416,171 and
31,934,900 shares issued and 30,516,876 and 30,976,941 shares
outstanding (net of
treasury shares) as of November 30, 2023 and August 31,
2023, respectively
|
3
|
|
3
|
|
Additional paid-in
capital
|
500,795
|
|
497,434
|
|
Accumulated other
comprehensive loss
|
(160,412)
|
|
(163,992)
|
|
Retained
earnings
|
855,606
|
|
817,559
|
|
Less: treasury stock at
cost, 1,899,295 shares as of November 30, 2023 and 957,959
shares as of August 31, 2023
|
(113,748)
|
|
(43,961)
|
|
Total Stockholders'
Equity
|
1,082,244
|
|
1,107,043
|
|
Total Liabilities and
Equity
|
$ 2,029,279
|
|
$ 2,005,608
|
Reconciliation of Non-GAAP Financial Measures
The following tables calculate the Company's adjusted net
income, adjusted net income per diluted share, adjusted EBITDA, net
merchandise sales - constant currency and comparable net
merchandise sales - constant currency, all of which are considered
non-GAAP financial measures. Generally, a non-GAAP financial
measure is a numerical measure of a company's performance,
financial position or cash flows that either excludes or includes
amounts that are not normally excluded or included in the most
directly comparable measure calculated and presented in accordance
with GAAP. These measures are customary for our industry and
commonly used by competitors. 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.
The adjusted net income and adjusted net income per diluted
share metrics are important measures used by management to compare
the performance of core operating results between periods. We
define adjusted net income as net income, as reported, adjusted for
the write-off of certain Aeropost receivables. We define adjusted
net income per diluted share as adjusted net income divided by the
weighted-average diluted shares outstanding.
We believe adjusted net income and adjusted net income per
diluted share are useful metrics to investors and analysts because
they present more accurate year-over-year comparisons for our net
income and net income per diluted share because adjusted items are
not the result of our normal operations.
The following table shows the Company's reconciliation of net
income to adjusted net income and adjusted net income per diluted
share for the periods indicated:
|
Three Months
Ended
|
|
November 30,
2023
|
|
November 30,
2022
|
|
Net income as
reported
|
$
38,047
|
|
$
32,905
|
|
Adjustments:
|
|
|
|
|
Aeropost-related
write-offs (1)
|
—
|
|
2,125
|
|
Adjusted net
income
|
$
38,047
|
|
$
35,030
|
|
|
|
|
|
Net income per diluted
share
|
$
1.24
|
|
$
1.05
|
|
Aeropost-related
write-offs
|
—
|
|
0.07
|
|
Adjusted net income per
diluted share
|
$
1.24
|
|
$
1.12
|
|
|
(1)
Reflects $2.1 million of Aeropost-related write-offs in the first
quarter of fiscal year 2023.
|
Adjusted EBITDA
Adjusted EBITDA is defined as net income before interest
expense, net, provision for income taxes and depreciation and
amortization, adjusted for the impact of certain other items,
including interest income; other income (expense), net; and
Aeropost-related write-offs. The following is a reconciliation of
our Net income to Adjusted EBITDA for the periods presented:
|
Three Months
Ended
|
|
November 30,
2023
|
|
November 30,
2022
|
|
Net income as
reported
|
$
38,047
|
|
$
32,905
|
|
Adjustments:
|
|
|
|
|
Interest
expense
|
2,816
|
|
2,749
|
|
Provision for income
taxes
|
18,153
|
|
16,426
|
|
Depreciation and
amortization
|
19,494
|
|
17,568
|
|
Interest
income
|
(2,866)
|
|
(1,157)
|
|
Other expense,
net (1)
|
2,126
|
|
4,566
|
|
Aeropost-related
write-offs (2)
|
—
|
|
2,125
|
|
Adjusted
EBITDA
|
$
77,770
|
|
$
75,182
|
|
|
|
(1)
|
Primarily consists of
transaction costs of converting the local currencies into available
tradable currencies in some of our countries with liquidity issues
for the three months ended November 30, 2023. Primarily consists of
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, 2022.
|
|
(2)
|
Reflects $2.1 million
of Aeropost-related write-offs in the first quarter of fiscal year
2023.
|
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 exchanges 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 exchanges rates. Comparable net merchandise
sales - constant currency results exclude the effects of foreign
currency translation.
Net merchandise sales growth rate on a net merchandise sales -
constant currency basis is calculated as follows:
|
November 30,
2023
|
|
Three Months
Ended
|
|
Net
merchandise
sales
|
|
%
Growth
|
|
Net merchandise
sales
|
$
1,135,014
|
|
10.7 %
|
|
Favorable impact of
foreign currency exchange
|
39,990
|
|
3.9 %
|
|
Net merchandise sales
on a constant-currency basis
|
$
1,095,024
|
|
6.8 %
|
Comparable net merchandise sales growth rate on a net
merchandise sales - constant currency basis is calculated as
follows:
|
|
November 30,
2023
|
|
|
Three Months
Ended
|
|
|
%
Growth
|
|
Comparable net
merchandise sales
|
|
8.0 %
|
|
Favorable impact of
foreign currency exchange
|
|
3.7 %
|
|
Comparable net
merchandise sales on a constant-currency basis
|
|
4.3 %
|
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SOURCE PriceSmart, Inc.