PriceSmart, Inc.

Q1 2022 Earnings Conference Call


spk_0: good afternoon everyone and welcome surprise smart incorporated earnings release conference call for the first quarter of fiscal year two thousand and twenty two which ended on november thirtieth of two thousand and twenty one after a from summer companies representatives missouri baron baggy chief executive officer and michael mccleary chief financial officer you will be given an op written a test questions as time permits as a reminder this conference call is limited to one hour and is being recorded today friday january seventh two thousand and twenty two a digital replay will be available following the conclusion of today's conference call through january fourteenth of two thousand and it's one to buy darling one eight seven seven three four four seven five to nine for domestic callers him or one for one two three one seven zero zero eight eight for international callers and by entering the replay access code six zero one four four five six for opening remarks i would like to turn the color retail price more see financial officer michael mccleary please proceed sir
spk_1: thank you and welcome to the price mart earnings call for the first quarter of fiscal year two thousand twenty two we will be discussing the information that we provided in our earnings press release and are tend to which were both released yesterday afternoon january sixth two thousand twenty two you can find these documents on our investor relations website as investors that price mart dot com where you can also sign up for email alerts as a reminder all statements made on this conference call other than statement of historical fact or for looking statements concerning the company's anticipated plans revenues and related matters forward looking statements include but are not limited to statements containing the words expect believe plan will make sure estimate and similar expressions are or looking statements are based on current expectations and assumptions as of today january seven two thousand twenty two these statements are subject to risks and uncertainties that could cause cause actual results to differ materially including arrested tell them the company's most recent and a report on one ten k and other filings with the fcc which are accessible on the us is his website at www dot se si dot gov his risks maybe of data from time to time the company undertakes no obligation to update for looking statements made during the call now i will turn the call over to sure either i'm begging price marts chief executive officer
spk_2: a day everyone welcome to our earnings cause i hope you're starting twenty twenty two little with the same optimism that up here have for the new year the we have some great topic to cover today and as he can see from the results only had a very start first quarter of fiscal year cause that are no cars as supply chain disruptions they're not the results done by our team are very very solid so at now looking at the number of during the first quarter our total membership face has gone to a new record level with seven percent growth year over year and are twelve months membership or rate was buried eighty nine percent i have my number of the over the their prior comparable period and it's worth noting that results of this quarter and been compared to a quarter last year in which significant growth was achieved relative to the same quarter and fiscal year twenty the net merchandise sales increase twelve point six percent versus the same period last year with regard to a comparable sales to widen they increased nine point four percent versus the same period last year pricey continues to be a headwinds and impact a total and cop of on that merchandise sales by one percent are operating income for three point three percent and the first quarter of this fiscal year when compared to the same period last year and earnings for the first quarter great ten point one percent to thirty point five million dollars for of twenty seven point seven million dollars in the prior year period building deluded as basic rights the share of ninety eight cents in the third quarter of a society says in the prior year period now looking for the insecure sale we can report strong holiday sales with a comparable that merchandise sales for the for weeks at the december twenty sixth twenty twenty one ah they were at ten point one percent this was achieved by a negative pricey attacked at two point eight percent what's seen good momentum and are seen as well prepared to build on that momentum the now i'd like to talk a little bit about how with weakling broth short company with focused on three major drivers to blow our company the first is real estate opening new club and making investments in our distribution network to ensure that was statistically located in the right places to maximize efficiency in the supply chain second is enhancing the value of the membership and third is driving incremental sales for the company through our new platform christ like dot com and other digital capabilities the now let's briefly touched on some of our activities into those areas with regard to real estate you can see the actively seek opportunities to standard geographic footprints a brick and mortar warehouse club it is our intent to continue and even accelerate our current pace of club growth over the next three to five years and to continue to explore evaluate opportunities in new markets since the beginning of the pope cause a pandemic leave open for clubs cheers of clubs that just opened in the first quarter of fiscal twenty two the first others to is the around backlog and se guatemala city guatemala and it's sarkis club in guatemala i see allow attended the opening and with extremely pleased with the club or employees any of the offering we provide in that market and only about three months where things stand performance and good growth and membership and we see potential for even more clubs in guatemala in november during the first quarter that fiscal year i along with several members of our leadership team traveled to columbia to visit our club fair and evaluate the market we attended the opening up story that blanca a nightclub in columbia located near a book or a manga it felt really good to be back in our markets and it was quite necessary to see that local management team is doing an exceptional job i'm boys were positive and extremely grateful for how they think cared for protected during that's very difficult time we are working to increase our president and the colombian market although not yet and now we can share with you today that were under contract permitted have been issued a site publishers and away for a new club in the day columbia the site is in the center of a densely populated and going area of them again with very good demographics for our business i got to see it myself when i was there in november and were just extremely excited about the prospects for location assuming all goes as planned this club between we to at saint michel should open in the fall of twenty twenty three also as we previously shared the port night port more jamaica club couldn't progressing nicely we believe to make it is a strong market fresh and a cell generated out of our kingston club has been on in stuart lee record setting for that location now we're looking forward to the opening of port more in approximately april this year and that will mark the fiftieth club far company we've invested in our real estate sale and have more potential locations identified for potential new clutch in we've had in years of course the pipeline includes the tesla with various stages of evaluation they're due diligence but there's no doubt the positive results that would think that you're a club the increase in demand for our membership and the opportunity that we see to serve the needs of these markets responsibly and competitively as a strong motivator choke greece or wicked mortar presents and expand our geographic that pratt whitney a clutch hand in hand with our plans for club that is smart planning for distribution network and additional distribution centers a very tight so that we can most efficiently the quite about merchandise from that supplier to the member the it fails generated from the clouds are surprised mark dot com also the need for optionality in today's world has proven innocent so therefore we plan to make appropriate investments in our distribution network can maximize efficiency is minimized supply chain disruption and to provide optimal support for growing income business we also intend to expand our network that potus distribution centers and three that we currently right to sick sites are various stages of analysis and execution though expectancies eventual six plus it's a business that will allow us to serve local and regional produce to all of our current market he's distribution facilities such has also provide the opportunity to centralize certain production activities such as bakery meat processing and packaging and labeling all of which is intended to lead to greater efficiency as the scale up the numbers are clubs and salesman our markets and we continually evaluate how to land our merchandise that the lowest cost did he did we located distribution centers enable us to realize greater efficiency which results in better pricing sides against law failed and provides optionality to mitigate additional expenses associated with the fighting destruction the reality that while having to contend with nowadays yeah moving to our second driver for growth and he has been membership value at it's core of our business model is about making or value proposition so compelling go great it people choose to pay a membership to access what will provide the we are continually developing new ways to reduce costs and provide greater value examples include are direct farm program where we and and partner with local farmers to source better quality produce at a lower costs which we can lead past the said it onto the number another example is our private label program we are strong brand recognition and our market and a great reputation private label gives us the opportunity to get even greater value torn members so we plan to continue expanding are offering especially in the area hard and soft line private label also provides that the opportunities it's worth to sort quality items locally when appropriate the like local sourcing has a number of that effect on must be awful it's support local communities in which we operate by developing industry and creating direct and indirect jobs it can help mitigate as be at affects risk it reduces exposure to supply chain disruption and escalation of transportation costs so there are a number of reasons trust to continue investing in and expanding our private label including the fact that if the differentiator for at are given that it's our own grounds private label represented approximately twenty three point six percent of our merchandise sales in a in the first dad quarter ethical twenty two which is up from twenty two percent that a full year of for twenty one we also enhance membership valued by offering services that can enhance the quality of life or number and wellbeing initiative which continues to expand quietly offers an optical services and forty five clubs which free i exams for the number i'm an additional members of their families along with deeply discounted quality eyeglass blame ah we expect that we're going to be opening at least two more before the end of it's fiscal year and our optical his and has proven to be a great success on quora we provide audiology services is one of our newest star initiates initiative under the well being umbrella an elite provide the services in our outside of our guatemala club which free hearing exams for numbers and numbers of their family as well as deeply discounted hearing aid we expect to go out audiology to somewhere between a third and half of our clubs before the end of the fiscal year and we both in pharmacies and all eight of are close to read a club and also in charge of a lot pharmacy to more of our market members also benefit from the convenience services we provide such a curbside pick up a delivery options for purchasing i am part for purchases even our clicking doubt that form and so we continue to invest in an enhanced food services we also believe that a benefit of being a member is it needs to be trusted as company me are trusted and are working on on really cultivating that good well and trust i'd bet that comes from the fact that we put such emphasis on keeping our members stage and treating them responsibly during cold it and to this day we'd make a compelling prices and great value for numbers even inside the scarcity and supply chain and eruption a team that a great job of it certainly have the right amount of the right merchandise that the right place at the right price and at the right time for that we could not my failed and make available that good ah when are numbered needed that mouth so it's getting back driving membership value lead to a higher membership base the opportunity five the opportunity to increase the membership fee when appropriate and allows us to be a bath the membership fee to drive prices down which in turn them makes the membership even more valuable by adding more valuable benefit and habit only get a lot he expect membership set out to growl and for that can be on a a driver for for growth for a company the now turning to our third main driver oh and we are focused on generating incremental failed obama price mart dot com and other online capabilities now that doesn't mean that it's necessarily limited to the fails that are transacted online but by virtue of our presence online or we see opportunities to generate incremental failed both online and in our clubs as mentioned earlier we continue to invest in our development and evolution of pride my dot com and our technology tool that allows to engage and better analytic with the valuable resources they have with our membership data we're seeing positive sign an opportunity to go sales because of our online platform in fact i we found that members who shot both online and in club january spend more than comparable members who shop exclusively and club and que one outside my dot com in fun increasing sales transactions and penetration of total sales and the immediately preceding quarter we recently surpassed one point five million transactions on quite smart dot com and sales the a plasma dot com represented four percent of our first quarter sales up from three point five percent in the preceding quarter ah which with she for of f y twenty one however at once again it's important to emphasize that are online format in our club do not operate and silos high for dot com provide a great opportunity to knesset demonstrate our value proposition to our members the to format formats should reinforce each other to guide grader sales overall for the company the online platform provide convenient in fact fifteen percent of all new members in one signed up online it's also affected vehicle to provide information and offering that can help drive in clubs sales as well in addition to the price my dot com we have better connectivity with our members and a two way communication child that allows it to provide better customer service although our for an online platform and technology to have already become a significant part of how we do business and connect with our members we believe we have i'd kept opportunity to utilize his platform and the data it generates to effectively grow in from our failed oh wrapping up underlying all of these drivers growth and what makes any of this a reality is our people we've always been a company that puts our employees first but i must admit coveted the how it not only gave us an opportunity to prove it to our employees it can tell that to do than better one of the greatest tangible accomplishments in the last year which you don't see reflected necessarily in the numbers was to make sure that all of our employees at all levels of our company access to get health care no doubt it was a cost to had not previously occurred but i believe it is my the why the long term investment food late he appreciation loyalty and commitment expressed by or employees is palpable i firmly believe how we had shared fun place to is uncertain time is a major contributor to the results that we're talking about here today i want to thank our team for a great job on it's dollar quarter and i'll hand it back to my phone now thank you
spk_1: better sharif good morning or afternoon to everyone and thanks for joining us today before i began i would like to take this opportunity to thank our team members for their tremendous effort and dedication during the past quarter and holiday season our results are reflection about hard work and determination oh revenues a number to my sales for the quarter when nine hundred thirty five point four million dollars and nine hundred forty four million dollars respectively representing increases of eleven point two percent and four point six percent over the comparable per your period respectively including the club's reopening in around the guatemala in october and florida locker columbia november when this quarter with forty nine warehouse club compared to forty six whereas cause the end of the first quarter of fiscal two thousand twenty one and we're excited about our plans to reach the milestone fifty clubs and reopen our second club in jamaica and april two thousand twenty two we experienced a very strong opening out of the gate with rondo and membership sign of for our florida blocker club have been well ahead of our target we believe that this is further evidence that consumers move markets appreciate and embrace are unique business model are comparable number to no sales growth for fiscal first quarter was my point four percent for the thirteen weeks and in november twenty two thousand twenty one the country quarks rationed had a negative impact on both that merchandise i felt anger barrel of that much know cells are one hundred basis points are approximately eight point four million dollars and eight point five million dollars respectively i segment and central america where we had twenty seven closet quarter and networks my a sales increased fifteen point six percent with a fourteen point one percent increase in cumberland average myself all of our markets in central america had positive comparable number no sales growth with exceptional performance in the northern triangle countries of el salvador guatemala and honduras and the caribbean region where we had thirteen clubs a quarter and total number tonight sales increased five point four percent and comparable number tonight sales increased five percent the dominican republic jamaica and aruba are contributed double digit sales growth however the strong performance was partially offset by weakness i'm sure that where we have for clubs which side a sales decline of six point two percent in the first quarter this decline was primarily driven by are measured approach to rebalance or merchandise next find the reopening of economy at the end of our fiscal two thousand twenty one and december we began to see strong positive the again internet to the combination of rebalancing are in stock and and a levels strong year and a man and having lap the impact of our pull back on him and tory imports which began attacking sales in the summer two thousand twenty we are monitoring the evolution of the smarter closely but generally continue to manager and forced to be in line with him out of us dollars we expect a source internet in colombia where we had nine clause open as of the end of november number tonight sales increase sixteen point six percent and comparable numbers my sales declined to point eight percent a comparable networks merchandise sales decreased contributor bucks my thirty days points of negative impact to a comparable that merchandise sales for the quarter a decrease in colombia during the first quarter was primarily due to foreign currency devaluation with a relatively small in fact from sales transfers from existing closed due to a new political closet open in the second quarter of last year in terms of merchandise bizarre foods category grow nine percent compared to the same quarter on the prayer or cleaning beverages and liquor departments lead the way with nine percent thirty six percent and thirteen percent growth respectively our fresh category twelve percent compared to the same quarter in the prior year led by a poultry meat and seafood departments with twenty one percent eighteen percent at fifteen percent growth respectively our total nonsense category go through the three percent compared to the same quarter on the perrier or lines decline three percent however excluding tried out sales from both periods where the reduction of our imports negatively impacts your on your comparison our lines gruen two point nine percent or like seasonal christmas department enjoy a stronger down versus a prayer parade was ninety six percent growth ascetic some of the decline or other departments our satellite category grew up rocks my twenty percent with sales a casual tell grind twenty six percent and home furnishings right twenty four percent versus the same quarter last year lastly are other business category read that he was seventeen percent growth primarily from our food service and bakery departments buoyed by increased and club traffic turning the margins total gross margins on that merchandise sales came out at sixteen percent for the quarter which is substantially line with the sixteen point one percent margins are the same period last year total revenue margins decreased sixty basis points to seventy point four percent of total revenues when compared to the same period last year this decreases primary the result of fifty basis points of law revenue margins on our sales of our posts during the quarter as she an air expenses increased eleven point two million dollars compared to the prayer primarily due to the addition of three new clouds and our continued investment and technology and talent to sport continued growth a decreased by twenty basis points as a percentage of total revenue this decrease was primarily due to lower operating expenses after our sale and are opposed the impact of eliminating are opposed operating expenses was a forty basis point contribution to lower warehouse club and other expenses and attend basis point contribution to lower general and administrative expenses these combine cost savings that fifty basis points where offset by the fifty basis points lower margin contribution i mentioned previously therefore for the sale of a post how to basically neutral you're on your impact on operating income of pop operating income for the corner increase three percent from the same period last year to forty six million dollars that interest expense decrease zero point four nine dollars for the first quarter primarily due to the short term borrowings compared to the prior year period when we drew down on short term lines of credit as part of our efforts to secure adequate cash to cover contingencies arising from carbonated really interest we repaid all these borrowings by the end of the third quarter of fiscal two thousand twenty one other income of one point four million dollars was primarily driven by a pretax gain of two point seven million dollars from the or a post on an after tax basis the or post disposal resulted in a net contribution of five cents a vps during the quarter this pretext gain on disposal was partially offset by one point nine nine dollar loss associated with the cost to convert turnout dollars into other trouble currencies and the revaluation of monetary assets and liabilities and several of our markets or effective tax rate for the first quarter of fiscal two thousand twenty two came in higher than last year at thirty four point one percent versus thirty two point nine percent a year ago this increase of one point two percent is attributable to a comparably unfavorable net tax impact from on recurrent items a one point seven percent which primarily related to changes in uncertain tax positions are set by a comparable favorable benefits from returning items of zero point five percent primary resulting from changes in direction allowances on our foreign tax credits on a go for days as we continue this mate and analyzed effective tax rate of thirty three to thirty four percent and income for the first quarter of fiscal year two thousand twenty two was thirty point five million dollars or ninety eight cents per diluted share compared to twenty seven point seven million dollars or ninety cents per diluted share in a comparable fire period moving on to the balance sheet we enter the quarter with cash cash equivalents and restrict your cast telling one hundred ninety two point six million dollars a mccaskill perspective net cash used and operating activities decrease by four point four nine dollars compared to the prior year the decrease in that cashews is primarily a result of the increasing profits during the quarter when compared to the prayer what changes and operating assets and liabilities largely offsetting each other or inventory position as increased to five hundred and one nine dollars as a november thirtieth two thousand twenty one vs three hundred seventy three million dollars as of november thirtieth two thousand twenty this increase reflects our efforts to bring our inventory levels in line with ourselves trump and edition of to clubs versus the prior year period in addition we have made strategic investments and him into a to maintain adequate in stock levels on items that either have been are we expect maybe impacted from increased container transit times especially for merchandise calling from your in asia and commodity and electronic parts shortages net cash used in investing activities decreased by thirty eight point three million dollars compared to the prayer primarily due to their a decrease in purchases of certificates of deposit compared to the same three month period a year ago from a significant improvement or decrease in our balance of turnout dollars on hand of the barrier cashews than investing activities is also on that of approximately five million dollars a net cash proceeds from our disposal the outpost around the corner with respect to trinidad are balance of change that dog and on a a cash cash equivalents and short and long term investments measured in us dollars improves slightly during the quarter decrease in three million dollars part particle got two thousand twenty one and imbalanced are approximately forty nine point nine nine dollars it is part of our continued efforts to convert train our dollars to u s dollars and december two thousand twenty one we executed along whereby we say twenty five million us dollars the associated principal and interest on this longboat repaid in turn our dollars converted at rates and effect in the summer two thousand and twenty one over a four year period by locking and the conversion of a significant amount of turner dollars a car conversion rates and freeing up this cast and us dollars for deployment for general corporate purposes the twenty three point four million dollar change from cash use them to cash provided by financing activities his primary the results of higher debt repayments of short term debt compared to the same three month period a year ago when we were repaying short term facilities access to the early stages of the the ninety tenderness we consider to be vigilant about artist position and are ready to adapt to some changes in circumstances in closing we are very pleased with the results achieved during the first quarter of fiscal two thousand twenty two and believe that we are off to a good start to artist got second quarter driven by that can point one percent comparable networks no sales growth in december about she continues to be very strong and we believe we are well positioned to drive teacher go through real estate membership diet and further digital expansion through plasma dot com
spk_0: this achievement is a team effort and bobbing it's entire organization and their diligence to make price mart a key component our members lies i will not turn the call over to the operator to take your questions operator you may now start taking our colors questions think you will now begin the question and answer session to ask a question you may press story than one or you telephone keypad if you're using a speaker phone please pick up your handset before pressing the keys to withdraw your question please post or than to and at the time will pause momentarily to assemble roster
spk_3: and first question will come from john brats with kansas city capital please go ahead more michael moore sharing
spk_2: the morning and what's up i'm curious with with a cold case is rising again ah are you seen any indications and your markets that there might be a return to some operational restrictions that your stores
spk_4: at this point i would not see anything an act of significance however the cases are definitely right thing
spk_5: and i believe the
spk_2: that the at view is that this round may be different from prior rounds ah but we we don't know an end we are basically as as see i have mercy have the government officials who may decide to impose restrictions or not but on today we're not saying much of a difference and were prepared though regardless to the able to make sure that way
spk_6: we can get the goods that are members need to them in the most safe and and appropriate away no matter what the circumstances are
spk_7: doctors matchups and and michael be a it sounds like
spk_6: the trinity pretty trinidad getting a little bit better
spk_1: he wrote some like you're seen a little bit of sales improvement have have you adjusted prices according to the i know you raise prices to transfer the for the currency restrictions but i have you just a price in in trinidad the i guess i just started you could say we're cautiously optimistic gum in know we did have a little bit of a a buffer there in the in the queue for not not the reasons we wanted but because we had pull back on amateurs shipments because of the closures and we continue to receive dollars so that was how the big help to get you know in our fiscal que four to get those bounces back down closer to more historical levels but the by where you know we continue this he challenges they're so we haven't adjusted pricing at this point something or were actively monitoring were really matter i hear you need to tea or is a reporter we had one point nine nine dollar hit in in in and sourcing
spk_8: the fx during the quarter so we continue to the emperor cost associated and we've also now added this new law in which will as and financing costs over and over pretty excited about this new loan and says being a new vehicle to generate new dollars but we have not the fall back on the depression
spk_0: look at our thank you
spk_9: the next question will come from charlie carter with sarah decks please go ahead just trying to ban
spk_2: better understand the a general administrative costs a thank you all had alluded to hear the tower investments either and like real estate or i t or just other i to really spending and and there's i guess
spk_9: maybe to have insurance kind to might be part of that so just to trended to to make sure i understood that increase and then also like that kind of have a movie or near the medium term deal on kind of what what were you see that costs my night i'm going
spk_10: and i have a followup that's sucker
spk_1: yeah thanks yeah so so as i mentioned i've got a couple moving pieces in there is this quarter right with with got the reductions from from posts right so that though that's the kind of changes with you're on your aspects of us but as with mention i think last quarter and i think once we pull out the earth once we pull out the effects of their posts for kind of expecting that we're going to continue to investors usher should mention of things like healthcare with would mention road relatively or investments and talent on healthcare is just one example of that and and so we're continuing to invest in the time technology and we're hoping that and on that is cells are growing again that we can shave like that that you know percentages a part of sales and supposed to some of the do everything with had know if you include selling and they're obviously there's some distortions as when open due to new clergy you ramp up some prosper for new clubs and
spk_11: the for the overall caution earth to eschew in a and and so they it's manchester kind of more stabilized or insulin levels
spk_9: so is there am
spk_12: forgive me as their a ab target where you want to grow that's i mean i understand the i need to be some no one time investment in the business but as there you're just given year
spk_9: intended
spk_1: acceleration in real estate and rose store growth do you hope to can i keep a constant as a percentage of sales read think you can actually leverage it as you can leverage these real estate years is real see tell you that it on and in what the i t spending that will support dot com etc etc i guess the best i could say at this point is in the near term you know we're we're continuing to make the investments we it appropriate to have to have fun that growth it surely not have a pretty
spk_2: an expensive got growth by we have a over the next few years and as that growth comes to play them that certainly should help us leverage but in the near term and we're going to continue to make those investments of for that goes on okay time and a on that if if i can act as he helped in in recent years ah we have and basket and and i'm focused on the talent portion right now an elite invested and expertise in areas that the company really didn't have or need years ago
spk_13: on weed out for the first time in the last two years so have a chief technology officer on we have our on t v p level
spk_2: i ah professional who is out adapt that data analytics and helping us use the data is being mined from the investment and technology now that we can apply that in a way that allows us to make better decisions on respond more quickly on say in other areas as the business and help us grow and a very ah the disciplined way that with data to support our decisions so we tell us you know who is involved in the last two years and and as were not necessarily positions that were ah essential for a successful retail company but because of the airplane with technology and the way consumers behave now and how we expected to behave going forward either areas that are extremely important and on do you have the opportunity to lab rights and to be leveraged that the one thing about ah technology is set at it's not like another club freaked out by every time you build a new brick and mortar that there's a fixed costs associated with technology often has the opportunity to apply the same are tools across a larger scale without a cost going up so well there are opportunities to leverage the fight in the meantime we are making those investments that we feel are going to strengthen the foundation of the company for the long term these are things that we believe are essential and appropriate for us to be able to grow faster and stay ahead of the curve and be able to reach my numbers and and conduct our business
spk_9: smartly fell short term yeah there's gonna be watching it and dusting i'm but we we have our faith that each a wise investments that a bear fruit in the long run and and up our approach for the company yeah do you certainly are realizing at least the only early benefits of of that so i i'm i'm not disagreeing with or whether they're warranted i guess maybe just a
spk_14: a follow up in the night at did have one other question of that's okay but it how many years do you think though the it will you be kind of at an elevated level investments with the distribution centers and you're adding adding into the stores are like a new talk to the board what what are what are the expectations year
spk_2: am setting for them and terms of spending at a historically elevated level well as he that the more you grow our the more you wanna go grab the more you expand right ah so if you're if you're gonna open one club or year the spend is gonna be much lower than pathetically ten coetzee er en su su why expanded the new markets it you will likely be spending more so we are definitely i'm poised for growth and and it's difficult for me to tell you how long there's gonna be additional investments made that we're all gonna make those investments if we think we're gonna get a good return so i sat elevated expand really suggest that that work we believe that what we're investing in is going to help us grow and help us eyes you know increase our membership base increase or geographic footprint on and and generate more sales fell that the company can grow q it's potential fell in the meantime we we do take a measured approach but we're seeing enough sign that i want a level of confidence and our business model has a very specific purpose and wall especially in emerging markets and and not only do we have opportunity in some ways having gone through this that experience the think is a sense of responsibility he tells me his experience pile of business model and that the values that we hope that mechanics that we maintain really do help keep our members and supported their business is supported ah an and their the level of trust bed with big has been highlighted by this experience
spk_9: det the members have an end to the extent that we can continue to i generate good profits than and expand our reach to people who can benefit from our business model and and we can improve their lives that we intend to do so fair enough out just quickly done on the the real follow up question on our just for at the or for exchange like had wins for the piano do you are in at least attempt to kind of price for that and us doubt you know so at the so that the don't have margin the leverage on bad because i'm assuming at least some portion of your cost of goods you know originally was denominated in us dollars and so how do you have you all managed to that the had the in it analytics to do that well just yeah whatever you can see on pricing and the dems the transactional
spk_1: had went from from a stronger us dollar yeah thanks utterly erm yeah good good for up yeah we're we're very actively monitoring of affects them that we we basically know or whole business models car cost plus a model were you know we bring things in based on loan to the average courses increasing transportation or for costs more vendors whatever is coming and were constantly monitoring that on a weekly or monthly basis depending on know especially countries i columbia the has much volatility react remote or not and and reposting dynamically so you can see we've had pretty stable or margins of the last year especially and we're very much them and or very much on top of that and and repricing as we as as much we can as those
spk_15: bankruptcy currency fluctuates
spk_0: thank you for that
spk_2: this concludes our question and answer session would like to turn the conference back over to missouri been begging for any closing remarks please go ahead
spk_0: i just like to thank you all for joining us today and we are looking forward to twenty twenty two and out we had to that you'll join us again for the next quarter earnings off take care of i

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