PriceSmart, Inc.

Good afternoon, everyone, and welcome to PriceSmart, Inc.' 's earnings release conference call for the fourth quarter of fiscal year 2025, which ended on August 31st, 2025. After remarks from our company's representatives, David Price, Chief Executive Officer, and Walberto Hernandez, Chief Financial Officer, you will be given an opportunity to ask questions as time permits. As a reminder, this conference call is limited to one hour and is being recorded today, Friday, October 31st, 2025. A digital replay will be available following the conclusion of today's conference call through November 7th, 2025 by dialing 1-800-770-2030 for domestic callers or 1-647-362-9199 for international callers and by entering the replay access code 5898084. For opening remarks, I would like to turn the call over to Pricemart's Chief Financial Officer, Walberto Hernandez. Please proceed, sir.

Thank you, operator, and welcome to Pricemart Inc.' 's earnings call for the fourth quarter of fiscal year 2025, which ended on August 31, 2025. We will be discussing the information that we provided in our earnings press release and our 10-K, which were both released yesterday afternoon, October 30, 2025. Also, in these remarks, we refer to non-GAAP financial measures. You can find the reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures in our earnings press release and our 10-K. These documents are available on our investor relations website at investors.pricematter.com, where you can also sign up for email alerts. As a reminder, all statements made on this conference call, other than statements historically filed, are forward-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, may, should, estimate, and some other expressions. All forward-looking statements are based on current expectations and assumptions as of today, October 31st, 2025. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks detailed in the company's report on Form 10-K filed yesterday and other filings with the SEC, which are accessible on the SEC's website at www.sec.gov. These risks may be updated from time to time. The company undertakes no obligation to update forward-looking statements made during this call. Now, I will turn the call over to David Price, PriceMart's Chief Executive Officer.

Thank you, Gualberto, and good morning, everyone. I'd like to start by expressing my sincere gratitude to the entire PriceMart team. This is the first earnings call for both Gualberto and me in our new roles, and we're excited to be here with our shareholders. We're settling in well and energized by the opportunities ahead. I also want to thank Robert Price, our executive chairman, for his invaluable leadership during his multiple tenures as CEO, especially his most recent one. In his current role, Robert and I are working closely together, and I'm deeply appreciative of the productive, positive, and collaborative relationship we have built. This year's results reflect the passion and dedication of our teams across clubs, distribution centers, and offices in 13 countries, working together to serve our members. We saw strong momentum in membership, sales, and income, driven by the commitment of our teams across digital, supply chain, merchandising, and operations. They delivered on our mission and provided the value our members expect. Since stepping into the CEO role on September 1st, I've had the opportunity to visit many of our clubs, distribution centers, and offices. What I've seen firsthand makes me incredibly optimistic about the future of Pricemart. But most importantly, I continue to be inspired by the passion and dedication of our teams throughout the regions we serve. I'm also excited to share a major milestone for the company. We have officially moved into our new corporate headquarters in San Diego. This move represents a meaningful step forward, providing us space designed to foster the kind of culture and ways of working that will support our people and mission for years to come. Now, let's turn to the key factors and strategic priorities we are focused on to continue driving sales and delivering greater value to our members, starting with real estate. In August 2025, we opened our seventh warehouse club in Guatemala, located in Quetzaltenango. In the third quarter of fiscal year 2025, we purchased land for our sixth warehouse club in the Dominican Republic, in La Romana, about 73 miles east of the nearest club in Santo Domingo. The club will be built on a five-acre property and is expected to open in spring 2026. In the first quarter of fiscal year 2026, we purchased land for our third warehouse club in Jamaica, located in Montego Bay, about 100 miles west of the nearest club in Kingston. This club will also be built on a five-acre site and is anticipated to open in summer 2026. Additionally, we executed a land lease for our fourth warehouse club in Jamaica, located on South Camp Road, about 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 fall of 2026. Once these three new clubs are open, we will operate 59 warehouse clubs in total. Before I continue, I want to take a moment to acknowledge the impact of Hurricane Melissa on our team members, their families, and our members in Jamaica, the Dominican Republic, and across the region. Our thoughts are with everyone affected, and we remain committed to supporting recovery efforts and ensuring the safety and well-being of our people and communities. Our operations in Jamaica were affected by both the preparations for and the impact of the storm's landfall, resulting in the closure of our Jamaica clubs for a couple of days earlier this week. I'm deeply grateful for the dedicated efforts of our team, and with those efforts, we were able to reopen our clubs on Wednesday, October 29th. Going forward, our focus continues to be the safety of our employees and our members. We're advancing on our plan to enter Chile, a market we believe offers strong potential for multiple Pricemart warehouse clubs. As part of this initiative, we've hired a country general manager and signed an executory agreement for a prospective club site. While we haven't announced a target opening date, we're moving quickly and managing key factors that influence our opening date, such as permitting and construction. In addition to opening new clubs in existing markets and Chile, we're continuing to optimize our current footprint. Increasing club size, improving efficiency, and expanding parking spaces at high volume locations remain some of the most effective ways to drive sales and enhance the member experience. To support this strategy, we'll begin expansions and remodels at select clubs and parking lots across our markets in fiscal year 2026. Now moving to our supply chain transformation strategy. One of the key drivers in keeping prices low is improving how we move and distribute merchandise to our clubs. Today, we operate major distribution centers in Miami, Costa Rica, and Panama. In the first quarter of fiscal year 2026, we adapted our Panama facility to handle cold merchandise and began operations at a new dry distribution center in Guatemala. Looking ahead, we plan to open price-front-run distribution centers in Trinidad and the Dominican Republic during fiscal year 2026. These local facilities are expected to improve product availability, reduce lead times, and lower landed costs, among other Alongside these new distribution centers, we've begun implementing third-party distribution centers in China to consolidate merchandise sourced in the country, driving greater efficiencies and lowering costs. We're also exploring additional ways to enhance logistics in multi-club markets by leveraging a mix of price-managed and third-party operations. Finally, in select countries, we've introduced our own fleet of trucks to deliver merchandise directly to the clubs and capitalize on backhaul opportunities. In fiscal year 2025, we made significant progress migrating to our new forecasting and replenishment system, the Relics platform. While we didn't complete implementation as originally anticipated, we remain on track and expect to finalize the migration in fiscal year 2026. This upgrade is a critical part of our supply chain strategy and is expected to boost productivity, improve inventory management, and increase in-stock availability, ultimately driving sales growth and operational efficiency. Turning now to other ways we're enhancing memberships. Our private label brand member selection is a cornerstone of our strategy and a key differentiator in our product mix. These products are crafted to deliver high quality at competitive prices, offering our members exceptional value without compromise. During fiscal year 2025, private label sales represented 28.1% of total merchandise sales, up 50 basis points from 27.6% in the comparable period of fiscal year 2024. Some of the top-selling private label items this year included shredded mozzarella cheese, hypoallergenic baby wipes, and cold-extracted extra virgin olive oil. In Central America, we've renewed and enhanced our co-branded consumer credit card with Banco Credomatic, BAC, which launched in July 2025. This new agreement offers higher cashback rewards on purchases at Pricemark, Pricemark.com, on BAC's travel program, and other retailers and services, adding even more value for our members in that region. We continue to invest in omnichannel capabilities to meet our members where they are. Digital channel sales reached $306.7 million in fiscal year 2025, up 21.6% year over year, and represented 6% of total net merchandise sales. Orders placed directly through our website or app grew 22.4%, and average transaction value increased 3.7% compared to last fiscal year. As of August 31st, 2025, Approximately 60.1% of our members had created an online profile, and 32.4% of our membership base has made a purchase on Pricemart.com or our app. We see continued opportunity in this space, and we will keep investing to enhance the digital experience we offer our members. For example, in fiscal year 2026, we will begin migrating our mobile application to fully native iOS and Android architecture to enhance speed, reliability, and accessibility for our members. This foundation will allow faster deployment of new features and help us deliver an outstanding member experience in our digital channels. In the first quarter of fiscal year 2026, we expect to complete implementation of our new point of sale system, Alera, a Toshiba product, in all English-speaking Caribbean markets. Later in fiscal year 2026, we'll begin rolling out this system in our Spanish-speaking markets. Alera will help us achieve faster checkout times, improve productivity, and expand payment options, among other benefits. Also in the first quarter of this fiscal year, 2026, we began implementing Workday's human capital management system to replace legacy HR 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 our future growth. Now I'd like to highlight some of our sales results, starting with a strong fourth quarter. Net merchandise sales and total revenue were both over $1.3 billion in the fourth quarter. Net merchandise sales increased by 9.2% or 9.1% in constant currency. Comparable net merchandise sales in U.S. dollars and constant currency both increased by 7.5%. For the fiscal year ended August 31st, 2025, total net merchandise sales reached almost $5.2 billion and total revenues were almost $5.3 billion. Net merchandise sales increased by 7.7% or 8.5% in constant currency. And comparable net merchandise sales increased by 6.7% or 7.5% in constant currency for the 12-month and 52-week periods, respectively. During the quarter, our average sale ticket grew by half a percent and transactions grew 8.7% versus the same prior year period. For the 12-month period, our average ticket grew by 1.7% and transactions grew by 5.9% versus the prior year. The average price per item remained relatively flat year over year, while average items per basket increased approximately 1.7% compared to the prior year. Now looking at our business by segment. First, in Central America, where we had 32 clubs at quarter end, net merchandise sales for the fourth quarter increased 8.9%, or 8% in constant currency, with a 6% increase in comparable net merchandise sales, or 5.3% in constant currency. Additionally, we opened our ninth warehouse club in Costa Rica in April 2025 and our seventh warehouse club in Guatemala in August 2025, resulting in our high single-digit net merchandise sales growth. Although lower than net merchandise sales, all our markets in Central America had positive comparable net merchandise sales growth, validating the strong demand we're seeing in the region. Our Central America segment contributed approximately 360 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter. Second, in the Caribbean, where we had 14 clubs at quarter end, net merchandise sales for the fourth quarter increased 6.3% or 7.5% in constant currency. And comparable net merchandise sales increased 6.5% or 7.8% in constant currency. All of our markets in this segment had positive comparable net merchandise sales growth. Our Caribbean region contributed approximately 180 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter. Last, in Colombia, where we had 10 clubs open at the end of our fourth quarter, net merchandise sales for the fourth quarter increased 18.2%, or 18.7% in constant currency, and comparable net merchandise sales increased 18.3%, or 18.8% in constant currency. Columbia contributed approximately 210 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter. In terms of merchandise categories, when comparing our fourth quarter sales to the same period in the prior year, Our foods category grew approximately 7.6%. Our non-foods category increased approximately 7.9%, and our foods, services, and bakery category increased approximately 7.5%. Our health services, including optical, audiology, and pharmacy, increased approximately 17%. Membership accounts grew 6.2% year-over-year to over 2 million. Platinum membership represented 17.9% of our total base as of August 31st, 2025. That's up from 12.3% at the end of the prior year. This growth reflects our increased focus on the segment through targeted platinum promotional campaigns. Fourth quarter membership income reached $22.6 million, a 14.9% increase over the same period last year. driven by higher platinum penetration and a $5 annual fee increase for all membership types implemented gradually across fiscal year 2024 in all but one market. We continued with a strong 12-month renewal rate of 88.8% for fiscal year 2025. With that, I'll turn it over to Gualberto to continue the financial review.