PriceSmart, Inc.

Good afternoon, everyone, and welcome to Pricemark Inc's earnings release conference call for the first quarter of fiscal year 2026, which ended on November 30th, 2025. After remarks from our company's representatives, David Price, Chief Executive Officer, and Gualberto 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, Thursday, January 8, 2026. A digital replay will be available shortly following the conclusion of the call through January 15, 2026 by dialing 1-800-770-2030. for domestic callers or 1-647-362-9199 for international callers and entering replay access code 5898084. For opening remarks, I would like to turn the call over to Price Mart's Chief Financial Officer, Gualberto Hernandez. Please proceed, sir.

Thank you, operator, and welcome to Price Mart Inc.' 's earnings call for the first quarter of fiscal year 2026, which ended on November 30th, 2025. We will be discussing the information that we provided in our earnings press release and our thank you, which were both released yesterday, on January 7th, 2026. Also, in these remarks, we refer to non-GAAP financial measures. you can find a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP measures in our earnings press release and our thank you. These documents are available on our investor relations website at investors.pricemask.com, where you can also sign up for email alerts. As a reminder, all statements made on this conference call, other than statements of historical fact, 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, January 8, 2026. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks detailed in the company's most recent annual report, on Form 10-K, the quarterly report on Form 10-Q 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, Price Master Chief Executive Officer.

Thank you, Gualberto, and good morning, everyone. Thank you for joining us today. I want to begin by expressing my gratitude to our employees across all the regions where we operate. This first quarter through December represents our peak season, our most demanding period, and our teams rose to the challenge. From our clubs to our distribution centers to our offices across all of our countries, every part of our organization contributed to our success. Their execution was outstanding. Their dedication and commitment to serving our members continues to be the foundation of our success. It's a pleasure to be back with you for my second earnings call as CEO. I'm now about 128 days into the role, and I've spent this time visiting clubs, distribution centers, and offices across our markets. What strikes me most is the strength of our culture, teams across 13 countries united by a commitment to doing the right thing for our members and their communities. This foundation, combined with the opportunities ahead, gives me great confidence in our future. I'm energized by what we can accomplish together. I'm pleased to share that we delivered strong results across our key performance areas. Our membership growth, solid sales performance, and continued operational discipline reflect both resilient consumer demand and the outstanding execution by our teams. Now, I'd like to highlight some of our sales results for the first quarter. Net merchandise sales and total revenue reached almost $1.4 billion during the first quarter, Net merchandise sales increased by 10.6% or 9.5% in constant currency. Comparable net merchandise sales increased by 8% or 6.9% in constant currency. During the first quarter, our average sales ticket grew by 2.1%, and transactions grew 8.4% versus the same prior year period. The average price per item increased 1.8% year over year, while average items per basket remained relatively flat. First, in Central America, where we had 32 clubs at quarter end, net merchandise sales increased 9.6%, or 9.2% in constant currency. Comparable net merchandise sales increased 5.4%, or 5.1% in constant currency. All of our markets in Central America had positive comparable net merchandise sales growth. Our Central America segment contributed approximately 320 basis points of positive impact. so the growth in total consolidated to comparable net merchandise sales for the first quarter. Second, in the Caribbean, where we had 14 clubs at quarter end, net merchandise sales increased 5.7%, or 7.8% in constant currency. Comparable net merchandise sales increased 5.6%, or 7.7% in constant currency. All of our markets in the Caribbean had positive comparable net merchandise sales growth. Our Caribbean region contributed approximately 160 basis points of positive impact to the growth and total consolidated comparable net merchandise sales for the first quarter. Last, in Colombia, where we had 10 clubs open at the end of our first quarter, net merchandise sales increased 27.8% or 15% in constant currency. Comparable net merchandise sales increased 27.9% or 14.7% in constant currency. Colombia contributed approximately 320 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 first quarter sales to the same period in the prior year, our foods category grew approximately 11.3%. Our non-foods category increased approximately 7.2%, and our food service and bakery category increased approximately 10.1%. And our health services, including optical, audiology, and pharmacy, increased approximately 17.8%. Membership accounts grew 6.7% year-over-year to over 2 million accounts, with a strong 12-month renewal rate of 89.3% as of November 30th. A key focus of our membership strategy is growing Platinum memberships. Platinum is our premium tier designed for our most engaged members. These members receive an annual cash back reward on eligible purchases, which drives loyalty, increases purchasing frequency, and rewards their continued business with us. By focusing on Platinum growth, we are investing in our highest value member relationships. As of November 30th, Platinum accounts represented 19.3% of our total membership base, up from 14% in the same period last year. This growth reflects our targeted promotional campaigns and increased focus on this segment. Membership income as a percentage of revenue increased to 1.7% compared to 1.6% in the prior year period, driven in part by the shift towards Platinum membership. These strong results reflect our team's execution and the strategic initiatives we have underway. Let me walk you through the progress we're making across real estate expansion, supply chain transformation, and technology investments that are enhancing our ability to serve our members. In the third quarter of fiscal year 2025, we purchased land for our sixth warehouse club in the Dominican Republic, in La Romana. That's about 73 miles east of our nearest club in Santo Domingo. The club will be built on a five-acre property and is expected to open in spring 2026. In Jamaica, we're expanding from two clubs to four. In the first quarter of fiscal year 2026, we purchased land in Montego Bay for our third club, and that's about 100 miles west of Kingston. This will also be a five-acre site anticipated to open in fall 2026. Also in the first quarter of fiscal year 2026, we finalized the land lease for our fourth Jamaican club on South Camp Road. That's about six miles from our existing Kingston club. This will be a three-acre property, also anticipated to open in winter 2026. The opening timeline for our Jamaica clubs has been adjusted as we address operational disruptions caused by Hurricane Melissa and support recovery efforts across the island. I'm pleased to report that our existing clubs in Kingston and Portmore weathered the storm well and were back serving members almost immediately. We do not anticipate any further delays to our new club openings at this time. In addition, in the second quarter of fiscal year 2026, We purchased land for our 10th warehouse club in Costa Rica in Ciudad Quesada. That's approximately 47 miles north from our nearest club in Costa Rica. The club will be built on a six-acre property and is anticipated to open in fall 2026. Once these four new clubs are open, we will operate 60 warehouse clubs in total. We are advancing on our plans to enter Chile, a market we believe offers strong potential for multiple price mark warehouse clubs. As part of this initiative, as you know, we've hired a country general manager and signed executory agreements for two prospective club sites. While we haven't announced target opening dates, we're moving quickly and managing key factors that influence timing, 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 will begin warehouse club and parking lot expansion and remodels in fiscal year 2026 in Portmore, Jamaica, and Barbados. Now, turning 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, Panama, and Guatemala. During the first quarter, we successfully adapted our Panama facility to handle cold merchandise and began operations at our new distribution center in Guatemala. We now plan to open distribution centers in Trinidad, Colombia, and the Dominican Republic during fiscal year 2026. Our goals with these distribution centers are to improve product availability, reduce lead times, and lower landed costs, among other efficiency gains. Alongside these new distribution centers, We've begun implementing third-party distribution centers in China to consolidate merchandise sourced in the country, driving greater efficiency and lowering costs. In select countries, we've also introduced our own fleet of trucks to deliver merchandise directly to our clubs and capitalize on backhaul opportunities. We continue to advance our migration to the RELAX forecasting and replenishment platform, and we remain on track to complete full implementation 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. 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. Turning now to other ways we are enhancing membership. For the first three months of fiscal year 2026, private label sales represented 27% of total merchandise sales, down 70 basis points from the same period last year. This was impacted by a reclassification of the produce category, and on a comparable basis, we would have had a 70 basis point increase in penetration of our private label. Our private label brand member selection is a cornerstone of our strategy. What makes our private label program unique is that we develop products both centrally through our U.S. buying team and locally through our country-based buyers. This development approach enables us to source private label products globally, regionally, and locally, providing flexibility to deliver the best quality and value. Together, this allows us to offer member selection products that combine global scale and quality with local relevance. Private Label serves multiple strategic purposes. It allows us to offer high-quality products at lower prices than national brands, driving member loyalty. It improves our margins. And it gives us leverage with national brand suppliers by providing a trusted alternative that keeps them competitive. We're committed to growing this penetration through strategic product development, For example, recent additions like organic maple syrup, aged scotch whiskey, and premium deli meats demonstrate our focus on delivering exceptional value across key categories. In the Dominican Republic, we've enhanced our co-branded consumer credit card with our new partner, Banco Santa Cruz, which launched in November 2025. This new agreement offers 6% cash back at Pricemark clubs, adding even more value for our members in that market. We continue to invest in omnichannel capabilities to meet our members where they are. In the first quarter, digital channel sales reached $89.8 million, up 29.4% year over year, representing 6.6% of total net merchandise sales. This marks our highest digital contribution to date. Orders placed directly through our website or app grew 18.1%, with average transaction value up 10.1%. As of November 30th, 73% of our members had created an online profile and 27.1% of our membership base has made a purchase on Pricemark.com or our app. We see continued opportunity in this space and we'll keep investing to enhance the digital experience we offer our members. During the first quarter, we began migrating our mobile application to fully native iOS and Android architectures to enhance speed, reliability, and accessibility. This foundation will allow faster deployment of new features and help us deliver an outstanding member experience in our digital channels. Turning to technology investments that enhance both member and employee experience and operational efficiency. In the first quarter, we completed implementation of our new point of sale system, Alera, a Toshiba product in all English-speaking Caribbean markets. Later in fiscal year 2026, we will 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, 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 and strengthening compliance. Additionally, the platform will provide scalable, integrated data to support our future growth. Before I turn it over to Gualberto, I want to address a few additional topics. First, regarding US tariffs, approximately half of the merchandise we sell is sourced locally and regionally within Latin America. The other half is sourced from the US, Europe, China, and globally. While we consolidate many of these products through our Miami distribution center, they are shipped in bond and are not nationalized in the United States. We also take advantage of free trade agreements where we can. Additionally, we've been leveraging our expanding distribution center network and China consolidation capabilities to shift direct to market where feasible, further optimizing our supply chain. As a result, U.S. import tariffs do not apply to most of our merchandise. We continue to monitor the evolving trade policy environment, but to date, current U.S. tariff policy has not impacted our cost structure or business operations. We are also monitoring remittance flows to Latin America and the Caribbean. Remittances represent a significant portion of GDP in several of our markets, including Jamaica, Honduras, El Salvador, Guatemala, and Nicaragua. While there has been reporting on changing remittance patterns from the U.S. to the region, to date we have not seen changes in consumer demand or purchasing behavior in our clubs. We continue to watch this factor closely given its importance to the economies we serve. In addition, over the weekend, there was major news out of Venezuela. We are alert and monitoring the situation closely. It's still very early to understand how this will evolve or what the implications might be for our business or for U.S. companies operating in the region. And lastly, I want to provide a preview of our holiday season performance. Comparable net merchandise sales for the nine-week period ended December 28, 2025, grew 7.1% in U.S. dollars and 5.4% in constant currency. This represents solid performance as we continue to comp against increasingly strong prior year periods, though it does reflect the deceleration from our first quarter's growth rate. December specifically was impacted by several transitory factors. Government elections in Honduras created consumer uncertainty. Panama's extended rainy season disrupted both traffic and logistics. and supply chain timing issues created out-of-stocks in several high-volume food items, a situation we identified and are addressing. Looking forward, we are encouraged by what we are seeing. Colombia continues to deliver strong momentum, and we are seeing positive trends across many of our markets as we enter calendar 2026. With that, I'll turn it over to Gualberto to walk you through the financial details.