PriceSmart, Inc.

Good afternoon, everyone, and welcome to Price Smart, Inc.'s earnings release conference call for the fourth quarter of fiscal year 2026, which ended on August 31st, 2026. 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, Tuesday, October 27th, 2026. A digital replay will be available following the conclusion of today's conference call through November 3rd, 2026 by dialing toll-free 1-833-309-1852 for domestic callers or 1-929- 828-5978 for international callers and by entering the replay access code 419-902-549. For opening remarks, I would like to turn the call over to Price Smart's Chief Financial Officer, Gualberto Hernandez. Please proceed, sir.

Thank you, operator, and welcome to Prisma, Inc.'s earnings call for the fourth quarter of fiscal year 2026, which ended on August 31, 2026. 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 26, 2026. 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.prismart.com, or 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, October 27, 2026. These statements are subject to risks and uncertainties that could cause actual results to differ materially, including the risks stated 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, Prismar's Chief Executive Officer.

Thank you, Gualberto, and good morning, everyone. Thank you for joining us today. I want to begin where I always do, with a big thank you to every one of our employees across our 14 countries, including our new team in Chile. This was a demanding year. Our teams worked through currency swings, economic and trade uncertainty, and natural disasters, while also rolling out new systems and processes inside the company. To our teams, your passion for serving our members is what made this year's results happen, and I'm deeply grateful. Before getting into the numbers, I want to take a moment to acknowledge the recent earthquakes that affected our communities in Colombia and Panama. Our thoughts are with everyone impacted. In Colombia, magnitude 7.4 earthquakes struck on August 10th, hitting Cali and Pereira hardest. We lost only a minimal number of operating hours, and all of our clubs are open today. Our teams moved quickly to restore inventory so our clubs could keep serving members and neighbors when they needed us most, and we temporarily opened our clubs in Pereira and Cali to non-members so more families could access essential goods. With the Price Smart Foundation and Price Philanthropies Foundation, we have collected more than 75 tons of essential products for distribution. In Panama, where a 7.7 magnitude quake struck on October 9th, our clubs came through without major impact. We launched Juntos por Panama so members could donate in-club and we provided critical supplies to the government's humanitarian hub. We will continue supporting recovery in both countries. I'm grateful to our employees in both countries who showed up for each other and their communities with care and resilience. Panama is where this company's story began. This month marks 30 years since we opened our first club in Panama City. Today, we serve almost 2.2 million member accounts through 59 clubs with more than 13,000 employees. Thank you to our members, our partners, and our team for three decades of trust. Now to the numbers. Our business achieved another strong quarter and fiscal year. In the fourth quarter, net merchandise sales reached almost $1.5 billion, with total revenue exceeding $1.5 billion. Net merchandise sales increased by 13.8% or 7.8% in constant currency. Comparable net merchandise sales in US dollars increased by 12.2%. and comparable net merchandise sales in constant currency increased by 6.2%. Three of our recent club openings, Quetzaltenango, La Romana and Ciudad Quesada are not yet included in our comparable sales numbers. For the fiscal year ended August 31, 2026, total net merchandise sales reached almost $5.8 billion and total revenues were almost $5.9 billion. Net merchandise sales increased by 11.7% or 8.4% in constant currency and comparable net merchandise sales increased by 9.6% or 6.4% in constant currency for the 12-month and 52-week periods respectively. During the fourth quarter, our average sales ticket grew by 7.5% and transactions grew by 5.9% compared with the fourth quarter of the prior fiscal year. For the full fiscal year, our average ticket grew by 4.2% and transactions grew 7.2% compared with the prior full year. Also, for the full fiscal year, the average price per item increased 5%, while average items per basket decreased 0.7% compared with the prior year. Overall, members came more often and they spent more when they did. Every one of our regions contributed to the growth we saw in the fiscal year. First, in Central America, where we had 32 clubs at quarter end, net merchandise sales for the fourth quarter increased 9.5% or 5.9% in constant currency with an 8% increase in comparable net merchandise sales or 4.4% in constant currency. Our Central America segment contributed approximately 480 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 15 clubs at quarter end, Net merchandise sales for the fourth quarter increased 9.9% or 8.4% in constant currency, and comparable net merchandise sales increased 6.7% or 5.3% in constant currency. 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 43.2% or 15.9% in constant currency, and comparable net merchandise sales increased 44.2% or 16.3% in constant currency. Colombia contributed approximately 560 basis points of positive impact to the growth in total consolidated comparable net merchandise sales for the quarter. Columbia's growth was again meaningfully influenced by the appreciation of the Colombian peso relative to the same period last year. Next, merchandising. Comparing our fourth quarter sales to the same period in the prior year, our foods category grew approximately 13.9%. Part of that growth comes from remodels of the fresh area in our clubs, which has given more selling space to those items. Fresh food is an important driver of visits to our clubs, and dedicating more space to those items is paying off. Our non-foods category increased approximately 13.8% with casual apparel posting the highest growth within non-foods. Our World Cup celebration was another great example with TV sales up 25%. Moving to other categories, our food service and bakery category increased approximately 13.5%. Our health services including optical, audiology, and pharmacy increased approximately 9.6%. One change to note, at the end of the fourth quarter we decided to discontinue audiology services in our clubs. and repurpose that space to selling merchandise. This lets us focus our health offering on optical and pharmacy where members visit more often. Turning to our member selection private label brand. This remains a powerful differentiator for Pricemart. Private label penetration on a comparable basis, excluding a reclassification of the produce category, increased 20 basis points year over year. Using our updated methodology, penetration of private label was 26.9% total merchandise sales. Member selection remains an important focus for us. In the fourth quarter, we added several new private label items. One to highlight is our member selection freeze-dried flavored coffee in Colombia, which had exceeded our expectations from the day it launched. Members choose it because it delivers quality and value that they can count on. We see this brand as a long-term competitive advantage, and we will continue to invest in expanding and improving the assortment in the years ahead. Now, membership. We serve almost 2.2 million member accounts, up 8.7% year over year. with over 4 million cardholders across our markets. Our trailing 12-month renewal rate was 90.4% for fiscal year 2026, up from 88.8% a year ago. That tells us members see the value we deliver and are choosing to renew year after year. Platinum is our premium tier, designed for our most engaged members. It costs more than our diamond tier, and in return, members get exclusive benefits and enhanced rewards. Platinum grew from 17.9% of our membership base at the end of fiscal 2025 to 23.4% at the end of fiscal 2026, a 550 basis point shift in one year. This was driven by our teams running targeted campaigns and delivering a membership experience that earns the upgrade. Fiscal year 2026 membership income reached $100.8 million, up 17.8%, driven primarily by higher platinum penetration. As a percentage of revenue, membership income was 1.7% in fiscal 2026, up from 1.6% in fiscal 2025. Now let me turn to the growth initiative shaping our next chapter, starting with our club network. In August, we opened our 10th warehouse club in Costa Rica, Ciudad Quesada, about 47 miles northwest of the nearest club in San Jose. The club sits on a six-acre site with a sales floor of roughly 42,000 square feet. We built it with sustainability in mind, including LED lighting, a CO2-based cooling system, and its own wastewater treatment plant. It's still early, but we're encouraged by the initial reception from members in the area. In the first quarter of fiscal year 2027, we opened 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 sits on a five-acre site and has a sales floor of roughly 42,000 square feet. We design and build it with similar sustainable standards as the Costa Rica Club. Looking further ahead, we have four other warehouse clubs currently in our pipeline. Our fourth location in Jamaica on South Camp Road in Kingston anticipated to open in December 2026. Our eighth club in Guatemala in Villanueva anticipated to open in late winter of 2027. Our 11th club in Costa Rica in Santo Tomas de Santo Domingo de Heredia, anticipated to open in spring of 2027. And our first club in Chile, located within the Mall Plaza Los Dominicos Shopping Center in Santiago's Comuna Las Condes, anticipated to open in spring of 2027. Once these four new clubs are open, we will operate 63 warehouse clubs in total. Chile represents a meaningful milestone for this company and a market we believe has significant long-term potential. We have entered into executory agreements for two additional potential sites beyond our first club, have hired a country general manager and a local buying team, established our central office, and are working to open a third party operated distribution center in fiscal year 2027 to support our operations there. We look forward to sharing more specific milestones as they develop. In addition to new club openings, we believe increasing club size and expanding parking at high volume locations are effective ways to drive sales. Improve efficiency and enhance the member experience. In line with this strategy, we have nearly completed the parking lot expansion in Via Brazil, Panama. Later in the fiscal year, we will begin the remodel of our Barbados Club, a parking lot expansion of our Aranda Club in Guatemala, and both a parking lot expansion and warehouse remodel of our Frijanes Club in Guatemala. In fiscal 2026, we open new distribution centers in Trinidad and Colombia. We also completed our third-party-run distribution centers in China during the second quarter, which consolidate merchandise source there, improving our net landed cost. Looking into fiscal 2027, we plan to open three more distribution centers in Jamaica, in the Dominican Republic, and in Chile, where it will be third-party operated. We are also completing the relocation of our cold regional distribution center, which began last fiscal year from a leased facility just down the road into our existing Miami Drive facility. Consolidating two sites into one. Next, let me walk through the technology work that continues to shape how we operate and serve our members. In our digital channel, sales reached $387.4 million in fiscal year 2026, up 26.3% year over year, and represented 6.7% of total net merchandise sales. Orders placed directly through our website or app grew 9.2%, and average transaction value increased 15.5% compared to last fiscal year. As of August 31, 2026, approximately 76.6% of our members had created an online profile, and 27.1% of our membership base has made a purchase on Pricemart.com or our app. Turning to RELX, our forecasting and replenishment system, Our international buying team is fully onboarded, setting up our local vendors in each country and some of the merchandise management pieces is taking longer than we expected. That means we will not finish by the second quarter of fiscal 2027 as previously communicated, but we are continuing to work towards completing implementation as soon as practicable. We still expect RELUX to help us keep products in stock and reduce spoilage, and we want to get it right. We believe this upgraded technology will enhance employee productivity, improve inventory management, reduce spoilage, and increase in-stock availability over the long run. We remain committed to getting this implementation right. On the human capital side, I'm pleased to report that the first phase of our Workday implementation was completed in the first quarter of fiscal year 2027 and is live for PriceSmart employees. This technology upgrade is enhancing the employee experience with modern, user-friendly tools while improving processes and efficiencies Strengthening compliance and providing scalable, integrated data to support future growth across our over 13,000 employees in 14 markets, including Chile. We continue to make good progress on membership omnichannel transformation, which we call MOT. We are building MOT to bring member identity, transaction history, and interaction data together in one place, so we have a single view of each member across our clubs and digital channels. That should improve data quality, reduce friction for members, and make our teams more efficient. It will also help us understand member preferences and trends so we can serve them better. Finally, turning to our point of sale transformation, Alera is now running in all of our English-speaking Caribbean clubs in Guatemala and, as of the end of September, in Costa Rica, our second Spanish-speaking country in Central America. We are completing the Dominican Republic now, and once it's done, every club in the Caribbean will be on Alera. Another first, our Montego Bay Club became the first club in the company to open with Alera at the registers from day one. Early indicators show Alera is delivering faster checkout times, improved employee productivity, and expanded payment options for our members, tangible improvements to the in-club experience. We are continuing the rollout of Alera across the remainder of our markets in Central America and Colombia, and based on the success we have seen to date, we are confident in the value Alera will deliver as implementation continues. Before I turn it over to Gualberto, I want to share how we're thinking about the external environment. The risks we're watching are increasingly interconnected rather than tied to a single country. The scenario we're most focused on is a combination of higher fuel, freight, and food costs. U.S. diesel prices have reached record levels. A very strong El Nino is forecasted through the winter, and global ocean shipping schedules have been unreliable. Capacity at the Panama Canal also remains something we're monitoring closely. These are broad external pressures that affect our competitors as well as Pricemart. For us, the more relevant question is how these pressures affect our specific cost structure and operating environment. If these pressures occur together, they could affect merchandise and transportation costs as well as local food prices. With that, I'll turn it over to Gualberto to continue the financial review. Thank you, David.