PriceSmart, Inc. (NASDAQ: PSMT) today announced that for the month of March 2020 net merchandise sales increased 17.1% to $306.1 million USD from $261.5 million in March a year earlier. Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by $7.7 million or 2.5% versus the same one-month period in the prior year. There were 45 warehouse clubs in operation at the end of March 2020 and 41 warehouse clubs in operation at the end of March 2019.
PriceSmart is a US based warehouse club-type retailer similar to Costco or Sam’s Club that operates exclusively in Central America, Colombia, and The Caribbean, offering premium imported products often not otherwise found locally. The company has a close commercial relationship with Costco, and offers many of the same private-label store-brand products, such as Costco’s Kirkland & Member’s Selection lines.
Fiscal year to date, which includes the seven months ended March 31, 2020, net merchandise sales increased 7.0% to $1,956.5 million from $1,829.2 million for the seven months ended March 31, 2019. Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by $22.7 million or 1.2% versus the same seven-month period in the prior year.
Finance Americas visited the Medellín PriceSmart in the midst of the Coronavirus COVID-19 Pandemic (in full compliance with legal & health mandates) & found the store well stocked, with face masks for employees, and taking extra measures such as disinfecting every individual shopping cart for each customer, only allowing 1 person per membership to enter, and practicing social distancing in checkout lines.
PriceSmart is a US based warehouse club-type retailer similar to Costco or Sam’s Club that operates exclusively in Central America, Colombia, and The Caribbean, offering premium imported products often not otherwise found locally. The company has a close commercial relationship with Costco and offers many of the same private-label products, such as Costco’s Kirkland line.
“Although overall sales for the month of March 2020 increased significantly, driven by members stocking up primarily on food and essentials ahead of potential ‘shelter in place’ advisories, sales moderated and later decreased in the second half of the month. Toward the end of March, we experienced a noticeable reduction in traffic that we believe was driven by restrictive government mandates and consumer concerns about potential exposure,” said CEO Sherry Bahrambeygui.
“We are working proactively to make best of the situation. To facilitate social distancing, convenience for members and continued sales given the restrictions on our business, we have created alternative means for shopping, including an online catalog that enables our members to see, almost real-time, the availability of products for all clubs as well as curbside pickup and home delivery by us or in coordination with third-party delivery services. We also are launching online ordering and pick-up at club, which we refer to as ‘Click and Go.’ We continue to believe that PriceSmart is a premier shopping destination for our members, featuring fresh food, a curated collection of excellent merchandise at value prices and a variety of essential goods and services. However, we expect the impact of the pandemic and the related restrictions on our business to adversely affect traffic and sales over the next few months,” she added.
Costa Rica Opening Postponed, Jamaica & Colombia Store Developments Halted
Additionally, given the uncertainty surrounding the potential impact of the outbreak on our results of operations and cash flows, we are proactively taking steps to increase cash available on-hand, including, but not limited to, drawing funds on our short-term facilities and delaying strategic capital expenditures. We will complete the construction of our warehouse club in Liberia, Costa Rica in May 2020, but we have postponed its opening. Additionally, with respect to our previously announced future warehouse club openings on land that we have acquired in Bogota and Bucaramanga, Colombia and in Jamaica, we have decided, at this time, to suspend or not to initiate the construction of those clubs. We are considering and planning for additional cost savings measures in the U.S. and in the markets where we operate.
For the four weeks ended March 29, 2020, comparable net merchandise sales for the 41 warehouse clubs open at least 13 ½ full months increased 15.7% when compared to the same four-week period last year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $6.9 million or 3.0% versus the same period in the prior year.
For the 30-week period ended March 29, 2020, comparable net merchandise sales increased 2.6% compared to the same 30-week period a year ago. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $21.5 million or 1.2% versus the same prior year period.
Above photo: Finance Americas photographer Liliana Padierna. Photo credit: Loren Moss, 2017