PriceSmart Announces Positive December Results, Currency Challenges In Trinidad

PriceSmart Announces Positive December Results, Currency Challenges In Trinidad

PriceSmart, Inc. (NASDAQ: PSMT) today announced that for the month of December 2020, net merchandise sales increased 2.8% to $372.6 million from $362.3 million in December a year earlier. Foreign currency exchange fluctuations impacted net merchandise sales negatively by 3.1%, or $10.5 million, versus the same one-month period in the prior year. There were 47 warehouse clubs in operation at the end of December 2020 and 45 warehouse clubs in operation at the end of December 2019.

For the four weeks ended December 27, 2020, comparable net merchandise sales for the 43 warehouse clubs open at least 13 ½ full months decreased 1.7% when compared to the same period last year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by 2.9%, or $9.2 million, versus the same period in the prior year.

“In December, net merchandise sales grew despite increases in COVID-related cases and restrictions versus the prior month.  Comparable sales decreased primarily in Costa Rica, Panama, and Colombia where COVID cases and related restrictions were on the rise and because of sales transferred from existing clubs to newly opened clubs in Panama and Colombia. In December, we lost approximately 14 club days to closures where in-club shopping was prohibited.  Several clubs also contended with reduced operating hours, restrictions on segments of the population permitted to shop or circulate, limitations on the number of people allowed inside and restrictions on areas of our business such as food services and optical. In addition, sales declined in our Trinidad market, we believe, largely due to our decision to limit U.S. merchandise imports because of ongoing insufficient U.S. dollar liquidity. We are working on alternative solutions to mitigate the current illiquidity challenges,” said CEO Sherry S. Bahrambeygui.

    • Net Merchandise Sales grew 2.8%, after negative 3.1% FX impact
    • Comparable Net Merchandise Sales decreased 1.7%, after 2.9% negative FX impact
    • E-Commerce Penetration was 2.8% of Total Net Merchandise Sales

“Our Click & Go service, including curbside pickup and delivery, contributed approximately 2.8% of total net merchandise sales for the month. Delivery through Click &Go is now available in all of our markets, and the demand for delivery continues to grow as a portion of total Click & Go sales. Developing greater efficiencies remains a priority, especially within these new sales channels. We believe that Click & Go curbside and delivery services enabled by our new online platform, will remain important alternative shopping methods and will provide increased value for our members. Expanded online interaction with our members also yields opportunities for us to better access and analyze data to support merchandising decisions and enhance the connection with our members.”

Fiscal year to date, which includes the four months ended December 31, 2020, net merchandise sales increased 6.1% to $1,211.0 million from $1,141.0 million for the four months ended December 31, 2019. Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by 3.4% or $38.0 million versus the same four-month period in the prior year.

“On real estate, in early December we celebrated the grand opening of the new Usaquén Club, our third club in the greater metropolitan area of Bogota and located in the heart of a densely populated area. This is the second club we have successfully opened despite travel restrictions. Club Usaquen should drive sales growth, provide greater convenience and strengthen our presence in this market. In mid-December, we also announced that we plan to proceed with the construction of two new clubs, one each in Guatemala and Jamaica which are expected to open in fiscal year 2022.  As I’ve frequently noted, new club openings likely impact adversely our comparable net merchandise sales in the early stages. However, these locations provide strategic opportunities to grow incremental membership and sales and support our efforts to ensure that our members continue to enjoy our in-club uniquely curated selection of goods and services at great values,” added Bahrambeygui.

For the 17-week period ended December 27, 2020, comparable net merchandise sales increased 2.0% compared to the same 17-week period a year ago. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by 3.3% or $36.2 million versus the same prior year period.

“We are drawing upon the valuable experience gained through this last year and the systems that have been improved to enhance member experience, strengthen online capabilities and keep our employees and members safe. I’m proud of our team’s performance for navigating these developments and for continuing to strengthen our core capabilities during our busiest month of the year,” concluded Bahrambeygui.

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