PriceSmart Announces Fiscal 2020 Fourth Quarter and Full Year Operating Results 





San Diego, CA (October 29, 2020) - PriceSmart, Inc. (NASDAQ: PSMT), operator of 46 warehouse clubs in 12 countries and one U.S. territory, today announced its results of operations for the fourth quarter and full year, which ended on August 31, 2020.



Comments from Sherry S. Bahrambeygui, Chief Executive Officer:



“PriceSmart’s results of operations for the fourth quarter and fiscal year 2020 were strong despite significant shopping limitations imposed by local governments in many of our markets. We estimate that in the fourth quarter we had approximately 260 club days lost in markets where in-club shopping was not permitted as a result of the varying limitations imposed on a country-by-country basis to mitigate the spread of COVID-19. I am proud of our team who responded rapidly to adverse conditions that impacted all of our markets.   



We made substantial progress with our technology-enabled shopping and omni-channel initiatives. Our Click & Go™ contactless online ordering and curbside pickup service was made available in all markets during the quarter and progressed to include a delivery option in six of our markets at fiscal year-end. This service, including curbside pickup and delivery, contributed approximately 3.6% of net merchandise sales during the fourth quarter. We believe that Click & Go™ online shopping and delivery options will remain important services to our Members. We will continue to strive for operating efficiencies in our new sales channels that we believe increase value for our Members allowing them to leverage their membership over multiple shopping platforms. We have also developed better in-bound and outbound online communication channels, so that we can develop a better understanding of our Members’ preferences.



The PriceSmart team continues to be nimble, creative and ready to adapt to our Members’ needs and preferences in the most responsible ways. Our top priority remains the safety of our employees and our Members, and we are focused on executing a successful holiday season at a time when families will likely cherish time together at home. Despite the persistence of this pandemic, our business continues to grow on many dimensions including the expected opening of our 47th club in early December, which is also our 8th in Colombia, Usaquén, located in the metropolitan area of Bogota.



I thank our wonderful team, especially our front-line workers, for all of the steadfast dedication they have shown in order for us to maintain our business as the trusted source of goods and services in the markets in which we operate.”





Fourth Quarter Financial Results



Total revenues for the fourth quarter of fiscal year 2020 increased 1.2% to $810.6 million compared to $801.3 million in the comparable period of the prior year. For the fourth quarter of fiscal year 2020, net merchandise sales increased 0.5% to $772.9 million from $768.9 million in the fourth quarter of fiscal year 2019. Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by $27.6 million, or 3.6%, versus the same period in the prior year.



The Company had 46 warehouse clubs in operation as of August 31, 2020 compared to 43 warehouse clubs in operation as of August 31, 2019.



Comparable net merchandise sales for the 42 warehouse clubs that have been open for greater than 13 ½ calendar months decreased 4.0% for the 13-week period ended August 30, 2020 compared to the comparable period of the prior year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $26.3 million or 3.6% versus the same period in the prior year.



The Company recorded operating income during the quarter of $29.0 million compared to operating income of $32.0 million in the prior year. Net income attributable to PriceSmart was $20.1 million, or $0.65 per diluted share, in the fourth quarter of fiscal year 2020 as compared to $20.7 million, or $0.67 per diluted share, in the fourth quarter of fiscal year 2019.    



Total revenues, for the twelve months ended August 31, 2020, increased 3.3% to $3,329.2 million compared to $3,224.0 million in the prior year.



Comparable net merchandise sales, for warehouse clubs that have been open for greater than 13 ½ calendar months, decreased 1.5% for the 52-week period ended August 30, 2020 compared to the comparable period of the prior year. Foreign currency exchange rate fluctuations impacted comparable net merchandise sales negatively by $59.3 million, or 1.9%, versus the prior year.



For the twelve months ended August 31, 2020, the Company recorded operating income of $122.5 million and net income attributable to PriceSmart of $78.1 million, or $2.55 per diluted share. During the twelve months ended August 31, 2019, the Company recorded operating income of $115.2 million and net income of $73.2 million, or $2.40 per diluted share.



The Company intends to file its Annual Report on Form 10-K for the year ended August 31, 2020 on or around October 29, 2020.



The Company reports comparable net merchandise sales on a “same week” basis with 13 weeks in each quarter beginning on a Monday and ending on a Sunday. The periods are established at the beginning of the fiscal year to provide as close a match as possible to the calendar month and quarter that is used for financial reporting purposes.  This approach equalizes the number of weekend days and weekdays in each period for an improved sales comparison, as the Company experiences higher merchandise club sales on the weekends. Each of the warehouse clubs used in the calculations was open for at least 13 ½ calendar months before its results for the current period were compared with its results for the prior period.



The term “currency exchange rates” refers to the currency exchange rates the Company uses to convert net merchandise and comparable net merchandise sales for all countries where the functional currency is not the U.S. dollar into U.S. dollars. The Company calculates the effect of changes in currency exchange rates as the difference between current period activities translated using the current period's currency exchange rates and the comparable prior year period's currency exchange rates. The Company believes the disclosure of the effects of currency exchange rate fluctuations on the Company’s results permits investors to understand better the Company’s underlying performance.



Club days lost means the total number of days one or more clubs are closed for an entire day because of government prohibitions on offering in-store shopping. For example, if one club was prohibited from offering in-store sales for five days during a month and another club was prohibited from offering in-store sales for two days during that month, we would say that we had seven club days lost during the month.



PriceSmart management will host a conference call at 12:00 p.m. Eastern time (9:00 a.m. Pacific time) on Friday, October 30, 2020, to discuss the financial results. Individuals interested in participating in the conference call may do so by dialing (855) 209-8211 toll free, or (412) 317-5214 for international callers, and asking to join the PriceSmart, Inc. call. A digital replay will be available through November 6, 2020, following the conclusion of the call by dialing (877) 344-7529 for domestic callers, or (412) 317-0088 for international callers, and entering replay passcode 10147692.



About PriceSmart



PriceSmart, headquartered in San Diego, owns and operates U.S.-style membership shopping warehouse clubs in Latin America and the Caribbean, selling high quality merchandise and services at low prices to PriceSmart Members. PriceSmart operates 46 warehouse clubs in 12 countries and one U.S. territory (eight in Costa Rica; seven each in Colombia and Panama; five in the Dominican Republic, four in Trinidad and Guatemala; three in Honduras; two each in El Salvador and Nicaragua; and one each in Aruba, Barbados, Jamaica and the United States Virgin Islands). The Company is currently constructing and plans to open a warehouse club in Bogota, Colombia in December 2020.



This press release may contain forward-looking statements concerning the Company's anticipated future revenues and earnings, adequacy of future cash flows, omni-channel initiatives, proposed warehouse club openings, the Company's performance relative to competitors, the outcome of tax proceedings and related matters. These forward-looking statements include, but are not limited to, statements containing the words “expect,” “believe,” “will,” “may,” “should,” “project,” “estimate,” “anticipated,” “scheduled,” and like expressions, and the negative thereof. These statements are subject to risks and uncertainties that could cause actual results to differ materially including, but not limited to: adverse changes in economic conditions in the Company’s markets, natural disasters, compliance risks, volatility in currency exchange rates, competition, consumer and small business spending patterns, political instability, increased costs associated with the integration of online commerce with our traditional business, whether the Company can successfully execute strategic initiatives, breaches of security or privacy of member or business information, cost increases from product and service providers, interruption of supply

chains, member or business information, cost increases from product and service providers, interruption of supply chains, COVID-19 related factors and challenges, including among others, the duration of the pandemic, the unknown long-term economic impact, the impact of government policies and restrictions that have limited access for our Members, and shifts in demand away from discretionary or higher priced products to lower priced products, exposure to product liability claims and product recalls, recoverability of moneys owed to PriceSmart from governments, and other important factors discussed in the Risk Factors section of the Company’s most recent Annual Report on Form 10-K, and other factors discussed from time to time in other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Forward-looking statements speak only as of the date that they are made, and the Company does not undertake to update them, except as required by law.



For further information, please contact Michael L. McCleary, EVP, Chief Financial Officer and Principal Accounting Officer (858) 404-8826 or send an email to ir@pricesmart.com