CTAs keep buying Treasuries, gold longs face stop-loss risk: BofA
Introduction & Market Context
PriceSmart Inc. (NASDAQ:PSMT), the leading warehouse club operator in Central America, the Caribbean, and Colombia, has released its Q3 FY25 presentation slides, showcasing solid growth across key metrics. The company, which traces its origins back to Sol Price’s FedMart founded in 1954, continues to expand its footprint in emerging markets while enhancing its membership value proposition.
Operating 55 warehouse clubs across 12 countries and one U.S. territory, PriceSmart serves nearly 2 million members with a business model focused on low prices, limited SKUs, and high-quality merchandise. The company’s recent performance builds on momentum seen in Q2 2025, when it reported an EPS of $1.45 against forecasts of $1.40.
Quarterly Performance Highlights
PriceSmart reported strong financial results for Q3 FY25 ended May 31, 2025. Net merchandise sales reached $1.29 billion, representing an 8.0% increase year-over-year, or 9.5% growth in constant currency terms. Total (EPA:TTEF) revenue grew by 7.1% to $1.32 billion, while operating income came in at $56.2 million.
As shown in the following detailed financial highlights from the Q3 FY25 results:
Membership income, a critical driver of PriceSmart’s business model, grew by 13.4% to $21.9 million in Q3 FY25. The company reported net income of $35.2 million and earnings per diluted share of $1.14 for the quarter. Adjusted EBITDA reached $79.0 million.
For the first nine months of FY25, PriceSmart’s net merchandise sales increased by 7.2% to $3.85 billion (8.2% in constant currency). Year-to-date earnings per diluted share reached $3.80, with total revenue of $3.94 billion, up 6.8% from the same period last year.
The company has demonstrated consistent sales growth over the past five years, as illustrated in this chart of net merchandise sales:
Membership Growth and Value Enhancement
PriceSmart’s membership metrics continue to show strength, with total membership accounts reaching 1.97 million as of May 31, 2025, and a renewal rate of 88.0%. The company’s focus on enhancing membership value has led to significant growth in its premium Platinum tier.
The following chart demonstrates the impressive growth trajectory of Platinum memberships:
Platinum membership has grown at a CAGR of 32% from FY21 to May 31, 2025, with penetration increasing from 6.2% to 16.1% during the same period. Platinum members pay an annual fee of $80 (compared to $40 for Diamond members) and receive benefits including a 2% rebate on most purchases up to an annual maximum of $500.
PriceSmart’s membership income has grown at a CAGR of 10.2% from FY21 to the trailing twelve months ended May 31, 2025, reaching $83 per average membership compared to $56 in FY21.
Strategic Initiatives
PriceSmart’s growth strategy focuses on three key pillars: investing in new locations and remodeling existing clubs, increasing membership value, and driving incremental sales through digital channels.
The company’s omni-channel platform has become increasingly important, with digital sales representing 6.1% of total net merchandise sales in Q3 FY25. As illustrated in the following diagram, PriceSmart’s omni-channel approach integrates clubs, web, mobile, and social media:
According to the presentation, omni-channel members spend approximately twice as much as in-club only members, highlighting the importance of this strategy. The company has achieved a 4.8-star rating on UberEats as of May 31, 2025.
PriceSmart is also enhancing membership value through wellness offerings, including pharmacy services in 19 clubs, optical services in 54 clubs, and audiology services in 30 clubs. Additionally, the company’s private label "Member’s Selection" products have reached 27.7% penetration of total net merchandise sales for the nine-month period ended May 31, 2025.
Expansion Plans and Market Presence
PriceSmart’s geographic footprint spans Central America, the Caribbean, and Colombia, with plans for continued expansion. The company’s current and planned locations are illustrated in this map:
Two new club openings are planned: the 7th club in Guatemala (Quetzaltenango) in August 2025 and the 6th club in the Dominican Republic (La Romana) in spring 2026. This aligns with information from the Q2 earnings call, which mentioned plans to open the 56th warehouse club in Guatemala this summer.
Notably, the presentation reveals that PriceSmart is evaluating Chile as a potential new market for multiple warehouse clubs, signaling the company’s ambitions for further geographic expansion.
Forward-Looking Statements
PriceSmart’s "Six Rights" value proposition continues to drive its business model, focusing on the right merchandise, price, time, place, quantity, and service to deliver membership value:
The company announced leadership changes, with David Price set to become CEO effective September 1, 2025, and Gualberto Hernandez appointed as CFO effective June 1, 2025. These transitions come as PriceSmart continues to build on its financial strength, with a membership renewal rate of 88.0% and 1.97 million members as of May 31, 2025.
Capital expenditures for the first nine months of FY25 totaled $101.6 million, split between growth initiatives ($50.2 million) and maintenance ($51.4 million), reflecting the company’s balanced approach to investment.
Looking ahead, PriceSmart appears well-positioned to continue its growth trajectory in emerging markets, leveraging its warehouse club model, expanding digital capabilities, and enhancing membership value through premium tiers and additional services.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.