PriceSmart Announces December Net Merchandise Sales
PriceSmart, Inc. (NASDAQ: PSMT) reported a 2.8% increase in net merchandise sales for December 2020, totaling $372.6 million. However, foreign currency fluctuations negatively impacted sales by 3.1%, or $10.5 million. Comparable sales for 43 warehouses decreased by 1.7% due to COVID-19 restrictions, particularly affecting Costa Rica, Panama, and Colombia. Despite challenges, the Click & Go™ service contributed 2.8% to total sales. The company plans to open new clubs in Guatemala and Jamaica, indicating ongoing expansion efforts.
- Net merchandise sales increased by 2.8% year-over-year to $372.6 million in December 2020.
- Fiscal year-to-date sales increased by 6.1% to $1,211 million.
- Click & Go™ service accounted for approximately 2.8% of total sales, showing growth in e-commerce.
- New club openings planned in Guatemala and Jamaica support future sales growth.
- Foreign currency fluctuations negatively impacted sales by 3.1%, equating to $10.5 million.
- Comparable net merchandise sales for 43 clubs decreased by 1.7%, primarily due to COVID restrictions in key markets.
SAN DIEGO, Jan. 8, 2021 /PRNewswire/ -- PriceSmart, Inc. (NASDAQ: PSMT) today announced that for the month of December 2020, net merchandise sales increased
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
Sherry S. Bahrambeygui, Chief Executive Officer, commented:
"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.
Our Click & Go™ service, including curbside pickup and delivery, contributed approximately
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.
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."
Fiscal year to date, which includes the four months ended December 31, 2020, net merchandise sales increased
For the 17-week period ended December 27, 2020, comparable net merchandise sales increased
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 47 warehouse clubs in 12 countries and one U.S. territory (eight in Costa Rica and Colombia; seven in 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 also plans to open new warehouse clubs in Guatemala City, Guatemala and Portmore, Jamaica in the fall of 2021 and the spring of 2022, respectively. Once these two new clubs are open, the Company will operate 49 warehouse clubs.
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.
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, cybersecurity breaches that could cause disruptions in our systems or jeopardize the security of 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.
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SOURCE PriceSmart, Inc.
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